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EARLY START

Big Blow for Democrats; Senate Republicans Set to Unveil Health Bill; Failed Terror Bombing at Brussels Train Station. Aired 4:30-5a ET

Aired June 21, 2017 - 04:30   ET

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


(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

[04:30:16] KAREN HANDEL (R), WON GEORGIA HOUSE RACE: Thank you. God bless you.

(CHEERS AND APPLAUSE)

(END VIDEO CLIP)

CHRISTINE ROMANS, CNN ANCHOR: Painful reality this morning for the Democratic Party. Tens of millions of dollars not enough to beat the Republicans in a closely watched election special election in Georgia. Can the Democrats recover with a message that will resonate in 2018?

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

DAVE BRIGGS, CNN ANCHOR: I'm Dave Briggs. It is 30 minutes past the hour.

It is the most expensive House loss in U.S. history. Democrats this morning searching for a new strategy after suffering defeat in high stakes, high cost special election in Georgia. There's your numbers. CNN projecting Republican Karen Handel beat Democrat Jon Ossoff by four points in a district Republicans have typically won by 20 plus.

Still, it was enough to provide a big morale boost to Republicans worried about President Trump's potential to drag down GOP candidates in the midterm elections next year.

ROMANS: Last night, after declaring victory, Handel didn't minimize the president. She and her supporters embraced him. Listen.

(BEGIN VIDEO CLIP)

HANDEL: And a special thanks to the president of the United States of America.

(CHEERS AND APPLAUSE)

(CHANTING) (END VIDEO CLIP)

ROMANS: Jon Ossoff falling short despite raising $23 million in the most expensive House race in American history. In conceding, he tried to paint a hopeful picture of Democratic victories to come.

(BEGIN VIDEO CLIP)

JON OSSOFF (D), LOST GEORGIA HOUSE RACE: This is not the outcome any of us were hoping for. But this is the beginning of something much bigger than us. It's extraordinary what you have done here. The fight goes on.

(END VIDEO CLIP)

BRIGGS: Republican Ralph Norman also won a special election in South Carolina's fifth district. That's the Frank Underwood seat with earlier wins in Kansas and Montana, Republicans are now 4-0 in special election to replace Trump appointees.

Let's break it all down. Let's bring in CNN politics reporter Eric Bradner live from Atlanta.

Eric, you were at Karen Handel's headquarters for election night at that victory party. We heard chants of Trump, Trump, Trump, though we didn't hear her say the name Trump interestingly.

ERIC BRADNER, CNN POLITICS REPORTER: That's right.

BRIGGS: Was that a pro-Trump crowd, or was that a politics is local/Karen Handel crowd?

BRADNER: Everybody was wearing Karen Handel stickers but that was a pro-Trump crowd. That was clearly a group of Republicans that was eager to prove that the Democrats could not put all this national attention on this race and come get a big win in their backyard. It was all about beating national Democrats, Nancy Pelosi.

In the room, you even heard Hillary Clinton and Barack Obama's names, even though the two were off the national political stage right now.

It was a pro-Trump crowd and over the course of the night, they were getting more and more juiced. You could kind of see where things were going early on because the first results that came in were early vote numbers from Fulton County, which is really a key swing county in the district, and they were better than expected for Handel. At that point, even Democrats I was talking to were sort of acknowledging -- well, we don't know yet but this is not looking good.

So, the crowd started to build energy early in the night and by the time Handel took the stage, they were ready to explode.

ROMANS: So interesting because Democrats assume Trump is some sort of liability. They're banking on Trump being a liability in some of these districts and he was not a liability for Karen Handel last night at all and that means they have to re-tweak their strategy or at least their assumptions.

How are they going to recalibrate? I mean, they are 0-4 on these special elections. They tried to keep it local in this one, but -- I mean, who is their national figure? What is their national platform? What is the message that's going to, you know, unify them if they're going to try to -- if they're going to try to move forward here?

BRADNER: Those are all great questions and the problem for Democrats is they don't have answers. This was, you know, their right in pointing out, this is a quite conservative district. All of these special elections were in typically Republican territory, but it's also demoralizing to lose these because progressive activists pumped $23 million into Ossoff's campaign, and that's not big donors. That's a lot of online small dollar donations from people that are just really jazzed to be part of the resistance, to oppose Trump.

And so, the question is whether Democrats can maintain the momentum in their base now that they don't have any victories to show for it.

[04:35:06] The party is going to try to recalibrate today around the idea that the elections they're going to be competing in next year, the midterm seats they're targeting are all friendlier territory for Democrats. It's Republican held seats that are in suburban areas sort of like Atlanta but -- but that have more Democrats already living there. So, maybe not such an uphill battle, but they've got to find a way to build momentum and this was their shot at it and they fell short.

BRIGGS: Eric, there was a name you mentioned earlier that Republicans mentioned a lot in the campaign and that's Nancy Pelosi. Is this a referendum on her?

BRADNER: Well, it's the same play book Republicans have been executing in midterms since 2010, right? In 2010, 2014, it worked really well for them and, yes, I mean, that's what Republicans are trying to turn this into because while Ossoff wanted to campaign on local issues, wanted to portray himself as a moderate, somebody that would reach across party lines, Republicans just hammered him over and over and over with this idea that he would do Nancy Pelosi's bidding.

It's tough for Democrats to escape and it's something they can't quite match. It's not motivating to Democratic voters to say, well, you know, this Republican is going to vote with Paul Ryan the way it is for Republicans to say, this is a reliable Nancy Pelosi supporter. So, it's something Republicans have kept going to over and over and over and it works.

You could see it in the direct mail pieces on the air and on the TV ads. It's a message they return to and it's what worked.

ROMANS: All right. Eric Bradner, thank you so much. You've had a long night there in the room when Karen Handel won. Thank you so much, sir. Nice to see you this morning, Eric.

BRADNER: Thank you. ROMANS: All right. The Republican health care bill is still secret this morning but not for long. Senate leaders are prepared to release what they're billing as a discussion draft. It's the opening salvo on what top Republicans hope will be a final push to a vote on repealing and replacing Obamacare before the upcoming congressional recess, that's just over a week away.

CNN's Phil Mattingly has the latest from Capitol Hill.

(BEGIN VIDEOTAPE)

PHIL MATTINGLY, CNN CONGRESSIONAL CORRESPONDENT: Well, Dave and Christine, we have a date for the bill -- the bill that's been crafted behind the scenes, the bill that we still don't know what's actually inside of it. We do know, at least according to the Senate majority leader, that Senate Republicans will be releasing at least a draft discussion of the bill on Thursday.

We also know a target for a vote next week, likely on Thursday of next week. Guys, things are moving very quickly for a process that we haven't seen much light toward at least over the course of the last couple of months. Senate Republicans still have a lot of work to do and frankly, they have a lot of feelings to assuage inside their own conference.

Take a listen to this.

REPORTER: Have you seen -- what have you seen of the health care bill?

SEN. JOHN MCCAIN (R), ARIZONA: Haven't seen it.

REPORTER: Is that a problem?

MCCAIN: Oh, no. Never a problem. No, of course not. I always like to move forward with legislation that I haven't seen. That's one of the practices I've enjoyed around here.

REPORTER: Did you get any more clarification today, sir?

MCCAIN: We have lots of conversations. Every lunch, we have conversations. We have more and more conversations. It's wonderful the conversations we have.

REPORTER: Does this make you want too not put your support behind this? Since there's not time --

MCCAIN: I haven't seen it. How can I put my support behind it if I haven't seen it?

SEN. MIKE LEE (R), UTAH: It's not being written by us. It's apparently being written by a small handful of staffers for members of the Republican leadership in the Senate. So, if you're frustrated by the lack of transparency in this process, I share your frustration. I share it wholeheartedly. MATTINGLY: And, guys, I'm sure you picked it up, but Senator John McCain was being fairly sarcastic there. The interesting element here is this -- you have a lot of rank-and-file Republicans who have expressed kind of unease with the process, expressed concern that things haven't been as public, that there won't be a lot of time to digest a final proposal, that the American people haven't seen a lot of the final proposal.

But what you haven't seen is those same Republicans say they're objecting to this process. They won't vote for the bill. They're still leaving themselves open to voting yes. That said, they still don't have the 50 votes they need to actually pass this. They have a lot of work to do.

But, first, they need to finalize the policy in the areas where they're still not certain where the policy is going to end up, there are still significant differences, whether it's the Medicaid expansion in the Affordable Care Act, how far they cut back regulations from the Affordable Care Act, even things like the structure of the tax credit. At least as of this point, those things have not been finalized. There's no full term agreement and that means there's still a lot of work to do. Not a lot of time to do that work. We'll see over the course of the next couple of days -- Dave and Christine.

(END VIDEOTAPE)

ROMANS: All right. Phil, thanks for that.

Sean Spicer was asked about this yesterday about acknowledging essentially, the president said that the House version of health care reform was mean and he said the president is going to insist that there's heart.

BRIGGS: Right. What does that mean? More spending?

[04:40:01] Less cuts to Medicaid? We've heard there's going to be more cuts, steeper cuts to Medicaid. That would not seem to go over well with the president. But he was also asked if the president knows what's in this bill, and the indication from Sean Spicer is that he does not, and neither does Mike Lee as you saw on that piece from Phil and he's on that 11-person committee. He has not seeing what's in this bill.

ROMANS: Senator McCain's performance in the hallway was classic.

BRIGGS: Fiery, vintage McCain.

ROMANS: Classic McCain.

All right. Thank you.

Breaking overnight, Uber founder Travis Kalanick resigning as CEO. This is after months of scandal at uber. Investors demanded he step down. What is Kalanick saying? We'll have that in just a few minutes. But, first, as the White House works to keep auto jobs in the U.S., Ford is moving Focus production to China. Ford previously said it would ship production to Mexico. They want the Michigan plant to make more profitable vehicles like SUVs.

But by moving Focus assembly to China, that factory won't cut any jobs, and it saves the company $500 million, because after seven years, auto sales are slowing especially for smaller vehicles, so auto makers are looking to cut costs. Ford plans to trim $3 billion in cost this year.

President Trump attacked Ford in the campaign trail from moving production to Mexico and claimed victory when the company cancelled plans for a new plant. When reached for a comment, Commerce Secretary Wilbur Ross did not criticize the company, instead saying in a statement, The company will move facilities to the U.S. once President Trump's policies take hold.

But the idea of moving focus production to China, making the car there and then sending it back to the United States for American consumers to buy, that's exactly what Donald Trump campaigned against.

BRIGGS: Rallied against. It's part of the new CEO at Ford or was this in the works well before?

ROMANS: This is about cost cutting. When they make a move like this, this is something that's months and months -- this has been in the works. It's all about cost cutting and focusing on building the profitable vehicles here in the United States.

BRIGGS: They want to build them here, but bottom line is what matters to Ford.

OK, authorities in Belgium say they have identified the attacker who detonated a bomb at a Brussels train station. This is the third terror attack in Europe in as many days.

We're live in Brussels ahead on EARLY START.

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[04:46:24] BRIGGS: Belgium's national security council meeting this morning following a failed terrorist bombing at the central train station in Brussels. Authorities say they now know the identity of the suspect. He was fatally shot by soldiers after what officials call a small explosion in the business transportation hub. Nobody was injured in attack.

Still, Belgium's foreign ministry keeping the country's threat level at three which warns of a possible and likely threat ahead.

Let's go live to Brussels and bring in CNN's Erin McLaughlin live for us.

What's the latest, Erin? ERIN MCLAUGHLIN, CNN INTERNATIONAL CORRESPONDENT: Well, Dave, we

understand from Belgian media that will are ongoing police raids in Molenbeek area of Brussels. That is an area that has been linked to previous terror attacks. You may remember, that is where they found and arrested Saleh Abdeslam, one of the Paris attackers.

In terms of that neighborhood's connection to this failed bombing, Belgian media reporting that it is the home of the suspect, 37 years old. We are not clear though at this point just sort of what explosives this individual used to carry out this failed attack. We know that it happened at this train station at 8:30 p.m. in the evening. A small explosion, military troops inside opened fire, killing the suspect. No other injuries.

Take a listen to what one eyewitness had to say.

(BEGIN VIDEO CLIP)

NICOLAS VAN HERREWEGEN, WITNESS (through translator): When I walked down to the platform, there was a man screaming, screaming and screaming. He was talking about jihadis and things like that. At some point he screamed Allahu Akbar and detonated the small suitcase he was holding next to him. Then, people started to escape. They left and so on. At this point I walked back down to the platform to alert my colleagues so they could evacuate the station.

(END VIDEO CLIP)

MCLAUGHLIN: As you can see, it is business as usual at this train station, opening up at 8:15 in the morning. Belgian prime minister saying it was open in a show of defiance. This country is determined to maintain its freedoms. There's also a Coldplay concert scheduled for Brussels later in the evening. That will go ahead as well albeit with increased security -- Dave.

BRIGGS: No doubt about that. Erin, thank you.

ROMANS: All right. After months of scandal, the Uber founder Travis Kalanick is out as CEO. A major disrupter. It turns out he was too disruptive to keep running his own company. We got that next.

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[04:53:05] BRIGGS: Ah, the question that had Twitter abuzz. Was it or was it not a failed hug?

Senator Marco Rubio launching a tongue in cheek Twitter investigation to get to the bottom of this viral photo. It shows the Florida senator apparently getting dissed in mid embrace by Ivanka Trump. The awkward moment setting out a tweet storm from Rubio that would make the president envious.

ROMANS: The senator writing, Just left Intel Committee and informed meeting today with Ivanka Trump blowing up Twitter alleged failed hug. Investigating. Will respond soon.

Moments later, Rubio tweeted: New photo emerges providing more insight into alleged failed hug, faces blurred for security purposes.

BRIGGS: And finally this from the senator: Based on review of my evidence and my own recollection have concluded no hug was even attempted and press covfefe of alleged failed hug is false.

Covfefe is, of course, a mysterious word used weeks ago by President Trump in what appeared to be a Twitter mishap.

ROMANS: I know. It's even adorned your --

BRIGGS: Oh, it's even in my coffee mug.

ROMANS: -- coffee mug now.

After Rubio's conclusion that no hug was ever attempted, first daughter Ivanka revved up her Twitter account, tweeting: Anonymous sources, Marco Rubio planned the alleged failed hug. I have no comment but I would have hugged him anyway. Anonymous sources say, rather.

For what its worth, the president's daughter and Senator Rubio met at Capitol Hill to discuss tax reform and making sure their pro-family, parental leave policies in any kind of plans.

BRIGGS: I've reviewed the evidence. It was a failed hug. It was an awkward moment. But touche for making the most out of it. Well- played.

ROMANS: Well, OK, so her hair is kind of out. So, it looks it's like a split second in time. Anything can look weird if you just take that quick shot.

BRIGGS: That's how you play it on social media. That was brilliant.

Well, it's opening day for the British government. Pageantry and politics coming together for the traditional state opening of parliament.

[04:55:01] The ceremonial event highlighted by the queen's speech marks the formal start of the parliamentary year. It comes at a critical time for embattled Prime Minister Theresa May after terror attacks and the Grenfell Tower fire.

CNN international diplomatic editor Nic Robertson joining us live from 10 Downing Street, London.

Good morning to you, Nic.

We understand this is a low key by standards we've seen in recent years. Is that the case?

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: That is the case, and normally, the queen rides from Buckingham Palace in horse drawn carriage. Lots of the horse guards following her as she comes here, and that won't be the case this time. She'll be in a car. She won't be wearing her crown. The queen, of course 91, now. The crown weighs about two and a half pounds. When she arrives at parliament, the crown will be carried in front of her.

So, you know, it is going to look different and feel a little different. The substance is all the same. This is a speech that the queen gives, it's written by the prime minister that outlines what the prime minister hopes to achieve legislatively during the coming year. It's going to be different in as much as this will be a speech that will be designed to span two years.

The prime minister, of course, coming out of disastrous elections, so there won't be some of the -- some of the social issues that she was criticized on. We're not expecting to hear that she's cancelling preschool lunches for under 11s, that she's not going to do away with the pension due to inflation. So, this is going to be different, but a lot of the legislation is going to be about Brexit.

But this is a prime minister that's going to sit there and listen to the queen outlining what she, the prime minister hopes to achieve knowing the moment she doesn't even have the votes to do it. The deal she's trying to strike with a small party in Northern Ireland hasn't been concluded. So, this is not the way it normally happens and certainly not the way the prime minister was expecting this to go, Dave.

BRIGGS: Tough road ahead there for Theresa May.

Nic, thank you.

ROMANS: All right. Let's get a check on CNN "Money Stream" this morning.

Global markets and U.S. futures lower after Wall Street pulled back from records. A U.S. stock slumping as oil prices fell more than 2 percent. You're back in a bear market for oil, folks. A 20 percent drop. It's down 22 percent this year to be exact.

Investors worrying once again over a supply glut. The U.S. and some OPEC countries are still ramping up production. But even with this speed bump for stocks, markets still very close to record highs. Investors shrugging potential risk, as they hold out hope for tax reform, which House Speaker Paul Ryan says he still wants to pass this year. He's still sounding officially optimistic on tax reform, real tax reform.

Breaking overnight, the Uber founder Travis Kalanick is resigning as CEO. This is after months of scandal. Big investors demanded he go. That's just a week after Kalanick took a leave of absence, citing the unexpected death of his mother.

Travis Kalanick helped found Uber back in 2009. He built this into a transportation and technology power house, but he also fostered a work place culture that's causing the current crisis at Uber, including accusations of discrimination and sexual harassment and the investigation that followed led to the firing of 20 employees and the exodus of top executives.

Kalanick's departure deepens a leadership crisis there. He says in a statement, he's leaving for the good of the company so that Uber can go back to building instead of enduring another fight. The former Attorney General Eric Holder sort of spearheaded this big scrub of the -- of the management style and the business culture there and found that they did not do enough to prevent sexual harassment and the brogrammer culture as it's called.

This idea of being a disrupt in every kind of way. It's great when you're starting a company to be a disrupter, but to be so disruptive as a corporate culture --

BRIGGS: Too much.

ROMANS: It was too much.

BRIGGS: So, with a company worth $70 billion, is corporate culture more important in the bottom line or is it part of the bottom line?

ROMANS: It's part of the bottom line, and they have a leadership crisis. You know, when you have a company like that that's growing so quickly and your leaders can't effectively manage, that's a problem.

BRIGGS: I thought the Uber update today was that in-app tipping is coming to Uber.

ROMANS: Is it?

BRIGGS: Which is a big deal for people that use Uber and I know for the drivers in this country.

All right. EARLY START continues right now.

(MUSIC)

(BEGIN VIDEO CLIP)

HANDEL: Thank you. God bless you.

(CHEERS AND APPLAUSE)

(END VIDEO CLIP)

BRIGGS: A body blow for Democrats. The Republicans win a closely watched special election in Georgia. What does it mean for the president's agenda and can Democrats ever regain their footing in Trump country?

ROMANS: Good morning and welcome to EARLY START this Wednesday morning. I'm Christine Romans.

First day of summer.

BRIGGS: First day of summer?

ROMANS: First day of summer.

BRIGGS: That makes me happy. ROMANS: It's still dark outside but it is going to be a long day. I

promise you this will be the longest day of the year.

BRIGGS: It will for Democrats.

I'm Dave Briggs. It's Wednesday, June 21st, the first day of summer.