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Trump Back In The Oval Office; Trump Mulling Paris Climate Accord; All Eyes On Jared Kushner; Merkel's Doubts About U.S. Reliability; Russian Discussed Potentially "Derogatory" Info. Aired 5:30-6a ET

Aired May 30, 2017 - 05:30   ET



[05:30:40]CHRISTINE ROMANS, CNN ANCHOR: The Paris Climate deal, the search for an FBI director, troops in Afghanistan, maybe a staff shakeup. Plenty to do as the White House tries to get back to business.

DAVE BRIGGS, CNN ANCHOR: The Russia probe still a dark cloud hanging over this White House. Now, the West Wing set to blame Jared Kushner's secret backchannel request on the Kremlin.

ROMANS: And, German Chancellor Angela Merkel standing behind her suggestion Europe can't rely on the U.S. What's now in store for American's ties with Berlin and Europe as a whole?

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

BRIGGS: I'm Dave Briggs. It is 31 minutes past the hour. President Trump back in the Oval today trying to get back to the country's business after a long holiday weekend and an even longer overseas trip. Key issues on his very full agenda, whether to pull out of the Paris Climate Accord and a search for a new FBI director, as well. The president also weighing a strategy going forward for Afghanistan that could include more troops, a decision all the more significant after President Trump's first visit to Arlington National Cemetery as commander in chief.

ROMANS: The president also weighing whether to shake up his team. Sean Spicer is set to brief the media this afternoon on the questions about changes to the press office. It will be the first time since the president left for his nine-day trip that any White House official has briefed in front of cameras and the first since penetrating questions began to swirl around senior adviser and first son-in-law Jared Kushner. Jeff Zeleny begins our coverage from the White House.


JEFF ZELENY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Christine and Dave, the White House is back at business after the long holiday weekend and after the president's first international trip. They are still desperately trying to change the subject from the Russia investigation -- trying to make a pivot -- but the chances of doing that are probably fairly unlikely. The deepening Russia investigation is still consuming the White House here, at least in terms of how they are going to respond to it.

Now, Jared Kushner, the president's son-in-law and senior adviser, he is telling associates he is willing to talk to the FBI, he's willing to talk to members of Congress about those backchannel communications he was trying to set up with Russian officials. They say it was simply something that they were trying to offer to do to build the connection with the Russian government here, but so many questions about that because they were acting at the time as private citizens but they were members of the transition.

Coming up, there are some key agenda items the president has on his desk he wants to act upon. First and foremost, is he going to withdraw or keep the U.S. inside that landmark climate agreement? He was lobbied last week at the G7 summit in Sicily. European leaders urged the president to stay but most people here at the White House would be surprised if the president would decide to stay in the landmark climate agreement. But it raises the question, if the U.S. pulls out of this agreement what does it do to its standing on the world stage? What does it do to the rest of the president's agenda?

Also, the president is facing a decision on Afghanistan. When will he act on his military commanders' recommendation to send more U.S. troops to Afghanistan? That certainly was made even more poignant as he visited Arlington National Cemetery on Memorial Day. Those are two of many issues facing the White House, but the Russia investigation is still dominating things here inside the West Wing -- Christine and Dave.


ROMANS: All right, Jeff Zeleny in the briefing room. All right, investors are trying to figure out exactly why Jared Kushner met in December with a Russian banker who has links to Vladimir Putin -- what the point of that meeting was. That's according to "The New York Times." Now, CNN has already reported Kushner met with Russian Ambassador Sergey Kislyak seeking to engage further with Russia. Kushner was then told to meet with Sergey Gorkov, the head of a Russian bank under sanction from the U.S.

BRIGGS: Also this morning, the White House is ready to push back on new reporting Kushner tried to set up a secret backchannel with the Russians by blaming the Russians, claiming it was their idea. A source tells CNN's Gloria Borger the Russian ambassador asked Kushner if the Russian military could talk to Michael Flynn about Syrian strategy. The source says Kushner did not say he would arrange it and it was never arranged.

ROMANS: For the time being.

BRIGGS: You got that?

ROMANS: Yes, I got it. I got it. For the time being. Expect Kushner and his wife Ivanka to keep their heads down. Administration officials tell CNN both are laying low and focusing on their work, unfazed by all the scrutiny. The administration claims Ivanka Trump is not involved with that war room currently being set up, even though she was seen at the White House with the president's personal attorney, Marc Kasowitz.

[05:35:10] BRIGGS: CNN has also learned Jared and Ivanka have told friends they'll continue to evaluate whether they plan to remain in D.C., something they've discussed before the news broke about Kushner's request for a backchannel to Moscow.

So let's talk politics with Chris Deaton. He's the deputy online editor of "The Weekly Standard." Good morning to you, sir.

ROMANS: Good morning.


BRIGGS: All right. So the latest is that reporting that it was the Kremlin's idea. What do you make of all this? John McCain certainly going on record saying he does not like this, the optics of it aren't great, but what's the bottom line with this Kushner backchannel request?

DEATON: Sure. There is a lot of political haze to this. That's something that I think we have to keep in mind coming from the White House. They are going to present their own version of what happened behind closed doors. We're going to continue to have some of these questions raised and the drip, drip, drip of reporting. A lot of this is just naturally necessitating and beckoning more questions as a natural part of the investigation. I think that what we have to keep in mind here is the significance of each drip that comes out of this.

Jared Kushner is named a person of interest, for example, in some sort of probe. Does that necessarily mean something alarming is at work? Well, not necessarily, by many definitions. But then once you get into the more granular details of this -- who he met with, what the purpose of it was, now this latest stuff of actually the Russians initiated this -- that raises a whole other portfolio of questions. Those are the types of things that beckon follow-ups in the natural course of an investigation like we're seeing right now.

ROMANS: And, you know, the response is so tricky because if you play it like the Russians were behind all this -- it's all the Russians, you know, playing the White House, then you look like you got played. I mean, then it looks amateurish.

DEATON: Which is a terrible thing for this White House to come under right now just because of the fact that it's first of all, trying to assert itself with respect to its own standing on the world stage. I mean, I don't want to make too big of a leap here but when you have the "America First" type of agenda as the White House itself is trying to push, I mean, there has to be some sort of exercise of kind of a concrete independence across the board here. You don't want to sully any of that with some of this Russia tie-in stuff.

And there have already been plenty of questions that have plagued them really from day one of, you know, the ascendancy of the Trump campaign itself, so there's a lot they have to be on the lookout for with respect to that. I think President Trump understands more than most people that optics do matter. ROMANS: You wonder how this sets him back, Dave, with the agenda. I mean, there's a lot to do this week, in particular -- tax reform --

BRIGGS: There is a lot and --

ROMANS: -- you know?

BRIGGS: Yes, and how does the Trump administration get their footing now that they're back in the White House? You've got the FBI, you've got Afghanistan, you've got all these -- but you need something to get your footing and how do you do it -- the Paris Climate agreement? It's legislation that will get some momentum moving forward, but where do they find that momentum?

DEATON: Yes, if only it could be done with the snap of a finger. I think that's some of the problems that this White House is beginning to encounter here. I mean, when you do have a neophyte politician who is just now beginning to understand the necessarily slog, by nature, of what the legislative process actually is, you don't just roll out these big agenda items like infrastructure, tax reform, health care we've already seen. Things that are going to necessitate a great deal of bipartisan haggling -- even haggling inside of their own Republican caucus, so you can't just take care of that with the snap of a finger.

If they would have produced maybe a little bit more of a coherent rollout of health care and made more headway on that so far, that might have helped, but tax reform can't happen until the next fiscal year, at this point. Infrastructure, still, is kind of in its nascent stages --


DEATON: -- so you can't really do anything concrete, which is the problem.

ROMANS: Yes. The front page of "The Wall Street Journal" today, you know, tax reform is stalled. The president has both chambers of Congress and the same old arguments happening on tax reform.

I want to switch gears quickly and listen to what Angela Merkel said about the transatlantic relationship in what many are taking as a signal that Germany is going to realign away from an unreliable United States administration.


ANGELA MERKEL, GERMAN CHANCELLOR (through translator): We are convinced transatlanticists and precisely because we are, we know that transatlantic relations are of immense importance for us all. They rest on mutual values and interests, particularly when we are in times, as we are now, of intense challenges. The last few days showed me that the days where we could completely rely on others are over.


ROMANS: The statesman physicist coining transatlanticists -- convinced transatlanticists -- say all that 10 times fast. What did you make of that?

DEATON: Convinced is also the most fun adjective there. I mean, it's like it took some -- it took some arm-twisting to get them to actually believe that. It's a fascinating but inevitable perspective I think, given what we saw with the Trump campaign. I mean, "America First" does have many connotations with a lot of the domestic stuff, with respect to infrastructure spending and kind of focusing on American jobs and how do we actually, in some respects, retain some of the nostalgia of old with respect to our economy and then forge ahead into a new future.

[05:40:15] But it's the foreign policy stuff as well and with what we've heard the president talk about with NATO, the favorable tone with which he spoke in Brexit, this is not necessarily surprising to see Angela Merkel orient herself this way. I think something that we have to keep in mind, however, is that look, our economies will remain inextricably linked.

ROMANS: Of course.

DEATON: I mean, it's not like people are going to retreat into our shells here, but it definitely is a potentially new era of American- European relations.

ROMANS: Well, he slammed, you know, the Germans on trade. He said that they're a really bad deal, over trade. But, you know, the biggest exporters of cars from the U.S. made by U.S. workers happen to be German cars, so it's a little more complicated than America first and Germany second, and all that. All right, Chris Deaton, nice to meet you. Thanks for stopping by. Come back again soon.

BRIGGS: Come back, my friend.

DEATON: All right, thanks, guys. Have a good morning.

ROMANS: All right, have a good morning. A record 107 million Americans have auto loans but a new report shows that many people may not be able to afford them. The report found the largest subprime auto lender, Santander, only checked the incomes for eight percent of applicants. Subprime refers to people with poor credit. By comparison, Santander's main competitor checked 64 percent of applicants.

These findings worry experts for a couple of reasons. It raises concerns that customers can't make their payments and it mirrors practices that led to the home loan crisis. Remember? You could get a loan-- no income, no job, no problem. However, car loans are for a smaller amount than mortgage and account for a smaller portion of the economy but this is more bad news for the auto industry. Rising inventory, declining prices, and low sales may signal that its seven- year boom is over, at least peaked. Sales have been on the rise since 2010. They fell for the first four months of the year and we'll see the latest report later this week. Automakers report May's new car sales Thursday.

BRIGGS: OK. What made a Texas lawmaker say this about one of his colleagues?


STATE REP. ALFONSO "PONCHO" NEVAREZ, (D), TEXAS-DISTRICT 74: He made a very stupid comment. He's a racist. He's a bad person.


BRIGGS: How an immigration fight led one lawmaker to threaten to shoot another, next.


[05:46:15] BRIGGS: Welcome back. A near brawl erupted in the Texas legislature. Hundreds of people packed the Capitol rotunda on Monday protesting a new state law that bans sanctuary cities and punishes local governments that don't comply with immigration rules and detention requests. Things got heated when Republican House member Matt Rinaldi announced he called ICE to report protesters who were holding those signs reading "I'm illegal and here to stay."

ROMANS: Rinaldi says he was then assaulted verbally and physically by fellow lawmakers, admitting he threatened to shoot one Democrat in self-defense. Rinaldi's actions were too much for one Texas lawmaker.


Yes, I mean the guy made a comment -- a very stupid comment. He's a racist. He's a bad person and we're not going to allow people like that to get away with saying comments like that because they think nothing's going to happen to them.


ROMANS: Democrats deny assaulting Rinaldi and ICE officials say they never received a phone call from him about the protesters.

BRIGGS: Tiger Woods apologizing to family, and friends, and fans following his arrest Monday on suspicion of driving under the influence near his Florida home. Woods issued a statement to media outlets saying, "I understand the severity of what I did and I take full responsibility for my actions. I want the public to know that alcohol was not involved. What happened was an unexpected reaction to prescribed medications. I didn't realize the mix of medications had affected me so strongly."

ROMANS: Woods adding he expects more from himself and will do everything in his power to make sure it doesn't happen again. Police in Jupiter, Florida say he was arrested at 3:00 a.m. Monday some 10 miles from home. He spent several hours in jail before being released without bail. The 41-year-old Woods has been off the pro tour rehabbing from a fourth -- a fourth back surgery last month.

BRIGGS: All right. You can expect suspensions, fines, and a lot of helmet-throwing jokes after this Memorial Day fireworks in San Francisco. (Video playing) Giants' pitcher Hunter Strickland hitting Bryce Harper, of the Nationals, in the hip with that 98 mile an hour fastball. It was on Harper charging the mound, throwing the helmet at Strickland, or at least trying to throw the helmet at Strickland. Punches were thrown, benches cleared. The first time Harper had faced Strickland since hitting two home runs off of him in the 2014 playoffs.

But that's the joke being made, Christine, and we want our viewers at EARLY START to weigh in. Is this worse than the first pitch of 50 Cent at Citi Field and did Bryce Harper intend to hit Strickland with that helmet or was he just spiking it before throwing down?

ROMANS: Oh, come on. You can't bring 50 Cent into it. That's a whole --

BRIGGS: You have to bring 50 Cent into it. Which was worse? Which had worse aim?

ROMANS: Oh, oh.

BRIGGS: OK, 50 Cent had worse aim. At least Harper was close. I contend I don't think he was trying to hit Strickland with that helmet. He was trying to hit him with punches, which he did.

ROMANS: I asked John Berman. John Berman thought that he was trying to hit him with his helmet.

BRIGGS: OK, let us know @EarlyStart on Twitter.

ROMANS: You don't think he was trying to hit him? I don't think so.

BRIGGS: I think Bryce Harper has pretty good aim. If he wanted to hit him he would have.

ROMANS: All right. Bad sportsmanship, everybody.

BRIGGS: It is, and I'm not --

ROMANS: Kids, don't do this at home.

BRIGGS: Right.

ROMANS: All right. The $1,000 stock club is about to get two new members. We'll tell you who they are, next.


[05:53:35] BRIGGS: Breaking overnight, Panama's government announcing the death of former dictator Manuel Noriega. Noriega had been in intensive care for two months after suffering a hemorrhage during surgery to remove a brain tumor. The former general ruled Panama from 1983 to 1989 before he was ousted by a U.S. invasion. He was in prison for corruption and murdering his political opponents before he was hospitalized earlier this year. Noriega was 83 years old.

And on the heels of a new missile test, another direct threat from Kim Jong Un against the United States. North Korean state media reports the dictator is planning to develop more powerful weapons to send what they call a bigger "gift package" to the U.S. The state news agency says Kim supervised the latest testing of a new missile system on Monday. Pyongyang launched a short-range ballistic missile that landed some 200 miles from the coast of Japan.

ROMANS: All right, to money now on this shortened trading week. You can see Wall Street futures right now are a little bit lower here. Global stock markets also mostly lower. It's a short week on Wall Street. Markets were closed for Memorial Day and stocks closed mixed ahead of that holiday but that was still enough for the Nasdaq and the S&P 500 to hit record highs, and all three indices gained at least one percent for the week.

Investors, this week, will tune in for the end of a very strong earnings season, the best since 2011. In EconData, personal income and spending comes out today while the May jobs reports releases Friday. Unemployment dropped to 4.4 percent in April, its lowest level since 2007.

[05:55:07] Two more stocks are about to be worth $1,000 a share. Amazon and Google's parent company Alphabet could hit that milestone today. On Friday, Amazon hovered around $999, Alphabet topped $996. I feel like I'm on "The Price Is Right." Right now, though, only seven U.S. stocks trade above $1,000. This is just further proof that a few big-name stocks have been driving this market. For example, Amazon is at more than 1,500 percent since 2009. Experts warn this, of course, makes the market vulnerable in case of a drop. The five biggest stocks on the S&P 500 make up one-third of its gains for the year and the entire index could drop if one of those stocks falls.

All right, good news about credit scores. Americans' credit scores hit levels not seen since the recession. Great news for potential spending here. The average credit score hit 700 in April, the highest since 2005. Meanwhile, the riskiest consumers -- those with scores below 600 -- hit a record low. This could be good for economic activity. As credit scores rise, lenders may make more credit available and that could boost consumer spending.

Another big thing I'll be watching today, Dave, the front page of "The Wall Street Journal." A story about how tax reform has faltered. There was this big push for repeal and replace Obamacare and then quickly moving --


ROMANS: -- into tax reform. And this story in the "Journal" talking about how the president, both chambers of Congress, and the White House and their stall there --

BRIGGS: It was a slam dunk.

ROMANS: -- on the status quo. I mean, people are still fighting over this. No one wants to give up their tax -- their tax --

BRIGGS: Well, it's the reality, they say, of special interests and how complicated the tax policy truly is.


BRIGGS: It's just like health care.


BRIGGS: They can agree that they want something new, but they can't agree on what that is. And now, as this Trump administration gets back from this foreign trip, how do they reset? How do they get some momentum going in the right direction, right?

ROMANS: That's true. All right, so we're going to hand it off from here. Thanks for joining us. I'm Christine Romans.

BRIGGS: I'm Dave Briggs. Camerota and Cuomo are gearing up early. They need a little bit more time so "NEW DAY" starts right now. We'll see you tomorrow.


ROMANS: Investigators are trying to figure out exactly why Jared Kushner met in December with a Russian banker with links to Vladimir Putin.

UNIDENTIFIED MALE: Russia has been genius at manipulating people.

UNIDENTIFIED MALE: The questions about the relationships with Russia are greater than ever.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I had nothing to do with Russia.

BRIGGS: The White House blaming Kushner's secret backchannel request on the Kremlin.

UNIDENTIFIED MALE: The naivete here to believe in this environment you're going to have a backchannel, that is not secret. It's going to go public.

UNIDENTIFIED MALE: I think his clearance should be under review as we speak.

SEN. JOHN MCCAIN (R), ARIZONA: I don't like it. I just don't.

ROBERT MUELLER, JUSTICE DEPARTMENT SPECIAL COUNSEL: We must act with honesty and with integrity. You are only as good as your word.

UNIDENTIFIED MALE: Angela Merkel bluntly saying the U.S. is no longer a reliable partner.

MCCAIN: I think that the Europeans are legitimately concerned.


ANNOUNCER: This is NEW DAY with Chris Cuomo and Alisyn Camerota. CHRIS CUOMO, CNN ANCHOR: All right. We want to welcome our viewers in the United States and around the world. This is NEW DAY. It's Tuesday, May 30th, 6:00 here in New York. And we have exclusive new reporting on the Russia investigation. We're going to give you that in a moment. There are several big stories on the starting line. Congressional and federal investigators reportedly scrutinizing Jared Kushner's meeting with a Russian banker who has obvious links to Vladimir Putin.

ALISYN CAMEROTA, CNN ANCHOR: President Trump continues the search for a new FBI director to replace James Comey, one of the many pressing issues that he faces this week. And, German Chancellor Angela Merkel doubling down on her doubts about the U.S. being a reliable partner for European nations. So there's a lot to cover and we begin with our exclusive new reporting on the investigation into Russia's meddling in the 2016 election.

Jim Sciutto, Pamela Brown, and Dana Bash broke the story and Jim Sciutto joins us now. Give us the latest, Jim.

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: Good morning, Alisyn and Chris. Two former intelligence officials and a congressional source tell my colleagues Pamela, Dana, and I that Russian government officials discussed having potentially derogatory information about then-presidential candidate Donald Trump and some of his top aides. This, in conversations intercepted by U.S. intelligence during the 2016 election.

One source described the information as financial in nature and said the discussions centered around whether the Russians had leverage with Trump's inner circle. The source says the intercepted communication suggested to U.S. intelligence that Russian believed -- Russians believed they had the ability to influence the administration through the derogatory information. I should add the sources privy to the descriptions of the communications written by U.S. intelligence caution that the Russian claims to each other could have been exaggerated or even made up.

The details of the communications shed new light on information U.S. intelligence received about Russian claims of influence. The contents of the conversations made clear to U.S. officials that Russia was considering ways to influence the election, even if their claims turned out to be false. As CNN first reported, the U.S. intercepted discussions of Russian officials bragging about cultivating relationships with Trump campaign aides, including Trump's first national security adviser Michael Flynn, to influence Trump himself.