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EARLY START

Georgia Special Election Goes To Runoff; Tillerson: Sanctions May Have To Be Reimposed On Iran; U.S. Show Of Force...That Wasn't; Turkey's President Speaks After Referendum. Aired 5:30-6a ET

Aired April 19, 2017 - 05:30   ET

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


(COMMERCIAL BREAK)

[05:31:15] ALISON KOSIK, CNN ANCHOR: Oh, so close. A Democrat comes within points of flipping a Republican House seat in Georgia. Can Democrats stay energized enough to win a runoff, and what is President Trump saying that's leaving many scratching their heads?

Welcome back to EARLY START, I'm Alison Kosik. Good morning.

DAVE BRIGGS, CNN ANCHOR: I'm Dave Briggs. Good morning to you. Many interpretations of this special election. Breaking overnight from Georgia's sixth congressional district, the only thing settled there this morning, really, that nothing is settled there. A special election to fill a seat held for decades by Republicans now headed to a June 20th runoff between 30-year-old Democratic first-timer Jon Ossoff and Republican Karen Handel.

KOSIK: This House seat has been widely Republican since the Carter administration. It's been held over the years by Newt Gingrich and Tom Price, whose departures to be -- whose departure to become Health and Human Services secretary set off this special election in the first place. Well now, in a race viewed as a bellwether for how energized Democrats are in Trump country, their standard-bearer is already declaring last night's win a victory for the ages. More now from CNN's Manu Raju at Ossoff headquarters in Atlanta.

(BEGIN VIDEOTAPE)

MANU RAJU, CNN SENIOR CONGRESSIONAL REPORTER: Good morning, Alison and Dave. Now, Jon Ossoff, the Democratic candidate here in the sixth district of Georgia, falling just short of the 50, plus one percent that he needed to win this seat outright, meaning that there's going to be now a runoff in two months against the Republican candidate Karen Handel, former Georgia Secretary of State who is going to try to consolidate support in this conservative district.

Now, this district has not gone to a Democratic candidate since -- for actually the last 37 years, so the fact that Mr. Ossoff came close gave Democrats a reason to cheer last night even though he fell short. This is what he said when he addressed supporters.

JON OSSOFF (D), GEORGIA CONGRESSIONAL CANDIDATE: We have defied the odds. We have shattered expectations. We will be ready to fight on and win in June if it is necessary and there is no amount of dark money, Super PAC, negative advertising that can overcome the real grassroots energy like this.

RAJU: Now the question for Ossoff is whether or not he can actually galvanize enough support on the left to get 51 percent and beat Handel. She's going to be able to get support from a lot of those supporters who backed her Republican opponents. And also the question, though, is the impact that Donald Trump will have as they try to woo swing voters -- people who are being, maybe, disaffected by his presidency -- guys.

(END VIDEOTAPE)

BRIGGS: Thank you, Manu. For his part, President Trump sees the Georgia result as a victory for the GOP and he's even taking credit for it. Take a look at this post tweet -- post-election tweet, rather. He says, "Despite major outside money, FAKE media support and eleven Republican candidates, BIG "R" win with runoff in Georgia. Glad to be of help!"

Well, Jon Ossoff did raise $8.3 million for his campaign, much of it from out-of-state donors -- an estimated 97 percent of it -- but President Trump spent a lot of political capital on the race over the last few days, even recording a robocall against Ossoff.

KOSIK: All right, let's bring in the managing editor of "CNN POLITICS DIGITAL" Zachary Wolf. Good morning to you, Zach.

ZACHARY WOLF, MANAGING EDITOR, CNN POLITICAL DIGITAL: Good morning.

KOSIK: So, looking at the lay of the land here in Georgia no decisive winner in this highly-anticipated special election, so why is it that both sides are saying hey, we won?

[05:35:00] WOLF: Well, Republicans are saying it's a good thing for them that there's not going to be a new Democrat headed to Congress and Democrats are saying it's a good thing for them that there's, you know, somebody who got nearly 50 percent -- a Democrat -- in this reliably Republican district. I think Republicans should look at the results here.

I mean, they should be happy, I think, that Ossoff didn't get to 50 percent, but there's a lot -- there's some warning bells, too. This is a reliably Republican place and if this had happened in any other district maybe a little bit less reliably Republican, there might be a Democrat headed to -- headed to Congress right now. So I think that there are clearly some frustrations with the White House and with Republicans that they need to take note of going forward.

BRIGGS: But those frustrations were just about exactly the same in the presidential election. The numbers looked similar. In fact, Ossoff slightly outperformed Hillary Clinton in that district. As we move forward to 2018, you have 23 Republicans up for reelection in districts where Hillary Clinton won. Is there a national lesson to be learned for those Republicans?

WOLF: Well, I think that the national lesson that we need to learn is that Donald Trump is going to play a role in every single race. He is going to be sort of the elephant in every single one of these districts, you know. For Democrats, they are going to run against him entirely and he is going to be extremely divisive, you know, for the next year. That's not really news but I think that's what we learn here.

KOSIK: OK, just a reactionary tweet that caught my eye. Dan Pfeiffer -- he's a former Obama adviser and he's now a CNN contributor. He tweeted this about the Georgia election, saying, "I can see why Trump is confused here in this election. The person with the most votes was not the winner."

BRIGGS: Very funny. That's a witty tweet.

WOLF: Yes, it's a -- well, you know, Trump didn't get the most votes but he won. This is slightly different because Ossoff didn't get the 50 percent that he needed to avoid the runoff, you know. These primaries -- the jungle primaries are kind of confusing but sort of interesting exercises.

KOSIK: One thing that does come to mind, though. Jon Ossoff did raise $8.3 million. That's not chump change. A lot -- and he didn't -- he didn't win outright. He didn't get that 50 percent. What do you say about that?

WOLF: Well, you know, where did a lot of that money come from? He had become the cause celeb for a lot of progressive groups. I'm not sure all of the money or even most of it -- all of that $8.3 million was coming from inside his district. When you start, you know, projecting races like this nationwide it's hard to focus that kind of energy from outside on individual districts. So it will be hard to raise that kind of money nationwide and it will be hard to sustain that level of fundraising for the next two months in a suburban Atlanta district where I think things are going to be a little more expensive than other parts of the country.

BRIGGS: And Zach, meanwhile, the president in Kenosha, Wisconsin giving a speech about American-made, American hiring, moving forward. But he said something interesting to affiliate WTMJ about his legislative agenda -- listen.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I think it's going to come probably as part of one of the other bills. People want it, I want it, but I want to use it to get -- whether it's health care or tax reform or something, I want to use it for that.

(END VIDEO CLIP)

BRIGGS: So the "it" he's implying to is tying infrastructure to another major piece of legislation and we're led to believe the only two he's talked about are tax reform and health care. What are the mechanics of that and the likelihood of getting anything through that size?

WOLF: Honestly, I don't know and here's why. They were unable to pass a health reform bill -- something that every Republican agreed they should do. Infrastructure -- there is not wide agreement on how they're going to pay for this. Republicans are split on that issue. He wants to spend, you know, something north of $1 billion. Where are they going to find that money? And on tax reform it's only going to get more complicated. I don't see that -- that seems like the most complicated possible way to do this. So, you're right. I mean, there are a lot of questions raised by that -- by that comment there.

BRIGGS: Yes.

WOLF: But of his big three priorities -- infrastructure, tax reform, and health reform -- we don't really see definitive movement on any of them right now.

KOSIK: And we're seeing a lot of executive orders being signed, very little being pushed through Congress. All right, CNN's Zach Wolf, thanks so much for your analysis this morning.

WOLF: Thank you.

BRIGGS: All right. Secretary of State Rex Tillerson suggesting the U.S. may have to reimpose sanctions on Iran even though it is complying with the terms of the nuclear deal. In a quarterly letter to Congress, required by the nuclear agreement, Tillerson says that Iran has continued to act as a state sponsor of terrorism and that returning the sanctions may be in America's national security interest. Note that the nuclear deal does not cover terrorism and that reinstating sanctions would break the U.S. side of the bargain, not to mention infuriate America's partners and, potentially, invite Iran to restart its nuclear program.

[05:40:08] President Trump pushing his "Buy American" agenda and taking a tour of the Snap-on tools factory in Wisconsin. But the alarming reality here is Americans just not spending much money on anything right now, regardless of where it's made.

Retail sales have slumped the past two months, falling from a decent rise that we saw in January, and if it weren't for climbing gas prices the losses would have been much steeper. Shoppers haven't been this stingy since early 2015 and it's likely to hurt the economy. The Atlanta Federal Reserve forecasts GDP growth to come in at one-half a percent the first quarter. That is well below the 2.1 percent it hit at the end of last year and way below Trump's promise of four percent growth.

Now, while in Wisconsin, Trump signed an executive order that he says will protect American workers. It calls for a review and stricter enforcement of laws requiring the government to buy American-made products, especially iron and steel. Some industry experts say this will drive up costs, though. Others say increased demand could curb that rise. You know, one reason you may see retail sales taking a hit, by the way, is a lot of that has to do with confidence. On the other hand, if you see the GDP growth that we've seen over the past three years has been pretty weak in the first three months of this year.

BRIGGS: Yes, it looks pretty weak -- .5 percent estimated in the first three months.

KOSIK: That's been -- that has been the trend, though, over the past several years so it's hard to pinpoint.

BRIGGS: It's tough to get to four percent --

KOSIK: When your retail --

BRIGGS: -- from there, right?

KOSIK: Yes, exactly.

BRIGGS: All right. Well, a CNN worldwide exclusive as Turkey's president one-on-one facing criticism that a referendum that gives him sweeping powers. How does Recep Erdogan defend the move? Becky Anderson spoke with him and she joins us next.

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[05:46:00] KOSIK: A U.S. show of force against North Korea wasn't everything it was cracked up to be. The White House responded to North Korean missile tests by sending what President Trump called an "armada" to the Korean Peninsula but it turns out those ships were actually headed in the opposite direction. CNN's Alexandra Field is live in Tokyo where Vice President Pence addressed U.S. troops this morning. Alex, did he square what was said by the president and what was actually done with these ships?

ALEXANDRA FIELD, CNN CORRESPONDENT: No. Instead, Alison, he did reflect on what he sees as military successes under President Donald Trump, talking about the fact that North Korea should not test the resolve of the U.S. and saying the strikes in Syria and the decision to drop the MOAB, the Mother of All Bombs, in Afghanistan as evidence, as he put it, of the Trump -- of the military's ability to act decisively under President Trump's leadership.

We know that President Donald Trump came out last week saying that an armada was headed toward the waters off the Korean Peninsula -- warships that were, it seems, meant to send a warning message to Pyongyang. But instead, they created a lot of confusion because it now seems that those very warships were heading south when the president was suggesting that those warships were actually heading north.

The reports that the U.S. carrier strike group was on the way had enraged Pyongyang, potentially inciting more provocative measures. It was just this weekend, as Vice President Pence made his way to Seoul, South Korea, that there was a failed missile launch from Pyongyang. Now a senior North Korean official is saying that there will be weekly missile launches.

As for the confusion over the whereabouts of the USS Carl Vinson, well, an administration official in Washington is saying that it had to with a miscommunication with Pentagon officials and a lack of follow-up with commanders on the ground. The Pentagon is now saying in the face of mounting threats from North Korea that they will carry out two long-planned missile interception tests in the region scheduled for next month. That, as analysts in the U.S. believe that these missile launches will continue and that North Korea could be ready to carry off its sixth nuclear test -- Alison.

KOSIK: And that's despite Vice President Pence saying that he believes North Korea is getting the message. All right. CNN's Alexandra Field, thanks so much.

BRIGGS: Now, to a CNN worldwide exclusive. Turkey's president insisting Sunday's referendum that vastly expanded his powers was not a step toward dictatorship. CNN's Becky Anderson spoke with Recep Erdogan and she joins us live this morning. Good morning to you, Becky. What is his reaction, President Erdogan, to both accusations of voter fraud and suggestions that Turkey is moving from a democracy to a dictatorship?

BECKY ANDERSON, CNN INTERNATIONAL CORRESPONDENT: He says a win is a win. Let's remember, albeit, a slim margin of victory, 51 to 49 percent. But he is insistent that one, this referendum was a democratic exercise and that the result is the will of the people here in Turkey. And that two, the tectonic shift in the way that this country will be run going forward -- and it is a massive shift -- he says has sufficient checks and balances to ensure that it's about more than one man's rule. But is this a march towards dictatorship? I asked him that.

(BEGIN VIDEO CLIP)

RECEP ERDOGAN, PRESIDENT OF TURKEY (through translator): The dictatorship to exist you don't necessarily have to have a presidential system. Here, we have an election -- a ballot box. If you say the ballot box produces a dictator that would be unjust, unfair to the ballot box process and to those who cast their ballots in that box.

(END VIDEO CLIP)

ANDERSON: That was his response. This was a big defeat for the opposition parties here, Dave, in Turkey. They ran one of their best campaigns ever. Despite winning in the big urban centers like here in Ankara, they still came up short. Now they insist, the opposition, not only were there irregularities during the actual voting process, stuffing ballots by the tune -- to the tune of some 2.5 million is actually the charge. Even before the first ballot was cast the deck was stacked against them, they say. Given that the crackdown on dissent here since the military coup back in July last year and the ongoing state of emergency, they say they were effectively muzzled so there was no level playing field.

[05:50:27] BRIGGS: Right.

ANDERSON: Dave --

BRIGGS: Becky Anderson live for with that great interview. Also, some news this morning that the Turkish foreign minister, Alison, says President Erdogan will meet President Trump in May. That's ahead of a meeting of the U.N. Alliance.

KOSIK: He was hinting during that phone call he wanted that meeting, and I guess he's getting it.

BRIGGS: The NATO Alliance, yes. And, you know, a lot of criticism on President Trump for calling Erdogan. It's clear that we need them as an ally in this war on terror.

But let's get a look now at what's coming up on "NEW DAY". Alison Camerota joining us. Alisyn, good morning to you.

KOSIK: Good morning.

BRIGGS: I know Tom Perez joining the show. The RNC claiming victory last night in Georgia.

KOSIK: She's busy getting dressed. Leave her alone.

BRIGGS: Oh, I know you're getting makeup and getting all beautiful, but you don't need the makeup.

KOSIK: Ah, that's really sweet.

BRIGGS: Do you expect Tom Perez to claim victory this morning, as well?

ALISYN CAMEROTA, CNN ANCHOR, "NEW DAY": Um, hmm, good question. I think that it's a little premature for that and in the interest of transparency we were peeling back the curtain and showing you what goes on transparently here before I come to you. But we are going to be talking to -- in addition to Tom Perez we're going to have the mayor of New York City, Bill de Blasio, on because yesterday he released his taxes publicly and sort of chided President Trump to do the same, though, as you know, the president has said he will not be releasing any of his past taxes. So we'll be talking to Bill de Blasio about that.

And then, in terms of what's going on in Georgia and that congressional seat, we will be giving you the latest and what it all means in terms of is this a referendum on Donald Trump's popularity? We have Karen Handel on. She's the Republican who now goes to the runoff with Jon Ossoff. So we'll be talking about if this is some sort of, you know, weathervane for what's going on in the rest of the country. So all of that when Chris and I see you at the top of the hour.

BRIGGS: All right, get the makeup back on set.

KOSIK: She doesn't need it. She doesn't need it. Thanks, Alisyn.

BRIGGS: Get it back out there. You look great. You don't need it.

CAMEROTA: Thank you. You, too.

BRIGGS: We'll see you later. KOSIK: OK, see you in a bit. One of the most iconic banks on Wall Street just suffered its most disappoint earnings report ever. We're going to tell you why when we get a check on CNN Money Stream, next.

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[05:56:30] BRIGGS: Increasing doubts this morning that Bill O'Reilly will ever return to "FOX NEWS" after his vacation. "The Wall Street Journal" reporting the company is preparing to cut ties with O'Reilly. And we should note the "Journal" and "FOX NEWS" do share the same parent company. The "Journal" reporting lines up with CNN's early reporting that Fox and O'Reilly are talking exit, something the O'Reilly camp denies. His future expected to be the focal point of a 21st Century Fox board meeting tomorrow and a final decision on O'Reilly's fate could come by week's end.

KOSIK: All right, let's get a check on CNN Money Stream this morning. Investors looking for a rebound this morning following a drop on Tuesday. We're seeing futures point a little higher this morning. Stock markets in Europe, they are in the green. Shares in Asia closing lower overnight. Wall Street has another round of corporate earnings coming through this morning. All of that against the backdrop of geopolitical tensions in Asia and a lot of uncertainty over elections in France and the U.K.

Goldman Sachs badly missing estimates for quarterly earnings and investors not too happy. The stock plunging 4.7 percent, losing more than $10 a share. It's marking the biggest one-day drop following an earnings report since Goldman went public in 1994. That data coming from FactSet. So even if you don't own the stock straight up, your portfolio may have taken a hit because Goldman is the most heavily weighted stock in the Dow 30. It accounted for more than half of the Dow's 113-point drop on Tuesday.

All right, everybody wants to know why the slump. Well, Goldman is blaming a big drop in trading revenue. That spooked investors, especially because rivals like Bank of America and JPMorgan Chase, they beat estimates with their reports and they also beat with that trading revenue, so something's going on at Goldman.

BRIGGS: Perhaps they need Gary Cohn back. Those departures may have hurt them.

KOSIK: Perhaps.

BRIGGS: I doubt that's it.

KOSIK: All right, thanks for joining us. I'm Alison Kosik.

BRIGGS: And I'm Dave Briggs. "NEW DAY" with a well-made up Alisyn Camerota and Chris Cuomo starts right now.

(BEGIN VIDEO CLIP)

OSSOFF: This is already a victory for the ages. UNIDENTIFIED MALE: It really does shake the Republican Party into a fearful place about what Donald Trump means for their electoral process.

KAREN HANDEL (R), GEORGIA CONGRESSIONAL CANDIDATE: Keeping this seat in the hands of a Republican is far bigger than any one individual.

OSSOFF: We will be ready to fight on and win in June, so bring it on.

BRIGGS: The U.S. show of force against North Korea wasn't everything it was cracked up to be.

MIKE PENCE, VICE PRESIDENT OF THE UNITED STATES: The United States' presence in the Asia-Pacific is strong, and under President Trump's leadership it will be stronger still.

DANA BASH, CNN CHIEF POLITICAL CORRESPONDENT: The administration can't afford to make mistakes like that. Do you see a direct negotiation with North Korea and the U.S.?

(END VIDEO CLIP)

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 is Wednesday, April 19th, 6:00 here in New York.

And up first, a wake-up call for Republicans in deep red Georgia. The Democrat, Jon Ossoff, coming close to winning the House seat vacated by President Trump's Health secretary, Dr. Tom Price, falling just short of the 50 percent threshold. With about 99 percent of the vote in, he's at about 48 percent so that means there's going to be a runoff election in June against Republican Karen Handel, who finished a distant second. But remember, the district has been a GOP stronghold since 1979.

CAMEROTA: So this congressional race widely seen as an early referendum on President Trump. The president injecting himself into the race, claiming victory before it was even called. It is day 90 of the Trump presidency and we have it all covered for you, so let's begin with Joe Johns. He is live at the White House. Hi, Joe.