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EARLY START

Fractures in the Transition Team?; Jared Kushner: Man in the Middle; Trump Grabs Dinner Minus Reporters; Obama: "Anger and Fear" in American People; Iraq Could Take "Months" to Liberate Mosul. Aired 4:30-5a ET

Aired November 16, 2016 - 04:30   ET

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


(COMMERCIAL BREAK)

[04:30:26] CHRISTINE ROMANS, CNN ANCHOR: President-elect Donald Trump denies any trouble with his transition team. But one insider telling CNN about some confusion in the chain of command.

JOHN BERMAN, CNN ANCHOR: The son-in-law at the center of it all. Jared Kushner said to be rubbing some key members the wrong way.

ROMANS: The president-elect breaks protocol, again heading out to dinner without the reporters who are supposed to be there covering him.

BERMAN: This matters. People hate how we talk about this and stick up for the press but it matters. We'll talk about why in a little bit.

ROMANS: OK. Welcome back to EARLY START. I'm Christine Romans.

BERMAN: I'm John Berman. Thirty minutes past the hour right now.

And new this morning, all is well in Trumpville, at least according to the president-elect, and his transition team. The members of his transition team who are left, that is. There have been reports of turmoil within the presidential transition and reports that Donald Trump's son-in-law Jared Kushner is right in the middle of infighting.

But sources close to the transition tells CNN that while there is a battle between establishment Republicans and nontraditional conservatives, that reports of infighting are overblown. And sources tell CNN that some lobbyists were fired, but there's no purge under way.

Trump himself tweeted overnight, "Very organized process taking place as I decide on cabinet and many other positions." He added, "I am the only one who knows who the finalists are."

One transition official who was let know, former congressman and CNN commentator Mike Rogers, he was dropped after months of advising the transition on national security.

CNN's Joe Johns has the latest.

(BEGIN VIDEOTAPE)

JOE JOHNS, CNN SENIOR WASHINGTON CORRESPONDENT: Mike Rogers, the former House Intelligence Committee chairman, is now out. He was seen as reassuring figure to many Republicans, especially on issues of national security and was thought on the short list for CIA director. He's gone. Of course, he was hired by Chris Christie, who, as well, was demoted.

So, the question is why? What's going on with the transition?

The story they certainly want to put out is this is all about a blending of the campaign staff that traveled around the country with Donald Trump and the transition staff that was put in place to figure out what was going to happen in the event he won. But there is also a question, as to whether all of this is part of a purge, in the continuing fight, the back-fighting, between the establishment figures who work with Donald Trump and the nontraditional figures, the insiders and the outsiders. Of course, they say no, it is not a purge.

(END VIDEOTAPE)

ROMANS: No, it is not a purge.

All right. Mike Rogers says there is some confusion about the chain of command at Trump tower in New York where Vice President-elect Mike Presence is now in charge of the transition team. Rogers is, of course, former chairman of the House Intelligence Committee. His presence on the transition was seen as reassuring to establishment Republicans.

But Rogers told CNN's Anderson Cooper it was, quote, "absolutely the campaign's prerogative" to let him go.

(BEGIN VIDEO CLIP)

MIKE ROGERS, FORMER MEMBER OF TRUMP TRANSITION TEAM: They wanted to go in a different direction. It was easy for me to hand it off to Mike Pence in his capable hands coming in. So, I think that was kind of a combination. I think there is some confusion going on about a chain of command coming out of New York.

Hopefully, they'll get that settled pretty soon. I think they need to do it because as the clock ticks, all of these decisions become more important. And you have to make them sooner with a little more authority and forward thinking to make sure they don't bump into anything in the future. I think they're going to get there. I'm an optimist about that.

(END VIDEO CLIP)

BERMAN: All right. There are new signs that the president-elect may not have high regard for the press and the important role that journalists play in tracking his movements. An aide told reporters that Donald Trump was in for the night overnight, but turned out to be false.

The president-elect showed up at a New York City steakhouse two hours after this aide says he was done, wasn't going out. No one ever notify the team of reporters standing by, the pool, that was there just to track the president-elect's movement. It is longstanding procedure for the president-elect to travel with a pool of reporters just like the president does.

A Trump spokesperson says she was not aware of the restaurant plan. She says efforts are underway to set up this pool. It is the job of the transition team to be aware of the plans.

This is not prying. We don't want to sit and order appetizers with the Trump family. All the press want to know is the movement of the president-elect and the president to be there in case something happens to the president-elect, him or herself, to be there in case something happens in the country that requires the response of said person.

[04:35:02] ROMANS: And it is the eyes and ears of the American people, right?

BERMAN: Yes.

ROMANS: It's having the American people have a place in really what is one of the most important jobs in the world.

BERMAN: This isn't about the campaign anymore. This is not campaign stuff. This is not partisan. This is not equivalency or this or that. This is serving as a representative of the people with elected officials.

ROMANS: All right. Donald Trump's son-in-law Jared Kushner could end up with top national security clearance. Kushner is expected to play a key role in the White House as an adviser to his father in law. A source tells CNN a clearance for Kushner is likely but has not happened yet.

BERMAN: New roadblocks this morning for a leading contender for a key cabinet position. Rudy Giuliani, the former mayor of New York City, seen by many including himself as a leading possibility for secretary of state. He's facing questions about legal work and consulting work and about high paid speeches he gave over the last 15 years. Critics say they pose potentially serious conflicts of interest.

His former law firm, Bracewell and Giuliani, and other company, Giuliani Security, it did work for governments across Latin America and the Middle East. Senator Rand Paul, Republican from Kentucky, and sits on the Foreign Relations Committee that will have oversight over the confirmation process says the former New York mayor's ties to foreign governments is worrisome.

I would only ask you to Google Ron Paul and Rudy Giuliani to the 2008 presidential debates, because they didn't get along. I'm not saying this is family history here, but is this family history here. ROMANS: All right. Dr. Ben Carson has turned down Donald Trump's

offer to become the nation's next secretary of health and human services because he doesn't believe he has the necessary experience to oversee a government agency. An aide says Carson will continue to advise Trump from outside the White House. The Trump transition team did not respond to our request for a comment.

It struck many as sort of ironic. He was running to be the president of the entire federal government, but didn't think he has the experience to run one department of the government.

BERMAN: Maybe he does not want the job. I mean, try to figure out a nice way of saying it.

ROMANS: Right.

BERMAN: All right. So, guess who stopped by Trump Tower in Manhattan for a meeting with the president-elect? Ted Cruz. Remember? Ted Cruz and Donald Trump didn't get along for a long time. They were fierce rivals during the Republican primary battles. Not clear who initiated this meeting or what was discussed.

A spokesman for Cruz only say the Texas senator, quote, "looks forward to assisting the Trump administration." It's, of course, fuelling speculation, is there a job for a Cruz in the Trump administration? There is an open seat on the Supreme Court. Could Ted Cruz be a contender for that?

ROMANS: Primary battles are always so intense, I like to see that you, you know, that you can bury the hatchet in someone's back and then bury the hatchet for real again later.

BERMAN: That wasn't even in the back. It was like in the front.

ROMANS: The forehead.

BERMAN: That was in the forehead.

ROMANS: Primaries are over.

New backlash this morning to Donald Trump's appointment of Steve Bannon as chief White House adviser. Senate minority leader Harry Reid led a scathing Democratic assault on Bannon's selection. Reid argued that Bannon's former job as chairman of Breitbart News links him to white nationalist and anti-Semitic views. And Reid called on Trump to rescind his White House job offer to Bannon.

Senior Washington correspondent Jeff Zeleny has the latest.

(BEGIN VIDEOTAPE)

JEFF ZELENY, CNN SENIOR WASHINGTON CORRESPONDENT: John and Christine, as President Obama and Hillary Clinton say that people should wait and take a wait and see attitude towards Donald Trump, there is one leading Democrat who is doing no such thing. That is Harry Reid, the outgoing Senate Democratic leader who took to the floor of the Senate and made a blistering statement against Donald Trump again last night. He talked about the fact he did not win the popular vote and he called on him to reject the hiring of Steve Bannon. He also gave him this admonition.

SEN. HARRY REID (D), NEVADA: We have a responsibility to prevent Trump's bullying, aggressive behavior from becoming normalized in the eyes of America, especially the millions of young people who are watching and wondering.

ZELENY: Now, Senator Reid will never have to work with President Trump. He will be leaving the capitol after a long service there just as President Trump becomes the 45th president of the United States. That is specifically why he's reaching out, why he is talking so aggressively.

And it's music to many Democrats' ears. So many Democrats I talked to in Capitol Hill are stunned that President Obama and Hillary Clinton have said that people should keep an open mind about Donald Trump. They like what Harry Reid is doing, and many of them, as this Democratic Party rebuilds, plan to do the same thing -- John and Christine.

(END VIDEOTAPE)

BERMAN: All right. Jeff Zeleny, thanks so much.

Three luxury high-rise apartment buildings in Manhattan getting rid of Trump name. The three structures that make up Trump Place feature 1,300 upscale apartments renting anywhere from $2,600 a month to $12,000, the Christine Romans penthouse.

ROMANS: Oh, right.

BERMAN: After the election, a group of residents started a petition to drop the Trump name. The owner agreed. The former Trump Place buildings are now simply by their addresses, 140, 160, 180 Riverside Boulevard.

ROMANS: And it's a reminder of sort of his business model, that he licensed his name, he license. I mean, Trump is seen in New York as sort of the gold standard. You know, a lot of people in New York, too, they're starting to fear traffic in a Trump presidency.

[04:40:00] BERMAN: It's not inside baseball for New Yorkers.

ROMANS: Where the Trump Tower is, there are barricades and police, and, you know, protesters and gawkers, and celebrity seekers.

BERMAN: If you drive down Fifth Avenue in rush hour, you already got problems.

ROMANS: Yes, exactly. Just stay away.

All right. Donald Trump promised tax cuts for millions of Americans. That's likely to happen. But the cuts may not be as big as he originally proposed. Why? Well, experts and deficit hawks say it's just too expensive, potentially costing as much as $6 trillion over the next decade.

His initial plan was estimated at $10 trillion. So, he has been scaling back. The savings came when Trump raise his income tax rates before the general election. These match what House Republican had proposed last year. These are the brackets: 12 percent, 25 percent, 33 percent. That means rich people would get the big tax cut.

Trump says millions of Americans won't pay any tax at all. And both sides agree that the corporate tax rate should be lowered. But Trump is promising a bigger cut in corporate taxes. That change in Trump's history as a deal maker shows he's ready to pivot on details if needed.

Experts say even House Republicans and the Trump administration come to an agreement, passing them quickly, the changes may not go in effect until next fall. But I'm telling you, a lot folks in the markets are expecting, tax cuts are coming, maybe a corporate tax cut is coming. Maybe some sort of corporate tax holidays to repatriate some of that money overseas, they're expecting movement on this.

BERMAN: I'm old enough to remember when people cared the deficit. I'm old enough to remember.

ROMANS: I still care about the deficit.

BERMAN: Just saying. Keep your eyes on it.

All right. In a couple hours, President Obama speaks live in Greece. Donald Trump sort of the elephant in the Acropolis. You'll see why, next.

(COMMERCIAL BREAK)

[04:45:46] ROMANS: President Obama cannot shake that long shadow being cast by Donald Trump. The president plays first tourist this morning, visiting the Acropolis before departing Greece for Germany, and he's letting the global community know he's concerned about a troubling strain of rhetoric that launched Trump into the White House.

We're going live to Athens now and bringing in senior international correspondent Nic Robertson.

And, Nic, this is part of a president's tenure, with the new guy coming in, but this is still the president of the United States, and he's trying to assure America's friends and allies around the world.

NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Sure. And what better place for an outgoing U.S. president to come than to give that message to international friends and allies than in the cradle of democracy as he alluded to yesterday. Athens, the Acropolis, where he's visiting now, symbolizes all of that.

So, for President Obama, it would have been a chance to speak to those allies, to assure them of continuity, to assure them that his views, that what he's achieved in the past, you know, eight years, perhaps in a way a mirror of what the Greeks have achieved through democracy that they passed on to the West a millennia ago.

But, no, it has been dogged by the election of President-elect Donald Trump. The questions that follow President Obama around with that, not just those coming from the press yesterday where he spoke about his frustrations, about his sense that he understands people's fear and anger over globalization and marginalization, but not the way Republicans are dealing with it.

And undoubtedly, he's kind of face similar sorts of questions from European leaders on this tour that are going to wonder, ask him the same thing, and get his assessment of Donald Trump. So, the speech today in the Acropolis perhaps not giving the people of the audience that it hoped it would really go to -- Christine.

ROMANS: All right. Nic Robertson for us there, live in Athens. Thank you, Nic.

BERMAN: The Republicans in the House of Representatives leaving no doubt who they want as their leader. Paul Ryan, he received unanimous support for another term as House speaker. Now, Ryan who kept at arm's length from Donald Trump through much of the campaign now says he cannot wait to get to work with the president-elect. The speaker says the nation is in the dawn of a new Republican government.

Let's get the latest now from CNN's Manu Raju.

(BEGIN VIDEOTAPE)

MANU RAJU, CNN SENIOR POLITICS REPORTER: Good morning, John and Christine.

House Republicans choosing Paul Ryan to be the next House speaker in overwhelming fashion, actually voting with voice vote, with dissention publicly voiced in the room, a sign that Paul Ryan is in a much, much secure position, in large part because of Donald Trump, a man he did not actually want to be the Republican nominee suddenly has helped Paul Ryan become speaker once again.

Now, it's not final yet, I should add. There's going to be a vote on the House floor to formalize Paul Ryan's selection to be reelected as speaker. But essentially, he will be. Yesterday's vote significant in the fact that Republicans are putting up their nominee to be speaker. They have chosen Paul Ryan who is aligning himself very closely with Donald Trump.

This is such a significant shift from just a month ago when it looked like conservatives were looking for a scalp, and that scalp being Paul Ryan, in no small part because of the way he had dealt with Donald trp. He did not support, did not say he would defend the campaign with Donald Trump and he criticized Donald Trump at key moments of the campaign season.

But in recent weeks, Paul Ryan has aligned himself with Trump, has said that they could work together and now is enthusiastically embracing the Trump agenda. So, the party really trying to showcase some unity heading into the first and the opening day of a Trump administration, which is one reason why even people who don't like Paul Ryan, in the conservative side, like in the House Freedom Caucus, they're not willing to put up a challenge for the speaker because they know overwhelmingly they would lose and the party wants to show some unity heading into the opening days of the Trump administration -- John and Christine.

(END VIDEOTAPE)

BERMAN: All right. Manu Raju, thanks so much.

A much different story for Democrats.

[04:50:01] They delayed their House leadership elections. This is a sign that longtime leader Nancy Pelosi could be in some trouble. No formal challenger has announced his or her candidacy, but one Democratic House member and Pelosi supporter said they need time. They want to recalibrate and decide how to move forward.

ROMANS: All right. The Dow Jones Industrial Average, Trumponomics, folks, it's reaching a major milestone, thanks in part to that recent Trump rally. We're going to show you an incredible chart. We've got a check on CNN Money, next.

BERMAN: An incredible chart?

ROMANS: An incredible chart. Look at my chart.

(COMMERCIAL BREAK)

BERMAN: This morning, Iraqi military commanders concede it could take months to drive ISIS all the way out of Mosul. They're facing heavy resistance as they move closer to the city center with thousands of civilians said to be being held as human shields.

[04:55:00] This as new intelligence services about the possible whereabouts of ISIS leader Abu Bakr al-Baghdadi.

Let's get the latest on that. CNN's Phil Black tracking the latest developments for us. He is south of Mosul this morning.

Good morning, Phil.

PHIL BLACK, CNN INTERNATIONAL CORRESPONDENT: Good morning, John.

These latest reports about Abu Bakr al Baghdadi's location come from what are known as the popular mobilization units. These are former militia groups that have been incorporated into the Iraqi state as paramilitary. They're responsible in this ongoing military operation to drive ISIS from territory west of Mosul. And now, they say that is where they believe Baghdadi is.

They say intelligence indicates that he is somewhere in location between two towns, a difference that's only roughly about an hour's drive from one another, they don't say how they know this they know this, and crucially, other departments, ministries within the Iraqi government, they won't back this up. The Iraqi defense ministry tells us that their most recent intelligence indicates that Baghdadi was in Mosul at the start of the military operation, he left sometime shortly after and headed west.

Now, that's pretty open, because if you keep heading west, you get Syria and, of course, the territory that ISIS still controls beyond that. So, the whereabouts of Baghdadi is still very much an open question. U.S. officials have been operating for some time on the notion that he moves around a lot, exercising extraordinary operational authority to ensure that no one knows where he is, that he is not vulnerable to any sort of airstrikes or military operation. And indeed, U.S. officials have said if they did know where he is, they wouldn't tell anyone that they would move to get him -- John.

BERMAN: All right. Phil Black, an elusive target but an important one, thanks so much.

ROMANS: All right. Let's get a check on CNN money stream this Wednesday morning. Dow futures slightly lower. A caution sign flashing after what's been a string of record highs.

Stock markets in Europe are mixed in the first hour of trading there. Shares in Asia have closed. They're closed mostly higher overnight. If the Dow can turn things around and gain 77 lower points today, it will cross the mark for the first time in 120-year history.

Now, this is just a psychological, of course. This is perspective. It took the Dow about 14 years to go from 2,000 to 10,000. It took a dotcom boom to do that.

And then it crashed to nearly 6,500 during the recession in 2009. Since that crash, the Dow has roared back up 12,000 points or 189 percent, in less than eight years.

This most recent knocking on the door here at 19,000, it is being credited with the new administration coming in. They're expecting tax cuts, infrastructure spending, corporate tax cuts. If there can be some real reform done, it could be seen pro-growth in near term, but adding to the deficit in the long term. Right now, Wall Street only cares about the near term.

The latest Silicon Valley unicorn to go public, Snapchat. The company filing paperwork thanks to a law signed in 2012 that lets businesses with less than $1 billion in revenue file private documents with the SEC. Now, a person close to the deal says it's worth $20 billion to $25 billion. Snapchat could go public as early as next March. The company is just five years old, recently launched its first hardware product called Spectacles which are sunglasses with a built-in wireless video camera.

You know, Snapchat turned down a $3 billion offer from Facebook back in 2013. This being worth potentially $25 billion would show that maybe that was a right call.

BERMAN: Yes, I'm not good at math, but $25 billion is more $3 billion?

ROMANS: Yes, it currently is.

BERMAN: You can confirm that, as second source?

ROMANS: I can confirm that.

BERMAN: Someone's going to make a lot of money.

ROMANS: That's right. Check out the new CNN Money Stream app. It is business news, personalized. It's stories, videos, tweets and topics John Berman wants all in one cool feed. Download it now on the app store and Google play.

BERMAN: I can see Peter Hamby, remember who your friends are.

All right. EARLY START continues right now.

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ROMANS: Confusion inside Trump's transition team. The president- elect denying any trouble. But the man who just got bounced, he is talking to CNN.

BERMAN: All right. The man in the middle is Donald Trump's son-in- law, Jared Kushner. He's said to be rubbing some team members the wrong way.

ROMANS: This as the president-elect ditches the reporters who are supposed to cover him again.

Good morning and welcome to EARLY START. I'm Christine Romans.

BERMAN: Nice to see you. I'm John Berman. It is Wednesday, November 16th, it's 5:00 a.m. in the East.

And new this morning, all is well in Trumpville, at least according to the president-elect and his transition team. The members of the transition who are left, that is, there have been reports of turmoil within the presidential transition and reports that Donald Trump's son-in-law Jared Kushner is right in the middle of that infighting.

Sources close to the transition tell CNN there's a battle between establishment Republicans and nontraditional conservatives. But a high-ranking Trump argues that the reports of infighting of are overblown and tells CNN that some lobbyists were fired, but there was no purge under way, and that this happens during a transition.

Donald Trump himself tweeted overnight, he said, "Very organized process taking place as I decide on cabinet and many other positions." He added, "I am the only one who knows who the finalists are."