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Maria Bearing Down on Turks & Caicos; Crews Race to Find Mexico Earthquake Survivors; Kim Jong Un Lashes Out of Trump; GOP Lacking Support for Graham-Cassidy. Aired 4:30-5a ET

Aired September 22, 2017 - 04:30   ET



[04:31:34] DAVE BRIGGS, CNN ANCHOR: Hurricane Maria still a dangerous category 3, bearing down on the Turks and Caicos Islands after leaving a path of devastation in Puerto Rico.

CHRISTINE ROMANS, CNN ANCHOR: Tragedy in Mexico. The death toll climbed, rescue crews are racing against time to find earthquake survivors.

BRIGGS: Revenge of the rocket man. North Korea's vowing retaliation against the U.S. after President Trump's defiant speech at the U.N. North Korea's foreign minister threatening a hydrogen bomb test over the Pacific Ocean. This game has changed dramatically in the last 24 hours.

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

ROMANS: Sure has. I'm Christine Romans. Thirty minutes past the hour. We'll get to that, and the Chinese central bank whether it really will crack down on the financial flows into North Korea to really try to punish that regime.

But let's begin with Hurricane Maria this morning, still a dangerous category three storm and heading straight for Turks and Caicos. Deadly and potentially catastrophic storm surge expected as much as 12 feet above normal. That could submerge the already battered island nation.

The devastation left behind Maria in Puerto Rico is simply -- I mean, simply stunning. Homes and cars under water, block after block. The flooding described as Harvey-like. With more than 40 inches of rain in some areas, and an additional four to eight inches of rain is on the way today, Dave.

BRIGGS: Rescues are ongoing in the country's hardest hit areas. Take a look at this coast guard Hercules airplane crew from Clearwater, Florida, and a British Royal Fleet rescue helicopter crew saving a woman and two children from a vessel near Puerto Rico. Wow.

Right now, over 4,000 members of the U.S. Army Reserve are on the ground in Puerto Rico. They report massive destruction, nonexistent communications.

Let's go live to San Juan and bring in CNN's Nick Valencia.

Nick, not helping, that rain continues to pummel the island. What are you seeing now?


I'm not sure if it translates from the camera, but it is just pouring rain down on us right now. We're covered by a balcony, so that's why we're not getting wet. But if you can see behind us, lightning strikes, thunder, this rain has just not stopped. There's another lightning strike here as I'm reporting.

Where is this rain going to go is the question that our news crew has? There's roads that are flooded out, neighborhoods that are flooded out. We tried to get outside of San Juan a couple of days ago. We were stopped after about three miles because the roads were inundated.

We saw gas stations under water. We saw metal billboards mangled. Roofs ripped off just from the sheer force of the winds. Those winds are not an issue, but the water still remains. So, two days, at least two days since the landfall of Hurricane Maria. It's an issue and a concern that government officials have had since the very beginning.

Governor Ricardo Rossello saying that this is the number one cause of death after hurricanes like this make landfall and we're learning that now, a local newspaper is reporting at least eight people have drowned in a nearby township just outside of San Juan. This still is a very serious situation here.

A lot of desperation with the local mayor here in San Juan telling residents they should be -- they should expect to be without power for perhaps up to six months -- Dave.

BRIGGS: Boy, devastating.

All right. Nick Valencia, live for us in San Juan. Thanks so much.

ROMANS: And it does not stop there. We have heartbreaking images out of Dominica.

[04:35:00] CNN gathering the first pictures on the ground after Hurricane Maria decimated the islands. You can see houses and buildings simply ripped to shreds. Entire towns, little villages just flattened. Officials say at least 15 people died there. Dominica's prime minister describing the scene as heart-wrenching. He says the country's agriculture has been completely washed away. Recovery may take up to two years.

BRIGGS: Hurricane Maria is still a potential threat to the U.S. though.

Let's get right to the CNN weather center where meteorologist Karen Maginnis is tracking the storm.

What's ahead here, Karen? KAREN MAGINNIS, AMS METEOROLOGIST: Yes. We'll show you the computer

model. I wanted to say to Nick Valencia and the crew that yes, along that western and north central edge of Puerto Rico, we are seeing kind of a band of heavy rainfall. But I do think as we go to the afternoon, it is really going to start to taper off, maybe not entirely but we're not going to see that 20 to 40 inches of rainfall we saw in some areas.

All right. You've already seen the path of some of these computer models and it is splitting the difference between Bermuda and the East Coast of the United States. This is early on, we go beyond about three to five days, and five days might be a little bit of a stretch. And we go beyond that period of time, the computer models just aren't going to be that reliable.

All right. Here's the latest information. National Hurricane Center supporting winds with Maria now 125 miles per hour. That makes it a strong category 3.

This is the wind field. Watch these white shaded areas. That's where we're going to see the highest concentration of the wind gusts. Right now, the position puts it just about 45 miles to the east of Grand Turk Island. And it continues to move towards the north, although in the last few references and updates from the National Hurricane Center, it has slowed down a little bit.

Each time we get an update, it is slower. Just by one mile an hour, but that's only bad news for areas that continue to get battered by this savage track of Hurricane Maria. National Hurricane Center will update at 5:00. So, we'll have new information then.

Back to you, guys.

BRIGGS: All right. Karen, thank you.

ROMANS: All right. Now to the disaster unfolding in Mexico.

Rescue teams pausing to sing the national anthem to honor the dead. The death toll rising to 286, three days after a 7.1 magnitude earthquake devastated Mexico. Volunteers and first responders still racing to save survivors who may be trapped under rubble at this hour.

CNN's Rosa Flores live for us in Mexico City with the very latest.

And I know those crews have been working round the clock, hand by hand, digging handfuls of dirt, moving pebble by pebble to try to save people.

ROSA FLORES, CNN CORRESPONDENT: It's a very delicate process, Christine. You're exactly right.

And these rescue workers take the work so seriously. Not only are they doing this to save other lives, but they have very much a lot of pride in the work that they're doing.

Take a look at the building behind me. This is one of dozens of buildings that collapsed after the earthquake on Tuesday. Now, according to the president of this country, about 10 buildings still have people trapped inside. This is one of them.

I talked to family members who have been here for days waiting for news. And they say that they have received some good news and some bad news from rescuers. The bad news, they say, is that they believe that the structure of this building is very delicate, which makes the work very dangerous, which makes it extremely difficult for them to work in those conditions.

The good news is they believe -- this is according to family members -- they've been told by rescuers that they have used heat sensors and that they believe that there are capsules in the back of this building with people who are alive because these heat sensors gave them positive readings. So, Christine, that's renewed hope for these families that have been here since Tuesday, more than 60 hours, some of them refusing to eat. Others saying I have to eat. I have to sleep. To make sure I can stay here to support the rescue workers and let them know that the people that they're fighting for, the lives they're fighting for inside that building, that they're loved and cared for by the people who are waiting out here for good news -- Christine.

ROMANS: I can't imagine that kind of anguish it did to the families who are watching this happened.

All right. Rosa Flores, thank you for your fine reporting there from the scene. Thank you.

All right. Forty minutes past the hour.

It's what Wall Street has been waiting for. The GOP plans to release a framework of its tax plan next week. The president wants big tax cuts, but congressional Republicans still have not agreed on many aspects of the plan. For example, how deep those cuts will be, and how they'll be paid for, if they'll be paid for.

Here's what we know. President Trump wants to slash the corporate rate to 15 percent.

[04:40:01] That will cost about $2 trillion. The GOP plan may propose we think around 20 percent instead.

For individuals, President Trump wants to cut rates across the board, but he recently said that may not include tax cuts for the richest Americans, contradicting what the administration has said so far.

And what about tax deductions? Will they be eliminated? Treasury Secretary Steven Mnuchin has said only three are safe. Charitable contributions, mortgage interests and retirement savings.

Of course, eliminating tax breaks is easier said than done. One reason the tax code hasn't had real reform since 1986 is because there's a constituency for single word in that huge tax code.

And more importantly, how will big tax cuts be paid for? The administration insists economic growth will pay for all the tax cuts, an argument many economists aren't buying. One thing a lot of people are looking at, especially in some of these high tax, state tax states like New Jersey and New York and in California, would they get rid of the ability to write off your state taxes from your federal return? That's something that would hit big blue states in particular.

BRIGGS: Hit the housing market perhaps?

ROMANS: It might put a cool, a damper on housing market because you could still write off the mortgage interest, but, you know, it makes it less attractive to live in some of those high cost housing markets.

BRIGGS: Right. And they're going to try to rule this out as they try to force through health care in the final few days.

ROMANS: That's right.

BRIGGS: So, that could complicate matters.

Ahead, Kim Jong-un vowing the U.S. will pay dearly after threats by President Trump.


DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Rocket man is on a suicide mission for himself and for his regime.


BRIGGS: And a North Korean official threatening a nuclear test over the Pacific.



[04:45:48] TRUMP: The United States has great strength and patience, but if it is forced to defend itself or its allies, we will have no choice but to totally destroy North Korea.


BRIGGS: The silence from Pyongyang shattered by Kim Jong-un. The North Korean leader lashing out in response to the President Trump's address at the U.N. General Assembly.

He's vowing to retaliate with the hardest level of hard line countermeasure in history and that's not all.

ROMANS: Kim also warning President Trump will pay dearly for his speech, calling for totally destroying the DPRK. The North Korean leader says whatever Trump might have expected, he will face results beyond his expectation.

When North Korea's foreign minister was asked what the highest level retaliation would be, he replied this could probably mean the strongest bomb test in the Pacific Ocean.

Let's go live to Seoul and bring in CNN's Paula Hancocks.

Paula, raising the stakes of new sanctions against North Korea. Let's talk a little bit about that because what's key here is will the Chinese central bank really do what the president says it's going to do and starve North Korea of the funding it needs to keep this program going?

PAULA HANCOCKS, CNN INTERNATIONAL CORRESPONDENT: That's right, Christine. I mean, we've heard it from some reports. We heard it from the U.S. president as well that the Chinese central bank has demanded its bank do abide by these international U.N. sanctions that have passed.

But we don't have it from the directly from the central bank at this point. We're waiting to see whether or not it is actually brought into being, whether or not it is fully implemented.

And that's the key really because if it's not fully implemented, if it's just lip service, then, obviously, those cash reserves and resources will not be stopped to North Korea.

But what the U.S. president is trying to do is he say he is obviously targeting the companies, the individuals, the financial institutions that are allowing North Korea to continue with its nuclear and missile program. So, hoping with this executive order, with these increased sanctions, that they can starve the regime of cash, more than they have already. We also heard U.S. Secretary of State Rex Tillerson saying that he believe that the cap on crude oil going into the country is already having an impact.

Now, one other thing we're focusing it on is this reaction from the North Korean leader, Kim Jong-un, to the U.S. President Donald Trump. Kim Jong-un saying he thought the U.S. president was mentally deranged, criticizing his behavior, talking about speech on Tuesday. But that the interesting fact is in the first person. This is the kind of direct response from the North Korean leader that we simply don't see -- Christine.

ROMANS: Yes. You know, give me a little perspective. When you look at the words, the word itself, it sounds just colorful and kind of off the wall.

I will surely definitely tame the mentally deranged U.S. dotard with fire.

We should remind our viewers this sort of bellicose and, you know, wild language is not really that unusual from the North Korean regime, but you say that -- you know, specifically saying President Trump is.

HANCOCKS: The -- it's the fact that the Kim Jong-un, we have a photo from state-run media. He's looking into the camera, he's holding the statement and he is directly talking to the U.S. president, Donald Trump. So, that is new.

ROMANS: That is it new. All right. Interesting.

Thank you so much, Paula Hancocks for us.

BRIGGS: Yes. That word dotard trending on Twitter.

ROMANS: I had to Google it.

BRIGGS: I had to Google it, too. But now, people are learning what that means.

ROMANS: Senile, an old person essentially.


All right. Just nine days left for Republicans to pass the plan to repeal and replace Obamacare. They are facing more pushback this morning, this time the National Association of Medicaid Directors which represents all 50 states. It's warning Republicans their bill will, quote, constitute the largest intergovernmental transfer of financial risk from the federal government to the states in our country's history.

ROMANS: But isn't that what they want? They want federalism not socialism if you listen to Lindsey Graham?

BRIGGS: Yes. That's the chief argument.

ROMANS: That's the point. The Medicaid directors are saying, wait a minute. That's what it would do.

Republican leaders still don't have the votes to pass the Graham- Cassidy bill.

[04:50:00] But Senator Lindsey Graham is feeling confident.


SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: If you want money and power out of Washington and you want to end the march to single-payer health care, this is your last best chance. This is the biggest change in health care in my lifetime. This is federalism versus socialism. I think we're going to get 50 Republicans to vote for federalism, and I make a prediction, a couple of Democrats are going to come on board because their state does well. I like New York, California and Massachusetts and Maryland, but I don't want to give them all the money.


ROMANS: Not everyone is so optimistic.

CNN's Phil Mattingly has more from Capitol Hill.


PHIL MATTINGLY, CNN CONGRESSIONAL CORRESPONDENT: Dave and Christine, with the Senate on session, when it comes to the future of repeal and replace, it's very still much up in the air right now. Obviously, Republican leaders, they want to have their vote next week. They have to have that vote next week, if they want be able to actually move forward on this.

The big question is, will they ever actually get the votes? You break down who is actually in play right now? And everybody comes back to the same two people. Lisa Murkowski of Alaska, John McCain of Arizona.

John McCain is about process. Well, guess what? There will be a Senate Finance hearing on Monday about this bill. They -- Senate Republican leaders at least hopes that checks the box on process.

Well, we asked Senator McCain about that a couple of times this week, he says that's not regular order. I want more than that. So, we'll see what happens going forward. Of note, Lindsey Graham, co-author of this bill, good friend of his, working on him and expected to all weekend.

The other person that everybody is paying attention obviously, Lisa Murkowski. And now, it's worth nothing, I spoke to Lisa Murkowski a few months ago, early on in this process, and she said, look, I'm not going to be bought off. I don't want something that just makes Alaska look great and hurts other states.

If she sticks to that policy going forward, it's going to be tough to see her get to yes. But, she's back in Alaska. I'm told the Trump administration officials are reaching out to her repeatedly, making sure that she knows they're available at all times.

I can also tell you here on Capitol Hill, we're seeing a series of draft proposals going back and forth about ways to make Alaska end up better in this bill.

The big question now is, will it actually work? Because if it doesn't, they most certainly won't have the votes. If it does, next week, show time all over again -- Dave and Christine.


ROMANS: All right. Phil Mattingly, we'll be there. Thank you.

BRIGGS: Phil is all over it.

ROMANS: Not "Dancing with the Stars," folks. It's a little more consequential.

All right. Answers from Equifax about its huge data breach? So does Congress and the now, the Equifax CEO is heading to Capitol Hill. Why did it take them so long? What in the world is going on behind there? Details on CNN "Money Stream", next.


[04:58:16] ROMANS: All right. Let's go a check on CNN "Money Stream" this morning.

Global stock markets are lower after North Korea threatened to test a nuclear weapon, extending the losses that we saw yesterday on Wall Street. The Dow ended a nine-day winning streak. In fact, all three major averages closed lower.

Analysts call it a late reaction to the Federal Reserve planning to raise interest rates again this year. Lower rates have fuelled the market's rally since the financial crisis. Also these concerns about North Korea and the situation there.

Tech stocks were the biggest losers. Apple alone dropping almost 2 percent. Apple has lost 4.6 percent since debuting it latest slate of products last week.

But investors are already looking ahead to tax reform. The GOP should release a framework of its plan next week. And we should remind you, the stock markets are really very close to record highs. Seeing a couple of down days, not really a surprise.

Do you want answers from Equifax about its huge data breach? Well, so does Congress.

Equifax CEO Richard Smith will testify on Capitol Hill on October 4th. It will not be an easy appearance for him. Equifax faces a huge backlash for how it handled the leak, exposing the data of 143 million. You can expect the Congress members to grill him on the time line of the hack, stock sales by three executives after the hack, but before it became available to the public, and initially asking customers to waive near right to sue in exchange for free credit monitoring.

Toys R Us may be bankrupt or filing for bankruptcy, but it's still hiring for the holidays. The toy store is looking to hire at least 13,000 workers. It's a sign Toys R Us will try to use the busy holiday season to help with its bankruptcy. Toys R Us filed for bankruptcy Monday after struggling with nearly $5 billion in debt.

Two of Apple's three new iPhones hit stores today. The new iPhone 8 and 8-Plus, they go on sale this morning. They feature wireless charging and new cameras, as well as a brand new mobile operating system, the iOS 11. Customers will have to wait until for the iPhone X, Apple's $1,000 anniversary phone.