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George H.W. Bush Hospitalized; Obama Commutes Chelsea Manning's Sentence; WikiLeaks Founder Assange's Promise; Trump's Final Days Before Inauguration. Aired 5:30-6a ET

Aired January 18, 2017 - 05:30   ET

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

[05:30:00] JOHN BERMAN, CNN ANCHOR: Let's get the latest on this from Athena Jones, live for us in Washington. Athena, what are you learning?

ATHENA JONES, CNN REPORTER: Good morning, John. Well, this is concerning and the details are still coming in from the "Houston Chronicle." His chief of staff told them that he says he's doing fine, he's doing really well. Doctors have a couple of theories about what is causing his ailment but that he's responding to treatment and is expected to be discharged in the next couple of days.

Now, of course, George H.W. Bush, the nation's 41st president, is the oldest living former U.S. president and he has been hospitalized a few times in the last several years for various ailments. He was hospitalized twice in 2012 for bronchitis and ended up -- ended up staying in the hospital for two months. He was hospitalized again in 2014 for shortness of breath, and in 2015 he had a fall at his house in Kennebunkport, Maine and broke a vertebrae in his neck.

And so he's had a series of health problems over the last few years but, of course, he is 92 years old. And he has also done some things that you wouldn't expect of an older person. He's celebrated four birthdays -- four major milestone birthdays by jumping out of a -- by parachuting out of an airplane. So he's been active but in more recent years has had some health struggles.

This, of course, could affect his son's plans, Bush 43 -- George W. Bush's plans for attending the inauguration on Friday, but we'll have to see what happens as more details come through.

BERMAN: And, obviously, we all wish him well and we're watching very, very closely. His staff says they expect him to be home, according to the local reports, within a few days, which is something they have signaled before when he's gone in for these types of instances. All right, Athena Jones for us in Washington. Thanks so much.

CHRISTINE ROMANS, CNN ANCHOR: All right. With just two days to go before a new president takes office, the outgoing president drops a big surprise. It may have a huge effect on future leaks and leakers of government secrets. President Obama rocking Washington by commuting Chelsea Manning's 35-year prison sentence. The former Army private convicted of leaking 750,000 pages of documents and videos is now set to be released in May. There has been no response so far from Donald Trump or the transition but the move is whipping up immediate controversy and a backlash, and not just from Republicans. A senior Defense official tells CNN Mr. Obama shortened Manning's sentence over objections from his own Secretary of Defense, Ash Carter.

Manning released the secret documents in 2010 through WikiLeaks, which has been advocating for her release from the moment she was arrested. Of course, this is -- in this past election, WikiLeaks and its founder, Julian Assange, leaked documents that the Intelligence Community says were hacked by Russia with the aim of helping Donald Trump win the election. For the latest let's bring in international diplomatic editor Nic Robertson, live in London. What's the reaction there?

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Well, Julian Assange here, the head of WikiLeaks, is hold up in the Ecuadorian Embassy because he believes that he'll be extradited to the United States because there's an investigation into his actions involved in WikiLeaks in releasing those 750,000 files that Chelsea Manning gave to him. Chelsea Manning, according to the White House, released because she has shown remorse -- because she has accepted responsibility because she has served six years so far and has tried to commit suicide in the past -- twice in the past two years.

A victory, that's how Julian Assange is calling this commutation. However, in the last couple of days, Julian Assange has tweeted that he would hand himself over to U.S. authorities if President Obama commuted Chelsea Manning's sentence. Now, his lawyer, in the past couple of hours, has tweeted that Julian Assange will make good on -- will stand up to -- or stand up and follow through with everything that he has said. Now, it remains to be seen if he will walk out of the doors of the Ecuadorian Embassy.

Of course, he has been in there because Swedish authorities want to question him about alleged sexual offenses in Sweden. He has said that if he went to Sweden he would fear that he would then be sent on to the United States despite the fact there's no extradition treaty between Sweden and the United States.

But what does this amount to right now? Well, potentially, if Julian Assange carries through with what his lawyer says he'll carry through, with what he said a couple of days ago he would do, then essentially he'd be handing himself over to Donald Trump and his administration, as you say, at a time when there are questions about the role that Donald -- that Julian Assange played in essentially facilitating the leaks that Russia provided that was believed by intelligence authorities to have been intended to put Donald Trump in office. What would Julian Assange say to authorities that question him then?

ROMANS: Wow, fascinating turn of events. All right, thanks for that. Nic Robertson in London for us. Thanks, Nic.

BERMAN: All right. Moments after the clemency announcement WikiLeaks tweeted "victory" and this brief statement from Julian Assange. "Thank you to everyone who campaigned for Chelsea Manning's clemency. You're courage and determination made the impossible possible." The ACLU and Amnesty International also cheered news of a commutation.

[05:35:09] ROMANS: The response on Capitol Hill, though -- wow, reactions from Democrats are muted and very harsh from Republicans. West Virginia Sen. Joe Manchin, he's a conservative Democrat. He says the shortened sentence was dead wrong and gave a green light to hacking and cyber attacks.

(BEGIN VIDEO CLIP)

SEN. JOE MANCHIN (D), WEST VIRGINIA: It was wrong. That was treason and espionage. It should have been 35 years.

(END VIDEO CLIP)

ROMANS: Republican Sen. Lindsey Graham told CNN's Dana Bash, "Manning stabbed his fellow soldiers in the back by releasing classified information and putting their lives at risk. President Obama, by granting clemency to Manning slapped all those who serve honorably in the face."

And Sen. John McCain calls the commutation "A grave mistake that I fear will encourage acts of espionage and undermine military discipline. It also devalues the courage of real whistleblowers who have used proper channels to hold our government accountable."

BERMAN: This morning, Donald Trump wakes up at Trump Tower, his final day there before moving to Washington. We are told the president- elect is finishing up the writing of his inaugural address and unlike the campaign, where he spoke largely off the cuff, where speeches were written by aides, this one the transition claims he is writing himself. CNN's Jeff Zeleny on the last full day for the president- elect in New York.

(BEGIN VIDEOTAPE)

JEFF ZELENY, CNN SENIOR WASHINGTON CORRESPONDENT: John and Christine, two days before Donald Trump takes office he is putting the finishing touches on his inaugural address. We are told that he is writing it himself after watching and reading several recent addresses and ones from history. He's studied President Ronald Reagan's and even President Barack Obama's.

Now, the president-elect made a quick trip to Washington last night for the first inaugural event, a Chairman's Global Dinner featuring diplomats from around the world, as well as Vice President-elect Mike Pence and some of their top campaign contributors. He is back in New York today scheduled to spend the final day working out of Trump Tower, his last day there before he becomes president before moving to Washington on Thursday.

Now, Washington is alive with activity -- all the traditional transfer of power. President Obama gives his last press conference today at the White House, even as four key confirmation hearings unfold on Capitol Hill.

Now, the list of House Democrats boycotting the inauguration continues to grow, now more than 50. But so far, no Senate Democrats have added their names to that list. That's important. Trump will need the cooperation of some of them to get his agenda through Congress, but it's also important to remember starting Friday, Republicans control the House, the Senate, and the White House for the first time in a decade. A new wilderness for Democrats if they're protesting or not -- John and Christine.

(END VIDEOTAPE)

BERMAN: All right, Jeff Zeleny. Thanks so much. As Jeff just mentioned, President-elect Trump was briefly in the nation's capital last night. He attended a dinner held for foreign diplomats to meet members of the incoming administration, and the president-elect was quick to praise former ExxonMobil CEO Rex Tillerson, his pick to be Secretary of State.

(BEGIN VIDEO CLIP)

DONALD TRUMP (R), PRESIDENT-ELECT: And we have great respect for your countries. We have great respect for our world. We have a man that I wanted right from the beginning, Rex Tillerson -- and these lights are bright but he's around here someplace. Where's our Rex? Wow, what a job. He ran the -- thank you very much. Thanks, Rex. I think it's tougher than he thought. He figured, you know, he's led this charmed life. He goes into a country, takes the oil, goes into another country. It's tough dealing with these politicians, right? He's going to be so incredible.

(END VIDEO CLIP)

BERMAN: You wonder if the confirmation hearings have been tougher than perhaps Rex Tillerson thought. He faced tough questions from Marco Rubio and the Senate Foreign Relations Committee. Rubio still has not committed as to whether or not he will vote to confirm Rex Tillerson.

ROMANS: All right. Donald Trump claiming another victory on job creation after Walmart and General Motors both announced U.S. investments. Here's the bottom line. Clearly, executives do not want to anger the incoming administration and there's a big question if this is just good public relations, not really a real change in their truly globalized business models.

Here are the automakers that have issued press releases in recent days touting job creation since the election. Ford promising 700 jobs in Michigan. Fiat Chrysler announcing 2,000 new positions -- same with GM. And finally, Hyundai as well. It didn't give specific job numbers but will invest $3 billion over the next five years. In total, that's at least 4,700 new jobs. Some of those were promised well before Donald Trump was elected.

So the question here, are these company responses to Trump's call for more American manufacturing -- for more American jobs or are these simply employment shifts now with the hope of lower corporate tax rates potentially in the future which would, of course, pay for all of this? Here's the reality check. The number of workers who make cars and auto parts, nowhere near the level it was in the early 2000's and automakers just hit back-to-back annual sales records in 2015 and 2016, so they're doing it.

You know, sales records with fewer workers, that's the bottom line of the industry. What a lot of folks in business are talking about this morning is how all of these companies really want Donald Trump to know that they are and have been creating jobs in the U.S. because they don't want to anger him and be at the other end of a 35 percent tariff on their industry.

[05:40:11] BERMAN: And, of course, the flipside is, you know, you didn't hear from American Apparel, you know, thanking Donald Trump when they're laying off more than 2,000 workers. Or Macy's, you know, for laying off --

ROMANS: Right.

BERMAN: -- 10,000 workers. Barnum & Bailey Circus, as well. All right. What does it mean for the cabinet nominees who will be up on Capitol Hill today? We'll talk to our political panel, next.

(COMMERCIAL BREAK)

ROMANS: All right. Donald Trump set to take the oath of office in just two days now. This is crunch time for the Senate to confirm its cabinet nominees. Let's get to the experts. "CNN POLITICS" digital and managing editor Zach Wolf and political economist Greg Valliere, chief strategist for Horizon Investments, who watches all of this with an eye on what it means for the people who are creating jobs, and making money, and making investments in this country. Hi, guys. Nice to see you again.

GREG VALLIERE, CHIEF STRATEGIST, HORIZON INVESTMENTS: Good morning.

ZACHARY WOLF, CNN POLITICS DIGITAL MANAGING EDITOR: Nice to see you.

ROMANS: Let's look at this line for today. I mean, I think the headliner is probably Congressman Tom Price for HHS and what he plans or wants to do with Obamacare -- what he says about Obamacare. But also, you know, Wilbur Ross, the Commerce secretary who, you know, wants to redesign NAFTA and redo our trade relationship, Zach, with China. These are no small feats.

WOLF: No, they aren't, they aren't small feats, and they're kind of core to Trump's message so it's going to be really interesting to see what he has to say and whether the Commerce Department and whether he and Ross are going to play sort of a heightened role in this Trump presidency than they have in the last couple of Democratic ones.

[05:45:08] BERMAN: So, I want to play you a little bit of what Donald Trump said in an interview overnight. He's continuing this feud with Georgia Congressman John Lewis. John Lewis said he is boycotting the inauguration because he says that Donald Trump will not be a legitimate president. John Lewis said this was the first time he will have done that. Apparently, "The Washington Post" is reporting that John Lewis, in 2001, did not attend the inauguration because he said George W. Bush wouldn't be a legitimate president. But look at what Donald Trump chooses to say about it -- listen.

(BEGIN VIDEO CLIP)

TRUMP: I think for him to have grandstanded -- because I think he just grandstanded, John Lewis, and then he got caught in a very bad lie, so let's see what happens. As far as other people not going, that's OK because we need seats so badly. I hope they give me their tickets. Are they going to give us their tickets?

(END VIDEO CLIP)

BERMAN: So, Greg Valliere, you know, you're looking at the inauguration speech -- the address on Friday and I know one of the things that investors -- people you talk to want to see is some kind of outreach from Donald Trump. Have we seen that yet in the transition and do you expect to see it on Friday?

VALLIERE: We haven't seen a lot of it, John. I think that he's got to make it clear that he's willing to work with Democrats, including Chuck Schumer who he called a clown a few weeks ago. But he needs to work with some Democrats if he wants to get infrastructure spending done if he wants to move quickly on tax reform. So I think these feuds which have characterized Trump's career could really hinder his ability to get a lot done.

BERMAN: And by the way, we should note if you look at his approval rating during this transition, historically low. He has numbers right now heading into the presidency that we just haven't seen before. Fifty-two percent disapprove of the transition. This just doesn't happen. So -- and it's getting worse.

VALLIERE: That's right.

BERMAN: So what has happened during the transition has made things worse for him.

VALLIERE: I've told both you and Christine my New Year's resolution is to not underestimate Donald Trump. Everybody in this town did that last year to their regret. And I do think he has the votes on just about everything. I think the concern for the markets is that many of his priorities will get done later, rather than sooner.

ROMANS: Yes. I mean, for the first time in a decade you've got the president -- that both chambers of Congress are run by the Republicans. The markets -- the world certainly expects there will be tax reform quickly and that there will be pro-growth policies, but what the president says about that on Friday will be key.

Zach, so what is the guess here about how much rift there is between Donald Trump and what he says and does and tweets, and whether he's going to be able to work with Republicans to actually get all these things through?

WOLF: Well, I think the thing that you kind of notice from his cabinet nominees as they come up is that maybe youdon't always listen to everything Donald Trump says. You have to wait and see what he does. You know, we'll have to see what kind of the details are in these legislative proposals, on Obamacare, on tax reform. We haven't seen any of that yet. We don't really know sort of, you know, how this sausage is going to get made at all.

VALLIERE: Right.

WOLF: So there's a lot of work to do for these guys.

ROMANS: But Greg, you've got him out there talking down the dollar. I mean, breaking tradition and protocol and saying the dollar is too strong. I mean, that just doesn't happen. Yes, America voted -- American voters who voted for him voted for a game-changer, but he's changing, you know -- he's changing a game and maybe I'm not sure he knows that he is.

VALLIERE: Yes. Sometimes his words he may feel aren't all that significant, but when you talk down the dollar that has a big impact on the markets. And if he's going to break all precedent -- no president or Treasury secretary has ever done this -- and he's going to talk down the dollar, if that's going to be part of his solution to improving our trade stance the markets may not like that.

ROMANS: But, you know, what's interesting, guys, both of you. You know, you've seen all these companies who've said that they're going to add jobs and make investments in the United States, and in many cases these were investments that were already planned before Donald Trump or would have happened, you know -- the pace of hiring. Walmart, for example, is essentially in line with what they've been doing.

You know, Greg, has he already changed business? I mean, are these companies -- their public relations perspectives are very quickly changed here and they're going to -- they're going to tout what they already were doing in the U.S. so not to anger this -- the president?

VALLIERE: I think a lot of companies are going to be lookingover their shoulder before they do anything. I think there's a new element of almost fear that's been injected. But my bottom line, as long as the stock market stays pretty good, as long as the economy stays pretty job, Trump should stay in fairly good shape politically.

BERMAN: Greg Valliere, Zach Wolf, great to have you with us this morning. Thanks so much, gentlemen.

WOLF: Thank you.

ROMANS: All right. Tiffany & Co. is an iconic luxury jeweler.

WOLF: Zach will savor it. (ph)

ROMANS: Yes, yes. Its flagship store, it just happens to be right near Trump Tower on Fifth Avenue. Guess what's happening? What is like to have, you know, the White House North as your neighbor? We're going to a check on CNN Money Stream next.

(COMMERCIAL BREAK) [05:53:00] BERMAN: Russian president Vladimir Putin coming to the defense of President-elect Donald Trump. The Russian leader says the salacious but unsubstantiated claims in that 35-page dossier on Donald Trump are obvious fabrications. The Russian president calls the accusations part of a campaign to undermine the results of the U.S. presidential election.

Joining us now from Moscow, Jill Dougherty, former CNN Moscow bureau chief, now a global fellow at the Woodrow Wilson Center. And again, it was almost shocking to hear Vladimir Putin use the colorful words that he did choose in defending Donald Trump.

JILL DOUGHERTY, GLOBAL FELLOW, WOODROW WILSON CENTER, FORMER CNN MOSCOW BUREAU CHIEF: It was really an amazing moment there at the Kremlin news conference. Everything's going along actually pretty boringly and then at the very last moment, last question about all of this material. And President Putin just laid into the outgoing Obama administration, saying that there was a political battle underway in the United States to undermine the legitimacy of the Trump administration and to, as he put it, tie his hands and his feet from doing what he wants to do.

Then he got into that unsubstantiated salacious material and he ended up in the Kremlin at a news conference talking about prostitutes. Here's what he said.

(BEGIN VIDEO CLIP)

VLADIMIR PUTIN, RUSSIAN PRESIDENT: Did Trump really come and meet with Moscow prostitutes? First, he is an adult and second, he is a person who for many years has organized a beauty pageant -- socialized with the most beautiful women in the world. It is hard to believe that he ran to a hotel to meet with our girls of a low social class, although they are the best in the world.

(END VIDEO CLIP)

DOUGHERTY: And then, once again, the president laid in. He said people who fabricate and use fake information are worse than prostitutes. The Russian president also said that yes, President Trump, when he wasn't a president, he was just a, as he put it, rich American, came to Moscow. And then the said do you think that our security services run around about every single billionaire who comes to Moscow? And then again, he said that's nonsense -- John.

[05:55:15] BERMAN: This may go down in diplomatic history as the Moscow communica of 2017. All right, Jill Dougherty, thanks so much.

The man suspected of killing an Orlando police officer and his own pregnant ex-girlfriend is now in custody after more than a month on the run. Police arrested Markeith Loyd Tuesday after tracking him to an abandoned house. They say he was wearing body armor, he had two handguns, and he tried to escape. The Orlando police chief says that after a struggle they put Loyd in the handcuffs that belonged to the slain police officer, Debra Clayton.

(BEGIN VIDEO CLIP)

CHIEF JOHN MINA, ORLANDO POLICE DEPARTMENT: To put her handcuffs on the bad guy that she was trying to catch when she was killed is just significant and it's meaningful to her family, which I did tell Seth Clayton about it. It's meaningful to her OPD family as well.

(END VIDEO CLIP)

BERMAN: Now, Markeith Loyd faces two murder counts -- two murder counts. We will check in on this investigation as soon as we can.

ROMANS: All right, 56 minutes past the hour. Now for a check on your money today -- CNN Money Stream. Donald Trump sending shockwaves through the global currency markets. In an interview with "The Wall Street Journal" Trump says the U.S. dollar's value is too high, in part because China is artificially holding down its currency. Trump says, "Our companies can't compete with them" -- China -- "now because our currency is too strong, and it's killing us."

Those comments caused this, the dollar dropping to its lowest level in a month after a huge run-up due to the policies Trump promised to put in place. In fact, the dollar was strengthening on optimism about Donald Trump and potential pro-growth policies.

There is a historical norm here that Donald Trump has just shattered. Recent U.S. presidents don't talk about the value of the dollar. Usually, the Treasury Department is the only government office that discusses it publicly and then it always says a strong U.S. dollar makes sense for the U.S. -- is in the U.S.' best interest. A strong -- a strong U.S. dollar makes -- is just incredibly important not to talk about the value of the dollar. It really roils markets. Donald Trump -- Donald Trump doesn't play by those rules.

That drop isn't weighing on stocks today, though. Dow futures pointing higher, the average riding a three-day losing streak. Stock markets in Europe are mixed. Shares in Asia finishing mostly higher overnight, and oil is dropping.

And finally, Fifth Avenue doesn't look like this anymore. (Videoclip from "Breakfast at Tiffany's").That, of course, is the opening to the 1961 film "Breakfast at Tiffany's."

BERMAN: Although it does sound like that now. They play "Moon River" -- you know, blast it out of the speakersevery day.

ROMANS: No. Today, the storefront is mobbed by people trying to get a glimpse of Trump Tower which is nearby. And guess what, that has hurt Tiffany sales. Revenue dropping during the busy holiday shopping season. It didn't mention the president-elect himself, instead blaming the impact of recent election-related activity.

Its flagship store on Fifth Avenue accounts for 10 percent of all of Tiffany's global revenue. The stock losing 2.5 percent on the news. Other jewelry retailers -- like luxury ones, like Cartier, had upbeat results, so it seems the Trump effect weighing on Tiffany's. And now you will be humming "Moon River" for the rest of the day. BERMAN: I'll be thinking about George Peppard for the rest of the day.

ROMANS: Yes, a very solid performance by George Peppard.

BERMAN: Even better than --

ROMANS: Thanks for joining us. I'm Christine Romans.

BERMAN: I'm John Berman. "NEW DAY" starts now.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Chelsea Manning is serving a sentence and should continue to serve that sentence.

UNIDENTIFIED MALE: When you combine the excessive sentence with the humanitarian considerations, Obama thought it was just to commute her sentence.

TRUMP: Many of the celebrities who were are all saying I'm not going to (INAUDIBLE), they were never invited.

UNIDENTIFIED MALE: It's a shame that these folks don't want to be part of the peaceful transfer of power.

TRUMP: Well, what happens to their tickets? I hope they're going to give us their tickets.

ROMANS: Vladimir Putin says accusations of spying are only to undermine the incoming president-elect.

TRUMP: I'm very proud of the cabinet members that we have put together.

UNIDENTIFIED MALE: I think there's a very good chance that he will not be confirmed.

SEN. CHRIS MURPHY (D), CONNECTICUT: You can't say definitively today that guns shouldn't be in schools?

(END VIDEO CLIP)

ANNOUNCER: This is NEW DAY with Chris Cuomo and Alisyn Camerota.

ALISYN CAMEROTA, CNN ANCHOR: We want to welcome our viewers in the United States and around the world. You're watching NEW DAY. It is Wednesday, January 18th, 6:00 in New York.

We do begin with breaking news about America's oldest living former president. According to reports by the "Houston Chronicle" and the TV station KHOU, at this hour George H.W. Bush is in the hospital.

CHRIS CUOMO, CNN ANCHOR: The 92-year-old is being treated at a Houston hospital after falling ill. There are no specific details about what that illness might be. The nation's 41st president has had several health issues in the last year. Let's get to CNN's Athena Jones, live at the White House with the breaking details. Right on the eve of the inauguration, what do we know?

JONES: Exactly. Good morning, Chris. Well, we know from local reports that he -- that his chief of staff tells the "Houston Chronicle" that George H.W. Bush is fine. He's doing really well. That same paper reports that doctors have a couple of theories about what may be causing his ailment.