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Deadly Accident At Ohio State Fair; Scaramucci Alerting FBI About Leaks of His Financial Data; Trump to Ban Transgender People From Military Service; U.S.: North Korea Capable of Nuke Missile Launch Next Year. Aired 4:30-5a ET

Aired July 27, 2017 - 04:30   ET




[04:33:03] GOV. JOHN KASICH (R), OHIO: This fair's been here a long time. This is the worst tragedy in the history of the fair.


DAVE BRIGGS, CNN ANCHOR: A deadly accident at the Ohio state fair. People sent flying more than 20 feet from one of the most popular rides.

CHRISTINE ROMANS, CNN ANCHOR: Is the White House communications director accusing the chief of staff of leaking a cryptic message from Anthony Scaramucci?


DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I will do everything in my power to protect our LGBTQ citizens.


BRIGGS: Despite that promise, the president now says transgender people should not serve in the military. And overnight, the Justice Department with another surprise move angering gay rights advocates.

We have reporters at the Pentagon, Capitol Hill, the White House, and DMZ with all of our top stories.

Welcome back to EARLY START. I'm Dave Briggs.

ROMANS: I'm Christine Romans. It is 33 minutes past the hour. Nice to see you this morning.

BRIGGS: And you.

ROMANS: Nice to see all of you.

Let's begin, though, with this tragedy on the opening day of the Ohio State Fair in Columbus. One person was killed when a ride malfunctioned. Seven others injured, three are in critical condition this morning.

And this accident caught on video. We're only going to show part of that video because of the graphic nature of it. Authorities say the victims were apparently thrown off the fireball ride when part of it broke apart.

BRIGGS: Ohio Governor John Kasich ordering all rides at the fair to be shut down and plans to travel there today. The governor also offering his condolences.


KASICH: It's kind of hard to imagine that you have family that goes to a state fair and those calls come that there was a terrible accident, a terrible tragedy, and somebody you love was involved.


BRIGGS: After the accident, people rushed in to help. Witnesses say riders were thrown some 20 feet in the air when a piece of the structure snapped.


[04:35:04] UNIDENTIFIED FEMALE: The ride, it goes really, really fast and goes in circles and rocks right to left. I heard a girl scream, help. I look over and seen something fly out. And then I'd seen it flat to the ground.

UNIDENTIFIED MALE: The whole part broke off. Two people flew out in the air. I was able to get off the ride. It happened simultaneously. Looked to the right, seen the car flying, two people flying out of their seats. It was crazy.

UNIDENTIFIED FEMALE: It just looked like, I don't know, something I never seen before.

SUSIE BUCHANAN, ATTENDED FAIR: I feel terrible for those people that they've left behind, their families. You know, you come over, you think you're going to have a lot of fun. Then you end up with something like this. This is really a shame for those families.


ROMANS: The fair's chief ride inspector says there were no red flags when the fireball ride was examined before the tragic accident. We mentioned all the rides have been shut down until they each can be inspected. State officials say the fair will be open this morning with all other activities resuming as scheduled.

BRIGGS: Some apparent infighting at the highest levels of the White House with the president's new communications director seeming to suggest a White House chief of staff, Reince Priebus, had a hand in leaking his financial disclosures.

Now, Anthony Scaramucci says he's going to the FBI. This bizarre episode began with a cryptic tweet from Scaramucci. In light of the leak of my financial disclosure info, which is a felony, I will be contacting the FBI and the Justice Department. #swamp. And he tagged Reince Priebus.

ROMANS: Now the reference to Priebus is not at all clear. But CNN contributor Ryan Lizza tweeted this: In case there's ambiguity in his tweet, I can confirm Scaramucci wants the FBI to investigate Reince for leaking.

All this coming after a "Politico" story that listed millions in earnings and salary from Scaramucci's ownership stake in SkyBridge before he left to go to the Export/Import Bank back in June. It's not entirely clear whether Politico got the document by leak or public record. In an interview taped before all this happened, Scaramucci said this --


ANTHONY SCARAMUCCI, WHITE HOUSE COMMUNICATIONS DIRECTOR: I know I'm in the cesspool called Washington or a swamp called Washington. So, it will be virtually impossible to get rid of every leak. But I think we can take dramatic steps to get rid of leaks.

One of the big problems here that I'm discovering in the comms team is that senior people are really the guys doing the leaking, and they ask junior people to leak for them. And so, I'm very proud to be reporting directly to the president so that I can hermetically seal off the comms team from this sort of nonsense.


BRIGGS: That drew this response from the DOJ. Quote: We have seen an astonishing number of leaks in the classified national security information in the recent months. We agree with Anthony that the staggering number of leaks are undermining the ability of our government to function and to protect this country."

ROMANS: After all this went down, Scaramucci deleted his initial tweet and sent this one: Wrong! Tweet was public notice to leakers that all senior administration officials are helping to end the illegal leaks. And again, he tagged Priebus.

So, we reached out to Ryan Lizza who stands by his reporting that Scaramucci does want Priebus investigated.

BRIGGS: The Justice Department filing a brief in a major federal lawsuit, claiming the landmark Civil Rights Act of 1964 does not apply to gay people. DOJ lawyers injecting themselves into the case of skydiving instructor Donald Zarda who claimed he was fired after disclosing his sexual orientation to a customer. Zarda was killed in a skydiving accident before the trial began, but the case is moving forward.

ROMANS: Now, the Justice Department's involvement is especially unusual because the DOJ is not a party to the suit. Lower courts have been split on this issue for years. The American Civil Liberties Union blasted the DOJ's position as a gratuitous and extraordinary attack on LGBT people's civil rights.

BRIGGS: That move coming just hours after president Trump announced on Twitter his intention to ban transgender people from serving in the military, both the decision and the announcement coming without a plan in place to implement the very change. It leaves thousands of active duty service members around the world who are transgender in limbo.

BRIGGS: The president's decision met with bipartisan outrage on Capitol Hill. Sources tell CNN, House Republican leaders knew the White House was looking to change policy related to transgender people, but only regarding the use of taxpayer money for medical treatments. The announcement of a total ban going far beyond what was expected, catching many in Congress by surprise.

More this morning from CNN's Barbara Starr. She's up at the Pentagon.


BARBARA STARR, CNN PENTAGON CORRESPONDENT: Christine, Dave, the president's tweets catching the Pentagon and the heads of the military services by surprise. The president saying the United States government will not accept or allow transgender individuals to serve in any capacity in the U.S. military. This appears to close the door to transgender persons being recruited into the military and open the door to those already serving being forced out of the military.

[04:40:11] There may be as many as 6,000 transgender persons already on active duty. One of the criticisms that has been levied in public is the medical costs that would be associated. But a Rand Corporation study has estimated any medical costs, any medical treatment for transgender persons in the military could amount to $8 million or so compared to nearly $50 billion in the annual military medical care health bill.

So, one of the questions now is how does all of this proceed, how does a tweet from the president of the United States be translated into actual military guidance and policy so commanders around the world know how to proceed -- Christine, Dave.


BRIGGS: Barbara Starr at the Pentagon, thank you.

The Senate will be back at it after another swing and miss on health care. Senators rejected a repeal-only proposal with seven Republicans joining Democrats opposing the GOP measure. Now, momentum seems to be building for a so-called skinny repeal of Obamacare. That would likely keep the Medicaid expansion but eliminate the individual and employer mandates.

ROMANS: It could buy time for Senate Republican leaders to hammer out a final bill in conference committee with the House. That appears Democrats are changing their opposition approach.

We get more from CNN's Ryan Nobles on Capitol Hill.


RYAN NOBLES, CNN WASHINGTON CORRESPONDENT: Dave and Christine, good morning.

And this will be another important day on Capitol Hill as it relates to Republicans' hopes to repeal and replace Obamacare. At some point on Thursday, the 20 hours of debate will be over after the motion to proceed, and then the amendment process begins.

But we don't exactly know how this amendment process will play out. Our initial thought was that Democrats would use this as a public relations opportunity to offer up hundreds of amendments that would force Republicans to take tough votes on issues related to health care. But last night on the Senate floor, Senate Minority Leader Chuck Schumer called an audible, saying that Democrats would not offer up any amendments until Republicans show the details of their plan, the so-called skinny repeal.

Now to a certain extent, this is just theater by the minority leader. Democrats will never have enough votes to stop the process if Republicans are able to cobble together at least 50 votes on a plan that they can agree on. But at this point, that seems like a long shot.

Republicans still have yet to write the language of the so-called skinny repeal. And we don't exactly know what will be contained in the legislation.

Meanwhile, a group of bipartisan governors including some from key states of Ohio and Nevada sent letters to both McConnell and Schumer, pleading with them to return to regular order as it relates to health care and pass a bill that has bipartisan support. Now, this is something that still seems unlikely -- Dave and Christine.


ROMANS: All right. Ryan Nobles for us this morning, thank you.

Lowering premiums has been a consistent theme during the health care debate. But a so-called skinny repeal of Obamacare will do just the opposite. That's because it eliminates a few provisions that keep costs low like the employer mandate, requiring that companies provide insurance for all full time workers, with the individual mandate compelling all Americans to have health insurance or pay a penalty.

The individual mandate has met mixed reviews, but insurers, experts, and advocates all stress how important it is to stability, that's because it brings younger, healthier people into the insurance market. And they offset the higher costs for those who need more care. Without it, the CBO says premiums would rise about 20 percent over the next decade, leaving 15 million fewer people with health insurance.

And rising premiums also costs the federal government. It will have to pay more in subsidies to help people afford coverage.

BRIGGS: Yes, it's going to be a difficult case to make. The president promised better and cheaper health care. What does the skinny repeal get you in the way of better or cheaper? Does it accomplish either?

ROMANS: No. The other thing is, I think that the term skinny appeal, some people are taking issue with it because it seems like, oh, it's like the diet drink, you know? It must be better for you. You know, it --

BRIGGS: It cheapens this country's health care.

ROMANS: Exactly.

BRIGGS: All right. Ahead, could the president make a recess appointment to replace Attorney General Jeff Sessions? Democrats already working to prevent that, and Republicans at least seem to agree.


[04:48:48] BRIGGS: President Trump not letting up on his Attorney General Jeff Sessions. Sources telling CNN the president is being urged by some of his advisers to consider making a recess appointment to replace his attorney general in order to avoid a messy confirmation process. There are several political and procedural hurdles, and Senate Democrats are already working on strategies to block such a move.

CNN's Jeff Zeleny has more from the White House.


JEFF ZELENY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Christine and Dave, the escalating feud between the White House and Justice Department is continuing. But, increasingly, it's looking like a one- way feud.

Attorney General Jeff Sessions at the White House on Wednesday for routine meetings. He did not meet the president. President Trump, in fact, was not in the West Wing when he was in there for his meetings.

But President Trump, of course, is still sending messages on Twitter, sort of urging and goading the attorney general into investigating Hillary Clinton.

But at the White House briefing on Wednesday, the new White House Press Secretary Sarah Huckabee Sanders was asked again and again about the attorney general, what his standing is. And this is what she said:

SARAH HUCKABEE SANDERS, WHITE HOUSE PRESS SECRETARY: Look, you can be disappointed in someone but still want them to continue to do their job. And that's where they are.

[04:50:01] REPORTER: Does he want him to continue in that job?

SANDERS: I think that I made clear last week if there comes a point there doesn't, he'll make that decision.

ZELENY: The reality here, though, is the people we talked to in the Justice Department say that Jeff Sessions is simply doing his job. He's going to keep his head down, do his job, focus on immigration, sanctuary cities, other matters.

As this fight goes on, it looks like it's becoming more business as usual -- the attorney general keeping on with his job. Capitol Hill, Republican senators, one more reason to not be pleased by this president -- Christine and Dave.


ROMANS: All right. Jeff Zeleny, thank you.

Dramatic new video of that rescue operation that saved 17 stranded hikers from raging floodwaters Monday in Arizona. Look at that video. Oh my gosh! This footage shows a chopper rescue team discovering flood victims.

They're on a rock clearing in the mountains. This is east of Tucson. You can see a crew member being lowered down, down there to that rock clearing.

Look -- look at the water rushing around. There's not any place safe. Look, this rescuer is returning to the chopper with a child in his arms. The hikers say they were walking through Sabino Canyon in Pima, Arizona, when there were flash flood alerts on their phones, but they were unable to outrun the water. They were lucky.

All right. Fifty-one minutes past the hour.

Stocks have never been higher. I'm like a broken record here. All three indices hitting new records. We'll tell you why on CNN "Money Stream" next.


[04:55:37] BRIGGS: The U.S. believes North Korea will be able to launch a reliable, nuclear capable intercontinental ballistic missile by early next year. That's two years sooner than previous assessments. According to a U.S. official with access to the latest intelligence, right now, the Kim Jong-un regime is marking the 64th anniversary of the armistice that ended the Korean War over six decades ago.

CNN's Will Ripley joining us live from the Korean Demilitarized Zone.

Will, extraordinary access you have to the situation there. Thoughts were we were ripe for another test. What's the story there now?

WILL RIPLEY, CNN INTERNATIONAL CORRESPONDENT: Well, we have been monitoring, along with the South Korean military and the U.S. military from the South Korean side of the demilitarized zone. I'm standing here in South Korea, along the 38th parallel. But just beyond that river is the North Korean village. And you see

North Korean soldiers, if you're looking through the binoculars, like the South Korean troops who were stationed here. There hasn't been a ballistic missile test as some had anticipated after seeing heavy machinery rolling into a North Korean launch site.

But just yesterday, North Korea did test a component that could be used in a submarine launched ballistic missile, and a possible reason why we haven't seen a missile in the air today might have to do with the weather. It's raining over the launch site. And there's also a chance for rain tomorrow.

But it's something that everybody's watching closely, given that the U.S. analysts now believe North Korea will have a reliable intercontinental ballistic missile that could potentially deliver a nuclear warhead to the mainland U.S. by early 2018. This is much sooner than anyone would have predicted even just six months or a year ago.

Meanwhile, North Korea putting out a new statement within the past couple of hours urging the United States to stop what it calls a hostile policy on this armistice day. The day that the agreement was signed that stopped the fighting of the Korean War back in 1953, a very important day on both sides of the peninsula.

South Korea has tried to extend an olive branch. They've asked North Korea to get together for peace talks. And that offer has so far been met with silence from the North -- Dave.

BRIGGS: Will Ripley, live for us near the DMZ -- thank you, my friend.

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

Just on the top of the hour, that means it's money team. Global stocks higher after another record for Wall Street. Stocks have never been higher. I sound like a broken record, but that's because they keep breaking records.

All three major indices closing at record highs. The Nasdaq is up nearly 20 percent this year. A solid economy and strong earnings are driving things here.

AT&T and Boeing reporting big corporate profits. In fact, Boeing stock had its best day in eight years, Briggs, jumping more than 9 percent after boosting its profit forecast. This is a company, a stock that is -- people like the stock sometimes because it has a high dividend yield. And, boy, yesterday, it sure delivered on the price.

More earnings on the way today including Verizon, Procter & Gamble, and Amazon.

Also helping stocks, the Federal Reserve is holding interest rates steady after Fed Chair Janet Yellen and company concluded its two-day meeting. The Central Bank says it will begin selling off its $4 trillion balance sheet soon.

Analysts think that means September. It left rates alone after three hikes since December. Interest rates affect borrowing costs, raising rates for things like credit cards, auto, and student loans, and savings accounts.

Facebook's newsfeed is running out of ad space. The company reported second-quarter results and revenue grew 45 percent. Now, for any other company, that would be phenomenal. Revenue up 45 percent, not Facebook.

Sales have grown at least 50 percent the last five quarters because of mobile ads. But its current ad space has peaked. It plans to make up the difference with higher prices and new slots in videos and its messaging apps.

Gee, I hope they can find more ways to fit ads in there for me.

BRIGGS: That is a tough bar to jump over for Facebook and Mark Zuckerberg.

All right. EARLY START continues right now.


ROMANS: Is the White House communications director accusing the chief of staff of leaking? A cryptic message from Anthony Scaramucci.


KASICH: This fair's been here a long time. This is the worst tragedy in the history of the fair.


BRIGGS: Deadly accident at the Ohio State Fair. People sent flying from 20 feet off of one of the most popular rides.

Good morning and welcome to EARLY START, everybody. I'm Dave Briggs.

ROMANS: I'm Christine Romans. It is Thursday, July 27th. It is 5:00 a.m. exactly in the East.

Some apparent infighting at the highest levels of the White House with the president's new communications director seeming to suggest White House Chief of Staff Reince Priebus had a hand in leaking his financial disclosures.