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EARLY START

The State of the Union is Strong; Tracking Paris Terror Attackers; Rebels Take Over Yemen's Presidential Palace; Will Japan Pay $200 Million Ransom?; Report: 11 of 12 Patriots Game Balls Under- Inflated

Aired January 21, 2015 - 05:00   ET

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


JOHN BERMAN, CNN ANCHOR: All right. EARLY START continues right now.

(MUSIC)

BREMAN: President Obama defiantly pushing his agenda in his State of the Union address. He proposes free community college, higher taxes for the wealthy and a promise to veto bills that dismantle his executive action.

We will break down the big moments, the surprising moments and the response it is all generating this morning.

Good morning, everyone. Great to see you. Welcome to EARLY START. I'm John Berman.

CHRISTINE ROMANS, CNN ANCHOR: I'm Christine Romans. It is Wednesday, January 21st. It is 5:00 a.m. in the East.

President Obama struck a confident tone last night, seemingly undaunted as he gave his first State of the Union speech to an entirely Republican-controlled Congress. The president putting forward the agenda of an economic populist aimed at insuring the middle class, the middle class starts to enjoy the fruits of this economic recovery.

Senior White House correspondent Jim Acosta has the details.

(BEGIN VIDEOTAPE)

JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT: John and Christine, this was not a speech from a president who sees himself as a lame duck. In the State of the Union Address, President Obama came out and declared the nation's economy is on the rise. But he also offered up his prescription for lifting up the middle class, raising taxes and fees on the wealthy and big banks in exchange for new tax breaks or middle income earners.

Now, as part of the middle class economics scheme, the president also talked about free community college, but he also covered other subjects. He asked lawmakers to give him a vote to authorize force on ISIS. He called on Congress to lift the embargo on Cuba, slammed the Keystone pipeline, vowed to veto Iran's legislation.

But he also called on the country for a better kind of politics at this turning point of the presidency away from 9/11 and the financial crisis, and towards the future. Here's what the president had to say.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Fifteen years into this new century, we have picked ourselves up, dusted ourselves off, and begun again the work of remaking America. We have laid a new foundation. A brighter future is ours to write. Let's begin this new chapter together. And let's start to work right now.

ACOSTA: The president will take his message to Idaho later today, and then Kansas on Thursday. Those are both red states. But a Democratic source tells me the president will be visiting more red states in the coming months. He wants to engage Americans who don't agree with him to sell his agenda. And also coming soon, the president's budget, which includes that tax plan one Republicans have already deemed dead on arrival -- John and Christine.

(END VIDEOTAPE)

BERMAN: All right. Our thanks to Jim for that.

Republicans, of course, took a much dimmer view of the economy in their rebuttal following the president's speech. Freshman Iowa Senator Joni Ernst spoke of stagnant wages and lost jobs and what she called the hurt caused by canceled health care plans. She seized on the mandate for change that Republicans believe they won in the November elections.

(BEGIN VIDEO CLIP)

SEN. JONI ERNST (R), IOWA: Americans have been hurting, but when we demanded solutions, too often, Washington responded with the same stale mindset that led to failed policies like Obamacare. It's a mindset that gave us political talking points, not serious solutions. That's why the new Republican majority you elected, started by reforming Congress, to make it function again. And now, we're working hard to pass the kind of serious, job creation ideas you deserve.

(END VIDEO CLIP)

BERMAN: So, what did the public think of the president's speech? A CNN instant poll found a generally favorable response: 51 percent of Americans who watched the speech had a very positive reaction. That is up from last year and significantly better than the reception George W. Bush received at the same point in his presidency.

How about political figures mulling White House bids in 2016? Hillary Clinton, she may run for president, I'm told. She praised the speech in a tweet, saying, quote, "It pointed the way to an economy that works for all." She added, "Now, we need to step up and deliver for the middle class." Look at those hashtags, #fairshot and #fairshare. You will hear those again, I'm sure.

On Facebook, Republican Jeb Bush praised the Republican rebuttal and advised the president to be mindful of the strong message American voters sent in November and work with the new Republican congressional majority.

ROMANS: The State of the Union was all about the state of the middle class. The president wants to make child care more affordable, proposing a $500 tax credit for couples who both work. He also wants to increase the child care credit to $3,000 per year, per kid. The president also pushed changes to education.

(BEGIN VIDEO CLIP)

OBAMA: By the end of this decade, two in three job openings will require some higher education, two in three. And yet, we still live in a country where too many bright, striving Americans are priced out of the education they need. It's not fair to them, and it's sure not smart for our future.

(END VIDEO CLIP)

ROMANS: He's proposing free, free community college for millions and wants to eliminate some of the tax benefits of 529 college savings plans as part of an attempt to streamline education tax breaks and target students who need the most help.

How is he going to pay for all this? By raising the capital gains tax to 28 percent from 20 percent, eliminating the so-called "trust fund loophole" that let's wealthy Americans pass on assets tax-free, and by new taxes on very big banks. That's the plan.

Can it pass? Republicans say no way. They say the proposed tax changes are not serious.

Social media was buzzing as Americans and lawmakers took to Twitter and Facebook to sound off on the president's speech. This was a part of the speech in particular that went viral on Facebook. Listen.

(BEGIN VIDEO CLIP)

OBAMA: I have no more campaigns to run. My only agenda --

(APPLAUSE)

I know because I won both of them.

(APPLAUSE)

(END VIDEO CLIP)

BERMAN: That, I have to say, is going to be remembered as the line of the speech. It was ad-libbed. It was not part of the text, but sometimes these ad-libs are, in fact, planned.

And look, I think Democrats, you can see, loved it. They loved his defiance, they loved his confidence. And Republicans will just say he doesn't get the message that voters sent. So, it will be interesting to see how that plays over the course of the day. Republicans did stand up to cheer the president, at least a few

points, notably when he invoked the U.S. fight against global terror.

(BEGIN VIDEO CLIP)

OBAMA: We stand united with people around the world who've been targeted by terrorists, from a school in Pakistan to the streets of Paris.

(APPLAUSE)

We will continue to hunt down terrorists and dismantle their networks and we reserve the right to act unilaterally as we have done relentlessly since I took office to take out terrorists who pose a direct threat to us and our allies.

(END VIDEO CLIP)

BERMAN: President Obama gave much the same message of support to French President Francois Hollande in a phone conversation earlier in the day. Later today, the French Prime Minister Manuel Valls is set to outline new antiterrorism measures at a news conference in Paris.

All this as investigators in Paris pore over new surveillance video. Look at this, obtained exclusively by CNN, this appears to show the Paris gunman, Amedy Coulibaly and his partner, Hayat Boumeddiene, what they seemed to be doing is casing a Jewish institution in Paris. Chilling images.

We want to turn now to our senior international correspondent Nic Robertson who is live in Paris with the latest on the investigation this morning.

Good morning, Nic.

NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, good morning, John. Just look at how the pair are casing the potential for a terrorist attack there. Boumeddiene is dressed almost in hot pants there. There is a clear effort by them to deceive anyone looking at them that they have any connections whatsoever to do with radical Islam. That, obviously, one of the issues that faces French security authorities all the time.

The prime minister here today saying in the press conference, saying that radicalization never continues or never stops to increase in the country, radicalization an ongoing problem. And he is announcing measures to tackle this. He has just announced $300 million to be spent over the next three years at the interior ministry just to combat counterterrorism.

Right now, he said there are 120,000 French police deployed across the country. We've learned from prosecutors this morning a little more about Coulibaly and the associates within the four people who are currently in detention. The prosecutor named them as Willie, Christophe (ph), Tony, Michael, not Muslim names. These people, the prosecutor implied, had been involved in buying the

vehicle used in the operation, they're involved in buying the weapons. Three of them had prior criminal convictions against them. They weren't involved, necessarily, directly in the plot, he said, but clearly a nexus becoming apparent here between the criminal underworld, gun supplying, and terrorists here in this country, a major concern now, John.

BERMAN: Nic Robertson on the investigation with new developments coming in by the hour. Appreciate it, Nic.

ROMANS: All right. Happening now in Belgium, the country's public prosecutor getting set to address a police operation Tuesday in Comine (ph), very close to the border with France. So far, officials have only said that 82 people were evacuated from 33 apartments and this operation went smoothly, went calmly. No comment yet on whether this was a terror-related operation, but that is the suspicion here.

Officials are searching for, meantime, Abdelhamid Abaaoud, the suspected ringleader of an ISIS-linked Belgium terror cell. Now, CNN has obtained a tape of Abaaoud defending ISIS tactics. Listen.

(BEGIN VIDEO CLIP)

ABDELHAMID ABAAOUD, SUSPECTED RINGLEADER: It's not fun seeing blood spilled, but it gives me pleasure from time to time to see blood of the disbelievers run because we grew up watching, we've grown up, seeing on TV, in the whole world the blood of Muslims being spilled.

(END VIDEO CLIP)

ROMANS: Abaaoud also calls on Muslims to find honor through jihad and martyrdom.

BERMAN: Let's shift now to Yemen, where Shiite Houthi rebels have successfully staged a coup and overtaken the presidential palace in Sana'a. The foreign minister -- the information minister, I should say, told our Nick Paton Walsh that the president there is no longer in control. There are concerns, major concerns, that a government collapse could send that country into full-scale civil war.

The situation there is already one of pure chaos, chaos that is being exploited by radical groups, such as al Qaeda in the Arabian Peninsula. They are winning recruits there and there are grave concerns about U.S. interests there. A U.S. embassy vehicle was shot near an embassy checkpoint Monday night. Two navy warships have now moved into the Red Sea. They're ready to evacuate Americans from the embassy, if need be.

ROMANS: Breaking overnight, a Palestinian man has been arrested after nine people were stabbed on a bus in Tel Aviv. Israeli police are calling this a terror attack. The attacker was eventually chased down, shot by police and arrested. This is just the latest in a string of attacks against Israelis in recent months, several of them deadly. The Islamic militant group Hamas, which controls neighboring Gaza, praising these stabbings as brave and heroic. Happening now, Japan working to free hostages, two hostages held by

ISIS. Will Japan pay terrorists $200 million ransom? We're live with the latest developments on this, this morning.

(COMMERCIAL BREAK)

BERMAN: President Obama urging Congress to end the U.S. trade embargo against Cuba. In last night's State of the Union Address, the president touted the executive actions he's had already taken to normalize relations with Cuba, urging Congress to finish the job. And he acknowledged the presence of government contractor Alan Gross. He was in the crowd last night. Of course, he was freed as part of the negotiations with Cuba.

(BEGIN VIDEO CLIP)

OBAMA: As his Holiness Pope Francis has said, diplomacy is the work of small steps. These small steps have added up to new hope for the future in Cuba. And after years in prison, we are overjoyed that Alan Gross is back where he belongs.

(APPLAUSE)

Welcome home, Alan. We're glad you're here.

(END VIDEO CLIP)

BERMAN: Historic talks on restoring full diplomatic relations between the U.S. and Cuba are set to begin in Havana today. On Cuba's list of demands, before restoring relations, it wants to be removed from the U.S. list of states sponsors of terrorism.

ROMANS: Right now, the Japanese government is using every diplomatic channel available to make contact with ISIS this morning and convince the extremist group not to execute two Japanese hostages. ISIS is demanding a $200 million ransom to spare these men's lives. It is not clear this morning whether Japan will pay it.

Will Ripley live on the ground in Tokyo, tracking the latest developments.

And, of course, the moral dilemma here for anyone paying a ransom is that it gives ISIS more money to go on more killing sprees and more kidnapping sprees.

WILL RIPLEY, CNN INTERNATIONAL CORRESPONDENT: Absolutely, Christine, and that is certainly weighing heavily on many people here in Japan who know that any additional resources in the hands of ISIS could put more lives in danger.

On the other hand, there are two Japanese citizens right now in desperate need of some kind of help. And so, we don't know exactly what steps the Japanese government is taking, aside from assurances from the prime minister when he got off the plane here in Tokyo a short time ago that all steps will be taken to rescue these two men. We have been talking today with friends of Kenji Goto, who describe

him as a seasoned journalist, a freelancer who was in and out of war zones for much of the past decade, and we're getting more information about the relationship between Goto and Haruna Yukawa, who was a relative newcomer to the scene in the Middle East. We're told that these two men met in Syria a year ago, about a year ago.

And Goto gave advice to a new friend of his, another fellow from Japan, about ways to survive in the Middle East, ways to make sure that you stay out of the kind of trouble that these two men are now in.

And so, when Goto found out that Yukawa had been captured by ISIS, friends say it weighed very heavily on him. He felt somehow that he was personally responsible, and perhaps went back into Syria to try to find this man, to try to talk to ISIS and see if he could do something to help.

I spoke with a close friend of Goto, who's known him for more than a decade, and he gave this emotional message to his friend.

(BEGIN VIDEO CLIP)

HIROMASA NAKAI, FRIEND OF HOSTAGE: I'm with you, and everybody with you, so don't give up. I know you are not giving up. I could tell from your face from that video.

(END VIDEO CLIP)

RIPLEY: Christine, we're told that Goto was very passionate about the children who were affected by the crisis in the Middle East. He reported extensively about them, but also wanted to tell all sides of the story, including the perspective of the ISIS fighters, who he felt may have been pushed into this conflict, you know, through forces that may not have been their own choice. And so, it just makes the whole situation that much more tragic, to know that now he is in a video with a man that perhaps he went to the Middle East to try to help.

ROMANS: Just really sad. And the government has a lot of work to do trying to figure out how to get those men back.

Thank you so much, Will Ripley.

BERMAN: Seventeen minutes after the hour right now.

FOX News could face legal action over its coverage suggesting that parts of Paris are off limits to non Muslims. The mayor of Paris, Anne Hidalgo, says the network insulted the city and insists that Muslim no-go zones do not exist. The mayor tells CNN she plans to sue for prejudice to the honor and image of Paris. FOX has repeatedly apologized.

ROMANS: Meantime, Louisiana Governor Bobby Jindal is doubling down on his contention that some Western countries have allowed Muslims to establish these autonomous neighborhoods in cities where Islamic tradition trumps regular law. Some see it as a part of a political strategy in an effort to make Jindal stand out from a crowded field of potential candidates for the 2016 Republican nomination.

BERMAN: A team of senior FBI agents will lead the federal civil rights investigation into the police chokehold death of Eric Garner in New York. Garner was unarmed when he died at the hands of police officers last summer. In December, a grand jury decided not to indict a white police officer, Daniel Pantaleo, in Garner's death. The incident, you'll remember, sparked a wave of antipolice demonstrations across the country. Authorities say the goal of this new investigation is to take a fresh look at the entire case.

ROMANS: Police are still trying to determine the motive for a fatal shooting at a Boston hospital. The victim, 44-year-old heart surgeon Michael Davidson, died late Tuesday night. Police believe he was targeted by the suspect, 55-year-old Stephen Pasceri, who entered Brigham and Young's Women's hospital early Tuesday, asked for Davidson and then shot him twice. The gunman then took his own life. Authorities say the suspect may have been related to one of the doctor's patients.

BERMAN: A lot of people in that hospital. What a tragedy.

They are trucking in bottled water in the town of Glendive, Montana, after an oil spill in the Yellowstone River contaminated the water supply. Officials say high levels of cancer-causing benzene were found in the water. The result of some 1,200 oils of crude oil leaking from a pipeline into the river over the weekend. The pipeline company is picking up the tab for the cleanup and the fresh water for residents.

ROMANS: Two former professional wrestlers are suing the WWE, claiming they have serious brain injuries from concussions they suffered inside the ring. Vito LoGrasso, whose name was Skull Von Krush, and Adam Singleton, who performed as Adam Mercer, are accusing the WWE of, quote, "selling violence and ignoring repeated head injuries." Both men claim they were forced to perform while hurt.

BERMAN: I spent some time behind the scenes at the WWE, and you would not believe the health concerns and health risks that the performers suffer and the concerns that they have. It's a serious, serious issue.

All right, speaking of serious issue and controversy, what on earth did the Patriots do? Did they take the air out of the footballs in the AFC championship game?

A new report says 11 out of the 12 balls had too little air. Did the Patriots tamper with them? Is this cheating? And what is the NFL going to do about it?

Andy Scholes, Good Lord! He'll have the details in "Bleacher Report," next.

ROMANS: Frequent flyers, beware: your miles may be getting ripped off. American Airlines say United States thieves used stolen passwords and usernames to break into some customer rewards accounts. Americans had thousands of accounts affected. The hackers booked free flights and arranged upgrades using stolen frequent flyer miles. Both airlines are working to restore points and beef up cyber security.

But there are ways to protect your valuable miles. Change your password frequently, treat your frequent flyer membership card like a credit card. Don't leave it lying around. Don't post photos of your boarding pass online or leave it behind on an airplane. Your ticket has important information on it that might help a thief clean out your account.

(COMMERCIAL BREAK)

BERMAN: All right, there is a controversy swirling around the Super Bowl. The Super Bowl is the biggest thing, basically, every year in America. Well, turns out that one of the teams in the Super Bowl might have cheated, and it is my team. And for that, I am ashamed.

Reports that the balls the Patriots used in the AFC championship game were underinflated.

Andy Scholes, give us the news.

ANDY SCHOLES, BLEACHER REPORT: Not good, right, John? Good morning, guys.

Well, according to ESPN, the NFL's found that 11 of the 12 balls used by the Patriots were underinflated in the game against the Colts by 2 pounds per square inch. Now, that's a significant amount, about 15 percent less than what a ball should be.

Under-inflating the balls in cold, wet conditions helps the quarterback grip the ball when he throws it, helps the receivers catch the ball. And the NFL says they're not ready to comment on their investigation and that it should be completed in the next two to three days. No matter what the findings are, the Patriots are still going to the Super Bowl, but they could face a hefty fine and a loss of draft picks.

Now, as you can imagine, even though they lost 45-7, the Colts are feeling a bit cheated right about now. Punter Pat McAfee tweeted, "If New England was to be DQ'd, we'd be their replacements, right? I should probably lay off the strawberry margaritas."

Meanwhile, the greatest receiver of all time, Jerry Rice weighed in, tweeted "11 of 12 balls underinflated? Can anyone spell cheating? #justsaying."

Now, the NFL may also want to speak with the Baltimore Ravens about deflategate. According to CBS Sports, some of the Ravens believe the kicking balls used in their playoff game at New England were also slightly underinflated.

ROMANS: What?

SCHOLES: Now, that game was close. The Patriots won 35-31.

And guys, if it wasn't for that second-quarter interception by D'Qwell Jackson in the Colts/Patriots game, we might not even have deflategate, because he's the one who went to the sideline and said -- you know, he's a linebacker. He caught the ball and even he knew, this doesn't feel right.

My question is, where are the officials? They're handling the balls every down, different balls for the Colts and Patriots, and they couldn't tell there was a difference in the ones the Patriots were using.

BERMAN: I appreciate you trying to shift some of the blame there, Andy, to make it easier for me to suggest that the refs were somehow complicit. If the Patriots took air out of the balls, it is shameful. It just is. It's shameful, it's wrong, it's against the rules.

ROMANS: Why even risk it? I mean, you're talking about the road to the Super Bowl. Why even risk it?

BERMAN: They could have beaten the colts using balls made of marshmallow fluff, OK? That only makes it worse. That only makes the cheating worse.

SCHOLES: And this on top of spygate. I mean, this is just bad.

BERMAN: Seems this is a trend here, Andy Scholes. It does seem as if there is a trend. Thank you for breaking my heart. Appreciate it.

ROMANS: I know. Poor John Berman's been sobbing in every commercial break, and I know it's not about the State of the Union, for sure.

Speaking of, President Obama pushing a new, aggressive agenda at the State of the Union address, but with Republicans controlling Congress, is there any hope that the president's plan will pass? Think about that for two minutes and then we'll break it all down.

(COMMERCIAL BREAK)