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Navy Yard All Clear; Fears of Terror Attack over Holiday Weekend; Unemployment Rate Drops to 5.3 Percent; Denouncing Donald Trump; Interview with George Pataki. Aired 1-1:30p ET

Aired July 2, 2015 - 13:00   ET

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


[13:00:00] WOLF BLITZER, CNN HOST: Hello. I'm Wolf Blitzer. It's 1:00 p.m. here in Washington, 6:00 p.m. in London, 7:00 p.m. in Vienna. Wherever you're watching from around the world, thanks very much for joining us.

We start with serious fears of a potential terror attack here in the United States linked to the upcoming July 4th holiday weekend. Those jitters may have contributed to the incident at the U.S. Navy Yard here in Washington this morning. City and federal law enforcement swarmed into action after someone reported hearing gunshots in the facility though no evidence of a shooter was found.

Let's go to our senior Washington correspondent Joe Johns. He's over at the Navy Yard right now. So what are the police, local authorities, saying about the situation there? What happened, Joe?

JOE JOHNS, CNN SENIOR WASHINGTON CORRESPONDENT: Wolf, we're being told by naval law enforcement authorities that the final all clear has been given here at the naval yard and that employees, civilian employees as well as military personnel, are reporting back to duty.

This started around 7:29 this morning. A scary moment of deja vu, looking back at that moment in 2013 where 12 people were killed during an active shooter situation right here at the Navy Yard. A woman called in this morning reporting that she had heard what she believed to be shots. Immediately protocols put into place since 2013 went into effect. ERT teams from across the matrix of law enforcement here in Washington, D.C., responding to the area. Also medical people staging on the outside along with backup law enforcement.

There was a search inside Building 197, which is the same building where those shootings occurred two years ago. The preliminary search showed nothing found. A secondary search showed nothing found. At the end of the day, authorities say it was more or less an elaborate fire drill, nonetheless giving authorities an opportunity to see how all of their procedures work, and they say they do, Wolf.

BLIZTER: It sort of underscored though, Joe, how jittery everyone seems to be, especially here in the U.S. capital, given the fact that there are these heightened concerns about some sort of potential ISIS- inspired attack going into the July 4th weekend. This massive response, was that in part because of the extra nervousness that's going on?

JOHNS: They say no. However, as you said, we have been reporting there are concerns across the Washington area, especially at U.S. military and civilian political installations, that there could be problems due to ISIS-inspired threats. Nonetheless, we're told this is standard operating procedure that was put into effect two years ago. As you know, Wolf, there were many problems with the response last time around. This time, they wanted to be prepared. Apparently they were.

BLITZER: And hundreds of law enforcement authorities swarmed into that area. Fortunately it was not anything serious, but it was an important lesson to be learned. Joe, thanks very much.

The incident here in Washington highlights the jitters many are feeling going into this July 4th holiday weekend and the threats that are out there. The U.S. department of Homeland Security and the FBI, they aren't necessarily pointing to what they describe as concrete plots but the call for vigilance has increased fears of possible lone wolf attacks by ISIS sympathizers or operators.

Let's discuss what's going on. Joining us here in Washington, Tom Fuentes, he's our law enforcement analyst, a former FBI assistant director; our CNN counterterrorism analyst Phil Mudd, he's a former Homeland -- he's a former official of the CIA and the FBI; and former Homeland Secretary Tom Ridge, who's here with us as well.

Mr. Secretary, let me start with you. What's your reaction to the reaction that occurred at the Navy Yard this morning?

TOM RIDGE, FMR. HOMELAND SECURITY SECRETARY: Well, first of all, I've always thought you never can blame anybody for being overprepared. I think it's more of a coincidence going in July 4th. But when you have 12 colleagues two years ago lose your lives, lost their lives in that incident at the Navy Yard, you think you hear gunshots, I think there are probably some lessons learned. You had this massive reinforcement capability.

So I think, as I said before, much better. There may be people said why so many people rushing to the scene? Well, that's our instincts. That's what we need to do. And I don't think you can ever criticize people for being over prepared.

BLITZER: Yesterday, Peter King, a member of the House Homeland Security Committee and the Intelligence Committee, was here in "THE SITUATION ROOM". He offered this dire assessment of what's going on right now. Listen to this.

(BEGIN VIDEO CLIP)

REP. PETER KING (R), NEW YORK: There's great concern, going back to dealing with the FBI and Homeland Security over the last two or three weeks. I would say this is the most intense level of concern I've seen maybe since 9/11.

(END VIDEO CLIP) BLITZER: He thinks it's the most intense level of concern maybe since 9/11. Do you agree with him?

RIDGE: Well, you know, I don't have access to the information like I used to. I think we are very much at a heightened sense of alert, but I think the condition is more permanent than it was on 9/11 because of the growing expanse of ISIL, because of the incidents that occurred in three different countries a couple of days ago, the fact they're now in the Middle East and North Africa and they're in Asia.

[13:05:07] So is it a greater threat? Yeah, I think it is. I think it is a much more complicated world. I appreciate what Peter is saying, but I think the circumstances are such now that al Qaeda has metastasized, there are some cells there. But our friend Phil and everyone else will tell you, this is a much broader global scourge. And frankly I don't think we're doing enough overseas. I know you didn't invite me to talk about that right now. We're playing defense at home. I think we have to be a lot more aggressive playing offense overseas.

So it's a much more complicated world for the FBI, for the CIA, and everybody else. It's the nature of ISIL, their use of social media, the expansion of their capabilities. Yes, is it heightened? I just don't want America to be hyper about it. It is a permanent condition. It is a norm we're going to have to deal with until we destroy them. And, right now, we're not making very good process.

BLITZER: The war (ph) against ISIS in Syria and Iraq doesn't seem to be working out that great --

RIDGE: Yes, absolutely.

BLITZE: -- at least so far. What's your analysis, Phil? Because I know there's a balance. On the one hand, you want law enforcement to be cautious, prepared, worst case scenarios. On the other hand, you don't want to overhype what's going on, the fears out there.

PHILIP MUDD, CNN COUNTERTERRORISM ANALYST: I think the public is more jittery than I would be if I were sitting at the threat table at the bureau or the CIA. Look, I don't think this is the worst thing we've seen since 9/11 by a long shot. I don't agree with the Congressman.

We faced real plots, an air plot in 2006, to take down Transatlantic Airliners. Five years or more ago, we faced a backpack plot in New York that was dead serious from al Qaeda. I understand the concern. I agree, we have a metastasized threat. More than a couple cells, we have potentially thousands of people following ISIS tweets. But that is different than facing real al Qaeda plotters who are going after New York subways. Vigilant, right, but I wouldn't be fearful.

BLITZER: The al Qaeda operation would have been a big operation, trying to try to knock out a plane with 200 or 300 people onboard. The ISIS threat is much more restricted, to go after a soft target and kill a few people.

TOM FUENTES, CNN LAW ENFORCEMENT ANALYST: That's right. The al Qaeda type of attack, the big bang type of attack, required coordination, it required international financing, command and control, which then required two-way communication and you stood a better chance of hearing the chatter, of intercepting that kind of communication.

But now ISIS puts out a message to all our followers in the world, go kill. Get a knife. Get a gun. Get a hatchet. Use your car. Go kill. And how do you know what people are thinking? We'd like to say -- I agree with Phil. The people I'm talking to, senior officials, are telling me, look, that we don't see anything greater than normal, but normal is bad now because of that. He said we don't see anything increased necessarily Fourth of July, except when hundreds of thousands of people congregate that's an invitation.

BLITZER: So how do you explain -- and I'll ask you, Mr. Secretary -- that you have someone like Jeh Johnson, a successor of yours, the Secretary of Homeland Security, puts out a memo to all law enforcement: Be careful. The FBI director James Comey puts out a memo to all law enforcement: Get ready. Worst case scenario. You have Jon Miller, the head of counterterrorism for the New York City Police Department, he put out a statement yesterday saying this is the most serious threat on a July 4th weekend we've seen in a long time.

These are serious people. They presumably know a lot more, have more inside information, than any of us have right now.

RIDGE: Well, that's probably true. But I also think they're looking at -- it's more circumstantial than real. I think if there was specific information, we'd know about it and we would be focused and targeted on that. And I just think once we get through this weekend, and I want to remind everybody ,and I don't want to minimize the threat, but I agree with my colleagues. And I don't want your viewers to think Tom Ridge, Secretary of Homeland Security, minimizes the threat.

A couple of things I know are going to happen this weekend. A couple hundred people -- I know these are going to happen -- are going to die on our highways. I know thousands and thousands people are going to go to the hospital because of injuries over July 4th.

Is there a possibility of an attack this weekend? Yes. Is there any specific information about an attack? No. Has law enforcement elevated and heightened their alert system at the local level all the way? Yes. And let's just understand this is a permanent -- it's a norm. And the threat stream has expanded.

Now, whether or not that leads itself to specific attacks in the United States -- if there was specific information, we'd know about it.

BLITZER: Would you agree with Mike Morell, a former acting director of the CIA, he said -- the other day, he said he wouldn't be surprised if we wake up after July 4th and there will have been some sort of ISIS-inspired terror attack in the U.S.?

MUDD: If I were talking to Mike, I'd say, look, chill out. I know him well. But let me talk about this for a moment. Back in about '003, 2003, I

thought we started to get a handle on al Qaeda because we had a central organization that we could penetrate with intelligence means, listening to communications, getting human sources in. The reason you're seeing nervousness across the homeland security spectrum is not because there's a specific threat; it's because when you have runs of people who are acting independently, as Tom was talking earlier, they are not vulnerable to intelligence means. It's a new norm that we don't fully understand yet.

BLITZER: All right, we've got to leave it on that note. But we'll stay on top of this story. Let's hope it's a very quiet, peaceful, wonderful July 4th weekend here in the United States.

Tom Ridge, thank you very much for joining us. Phil Mudd, Tom Fuentes, you guys have no choice.

[13:10:02] You have to join us. He doesn't have to necessarily, but you guys do.

(LAUGHTER)

MUDD: I quit! No more.

BLITZER: Still ahead, the nation's unemployment rate now at its lowest level in seven years here in the United States. This, being the U.S. economy, is heating up. We have a team of analysts; they're standing by to take a much closer look at the numbers.

And later, Donald Trump, he is not backing down. Instead he's tripling down on his controversial comments. Meanwhile, another Republican presidential candidate is calling on Republicans to denounce Donald Trump. We'll have details.

(COMMERCIAL BREAK)

BLITZER: Some major news today on the health of the U.S. economy. Let's get to the numbers right now. The nation's unemployment rate is now at 5.3%. That's the lowest level since April of 2008, just before the financial crisis, the great recession, as it was called. The U.S. also adding last month 233,000 jobs, but the data was less promising when it came to do wagse.

[13:15:04] CNN's money -- CNN Money's chief business correspondent Christine Romans is here to explain the meaning of these numbers.

On the surface, a lot of jobs created. Unemployment rate going down. All positive news.

CHRISTINE ROMANS, CNN MONEY CHIEF BUSINESS CORRESPONDENT: And that's a good milestone when you're looking at that jobless rate in particular, Wolf, because when you're talking about the lowest since April 2008, that means the labor market, as measured by the jobless rate, is the best it's been since before the crisis. And that's an important place to be. It's been two years in the making, of course, when you look at the unemployment rate falling down to 5.3 percent. Look at that. That's a long term chart back to 2007, Wolf, and that really tells the story of reversing what was a terrible, terrible period.

You mentioned wages. Only 2 percent wage growth. That means your paycheck only growing by 2 percent. A lot of folks complaining that, come on, if the job market is getting so good, why aren't wages rising? They haven't been rising yet. Many economists think they will start to eventually rise. But 2 percent, you'd like to see a little bit -- a little bit more than that, Wolf.

BLITZER: And they also point out, some of the critics say, yes, these numbers are encouraging, they're positive. The unemployment rate going down, jobs created, but fewer people, they point out, are in the jobs market right now. That -- those numbers are accurate, right?

ROMANS: Those numbers are accurate, but there's a lot of discussion and consternation about the reasons, Wolf. I mean you've got this huge cohort of baby boomers who came into the labor market in the 1960s and drove up the labor force participation rate to the highest levels in the 1990s and then now are coming out again. Part of it is the baby boomers. Part of it is that people are just discouraged and have been leaving the labor market.

But an important thing to look at, you know, we talk about the under employment rate, the people who are out of work or are working part time, want to be working full time, or people who just feel sidelined, that's been coming down, too. This -- sometimes conservatives call this the real unemployment rate. That is still trending lower, too. You've got seven-year lows for a lot of these gauges in terms of jobless rates and those are important trends. Those are really important trends.

BLITZER: Significant trends. And when you think where the economy was job loss when the president took office in 2009, January 2009, 800,000, 900,000 jobs a month were disappearing.

ROMANS: Right.

BLITZER: How that has changed. That's pretty dramatic over these years. Lots of jobs created. Maybe not at the salaries that people want, but it's better to have a job with a salary, maybe not as high a salary as you want, than to have no job at all.

Stand by. I want to bring in Nia-Malika Henderson.

The political fallout, Nia, from all of this potentially for Hillary Clinton, if it continues down the road, could be significant.

NIA-MALIKA HENDERSON, CNN SENIOR POLITICAL REPORTER: Yes, that's right. I mean you want to be, if you're running as a Democrat, you want to be handed an economy that looks really good. Political scientists and historians debate all the time about what the level of an unemployment means for re-election. And all -- it's not always a straight correlation. If you look at somebody like Al Gore, for instance, the unemployment rate back then was something like 4 percent. He still lost. Ultimately, campaigns and candidates matter. But it also matters that Hillary Clinton, or whoever is that nominee, will have a good story to tell about the economy. You did see President Obama pivot to some of these other issues, like

infrastructure growth, talking about, for instance, minimum wage and you'll, I'm sure, hear Hillary Clinton talk about the same sorts of things.

BLITZER: Yes, he lost the electoral college and he lost the presidency --

HENDERSON: That's right.

BLITZER: Al Gore, but he got half a million votes --

HENDERSON: That's right.

BLITZER: In the popular vote --

HENDERSON: Yes.

BLITZER: Which a lot of people always remind us about.

HENDERSON: Right.

BLITZER: Now we -- we don't know if Hillary Clinton is going to get the Democratic presidential nomination, but if she does, and she's obviously the front-runner, she's got a little bit of a challenge from Bernie Sanders. We don't know if Joe Biden, for example, the vice president, will throw his hat in the ring. We'll get a final word from him in August. But assuming she does get the nomination, is it still the economy stupid, as James Carville used to say back in the 1992 campaign?

HENDERSON: That's right, it's still the economy stupid. You saw Mitt Romney try to run on this as well in 2012. And as he was running, the unemployment rate was also going down. So he lost a bit of an edge there. So for Hillary Clinton, you're going to hear her, of course, campaign on the economy. You're going to hear Republicans, they came out with statements today talking about the low job participation rate. So they've got to figure out what their message is going to be if this continues going into 2016. It will also mean that people just feel better about the economy and it will also mean that you'll hear this refrain I think Bill Clinton started it in 2012, this idea that Democrats just do it better in terms of job creation and in terms of the economy. I imagine Hillary Clinton will make the same argument.

BLITZER: And we're going to hear from the president next hour. I'm sure he's going to be very pleased with these numbers, although he will always say, as he says every month when these numbers come out, still a lot of work to be done.

HENDERSON: That's right. Yes.

BLITZER: All right, Nia, thanks very much. Christine Romans, thank to you as well.

Coming up, George Pataki is the first Republican presidential hopeful to now openly criticize fellow Republican candidate Donald Trump and his inflammatory comments. Governor Pataki says they are simply unacceptable. He's standing by. We'll discuss with him when we come back.

(COMMERCIAL BREAK)

[13:24:08] BLITZER: First he doubled down, now Donald Trump is tripling down on his comments about illegal immigration and Mexicans. He stirred up serious controversy when he said killers and rapists were crossing the border from Mexico into the United States. In an interview with our own Don Lemon last night, Trump refused to back down.

(BEGIN VIDEO CLIP)

DONALD TRUMP (R), PRESIDENTIAL CANDIDATE: Don, all you have to do is go to Fusion and pick up the stories on rape and it's unbelievable when you look at what's going on. So all I'm doing is telling the truth.

DON LEMON, ANCHOR, CNN'S "CNN TONIGHT": I've read the -- I've read "The Washington Post." I've read the Fusion. I read "The Huffington Post." And that's about women being raped. It's not about criminals coming across the border or entering the country.

TRUMP: Well, somebody's doing the raping, Don. I mean, you know, what -- it's -- I mean somebody's doing it. (INAUDIBLE) women being raped. Well, who's doing the raping?

(END VIDEO CLIP)

BLITZER: Republican presidential candidate, the former New York governor, George Pataki, he's calling on other Republican contenders to denounce Trump and what he has to say. Governor Pataki is joining us on the phone right now.

[13:25:09] Governor, thanks very much for joining us. What's been the response to your open letter to more than a dozen Republican presidential candidates calling them -- calling on them to repudiate Trump's comments?

GEORGE PATAKI (R), PRESIDENTIAL CANDIDATE (via telephone): Now, Wolf, so far I have to say I'm disappointed because we're getting responses like, well, I really don't know what he said or I haven't been following it or some wishy-washy response. And this type of speech -- and the conclusion, I'm against illegal immigration. I want to set that out and I think we have to control the border. It's not about illegal immigration. It's about his characterization of the Mexican people. And what he said was, after calling the ones who have come here drug dealers and rapists and thugs and criminals, he said, this is a literal quote, some, I assume, are good people. Well, that's not appropriate language. That's not acceptable in the 21st century.

BLITZER: After the White House -- after the race for the White House last time when the president was re-elected, the Republican National Committee, Reince Priebus, the chairman, they took steps to learn some of the lessons. They wanted to reach out, for example, to Latino voters. Here's the question, governor, how much of a setback for the Republican brand is the -- are these Donald Trump comments?

PATAKI: You know, I don't think it's a setback at all for the brand, Wolf, because it's Donald Trump. It's not the Republican Party. And I don't believe he will be the nominee of the Republican Party. But what is troubling to me is the other candidates not standing up and denouncing this type of horrible speech. Just -- it's so derogatory towards an entire class of Americans.

And, yes, the Republican Party has to reach out to Latinos. I did that when I was governor. I actually carried the Dominican and Puerto Rican vote in New York state. But we can't do it by hiding when someone in our party issues a statement or makes comments like this. It's time for them all to stand up.

BLITZER: Well, he also says he likes Mexicans and he says he's employed a lot of Mexicans. What do you say about that?

PATAKI: I just -- I think it's beyond the pale. You know, the people who have come here from Mexico, the vast majority came here the same reason my grandparents did, to build a better life, to make money, to try to have a future for the family in this great country. And, yes, I believe we have to control our border and stop illegal immigration, but we have to recognize that this is a country of immigrants. My four grandparents were all immigrants and they were discriminated against. And it's time we set that aside, understand we're all in this together.

And, Wolf, quite simply, if the Republican candidates won't stand up to Donald Trump when he makes a comment like this, how are they going to stand up to ISIS or some of the leaders of the world when they're negotiating over world power? And how -- and how are they going to reach out to Latinos?

BLITZER: He's doing well in the polls, though, including in our most recent CNN/ORC poll. He's second right behind the former Florida governor, Jeb Bush. There you see Bush at 19 percent, Trump at 12 percent, everybody else in single digits. Why is he resonating with Republican voters out there?

PATAKI: You know, Wolf, you and I both know Donald. And I know think it's -- Republican voters, he is a national figure. He is a media star. He is constantly in the limelight. And at this point, it's very much about name recognition. I bet you that the vast majority of Republican voters probably haven't heard of half the candidates, but they have heard of Donald Trump. So, yes, he scores high in the poll, but he also scores low in the poll as the one that the fewest number of Republicans would vote for.

So -- but it shouldn't be about Donald Trump. It should be about our country. It should be about treating all Americans equally. And it should be about Republican candidates standing up when we're talking about appealing to the Latino vote and rejecting this sort of derogatory speech towards an entire class of Americans.

BLITZER: George Pataki is the former Republican governor of New York state. He's also a Republican presidential candidate right now. Governor, thanks very much for joining us.

PATAKI: Thank you, Wolf. Nice being on with you.

BLITZER: Thank you.

Some Democrats are certainly delighted by the effect Donald Trump seems to be having on the race for the Republican nomination. Meanwhile, GOP candidates, they're trying to grapple with how to respond to Donald Trump. Here, by the way, are what some of them are saying.

(BEGIN VIDEO CLIP)

SEN. LINDSEY GRAHAM (R), PRESIDENTIAL CANDIDATE: When you label a group of people as rapists and drug dealers, it's more about you than it is them. So I'm not trying to create a political issue over this.

JEB BUSH (R), PRESIDENTIAL CANDIDATE: I don't agree with him. Pretty simple.

SEN. RAND PAUL (R), PRESIDENTIAL CANDIDATE: I really haven't watched Donald Trump too much. I don't know what he's been saying. But he -- apparently he's drawing a lot of attention.

[13:30:00] SEN. TED CRUZ (R), PRESIDENTIAL CANDIDATE: He has a way of speaking that gets attention. And I credit him for focusing on an issue that needs to be focused.

(END VIDEO CLIP)

BLITZER: And let's talk a little bit more about Donald Trump, the race for the White House. Our chief political analyst, Gloria Borger, is here.