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Dow Plunges More Than 300 Points from the Open; Trump and Cruz Trade Punches During GOP Debate; Lindsey Graham Endorses Jeb Bush; Aired 10-10:30a ET

Aired January 15, 2016 - 10:00   ET

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


[10:00:02] CAROL COSTELLO, CNN ANCHOR: Polo Sandoval, many thanks.

The next hour of CNN NEWSROOM starts now.

And good morning. I'm Carol Costello. Thank you so much for joining me. We begin on Wall Street. The Dow tumbling hundreds of points in the opening minutes.

Alison Kosik is at the New York Stock Exchange keeping an eye on things. Good morning.

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Good morning, Carol. This is a sell off that began in China and made its way to Europe and is now here. We are seeing the Dow down 383 points.

Pick your poison on what's worrying the market. First of all, you look at what happened in China overnight. China officially in a bear market, which means its stocks are down 20 percent from a recent high there.

We're watching oil prices here crashed to new lows that we haven't seen since 2003. We're seeing oil below $30 a barrel.

We're also getting down beat economic data. Retail sales numbers in the red not looking good for the all important month of December. That's when everybody goes Christmas shopping and holiday shopping and retailers just couldn't pull out a win for that month. That's a huge worry for Wall Street because it's really -- it's really a way to get your finger on the pulse of how consumers feel, how confident they feel about spending their money.

Also, a regional manufacturing index falling to a level we haven't seen since the recession. So these aren't all great things. Not -- these are certainly worries that are weighing on investors and reasons you're seeing them push the sell button today -- Carol.

COSTELLO: All right. Alison Kosik, we'll get back to you. Thank you.

Any minute now the former Republican presidential candidate Lindsey Graham will throw his support behind Jeb Bush. The announcement is coming from Charleston, South Carolina. That is, South Carolina is Senator Graham's home state. It's a critical state in the opening round of primaries. We're keeping an eye on things, we'll take you back to Charleston when

Senator Graham takes to the podium.

But first, more on last night's big debate and the fight for the spotlight. Republican presidential rivals, Donald Trump and Senator Ted Cruz, steal the show at the first GOP debate of 2016. Both sides, both candidates, rather, taking off the gloves, hitting each other hard. Today Trump blasting his rival's performance.

(BEGIN VIDEO CLIP)

DONALD TRUMP (R), PRESIDENTIAL CANDIDATE: He came at me last night. It was inappropriate. And I hit him very heart. But, I mean, I had no idea that he was going to take it that way. He's got a problem. He's got to straighten out the problem.

I don't know that he's a nice guy. I think he hurt himself last night. You know he's a good debater but he's very strident. And a lot of people aren't going like that. He's a very strident kind of a guy and I thought it was inappropriate.

(END VIDEO CLIP)

COSTELLO: Even though there were seven candidates on stage it felt more like a two-man show as Trump and Cruz went head-to-head.

(BEGIN VIDEO CLIP)

SEN. TED CRUZ (R), PRESIDENTIAL CANDIDATE: I'm not going to use your mother's birth against you.

TRUMP: OK. Good. Because it wouldn't work.

You have a big lawsuit over your head while you're running. Who the hell knows if you can even serve in office?

CRUZ: I'm not going to be taking legal advice from Donald Trump.

TRUMP: You don't have to.

CRUZ: Not a lot of conservatives come out of Manhattan. I'm just saying.

TRUMP: That was a very insulting statement.

(END VIDEO CLIP)

COSTELLO: And today it's back to business for the candidates. One hour from now, Trump holds a town hall in Iowa and later today Senator Cruz rallies voters in South Carolina.

But let's get right to CNN's Sunlen Serfaty. She is live in North Charleston, South Carolina, this morning where all that debate drama played out.

Good morning, Sunlen. SUNLEN SERFATY, CNN NATIONAL CORRESPONDENT: Good morning, Carol. The

dust still settling here in South Carolina after that face off with Donald Trump and Ted Cruz which dominated so much of last night's debate.

You know, Ted Cruz largely in this campaign so far avoided going after Donald Trump. So it was really significant last night that he seemed to bring specific, pointed, seemingly well-planned outlines of attack against Donald Trump and Trump afterwards declaring that their bromance, their truce is over and its off. So it'll be interesting to see what happens next between them. But here are a few of the other battles that led last night's debate.

(BEGIN VIDEOTAPE)

CRUZ: In that State of the Union President Obama didn't so much as mention the 10 sailors that had been captured by Iran.

JEB BUSH (R), PRESIDENTIAL CANDIDATE: Hillary Clinton would be a national security disaster. If she gets elected, she's under investigation with the FBI right now. She might be going back and forth between the White House and the courthouse.

DR. BEN CARSON (R), PRESIDENTIAL CANDIDATE: I'm very happy to get a question this early on. I was going to ask you to wake me up when the time came.

NEAL CAVUTO, FOX BUSINESS NETWORK DEBATE MODERATOR: And as you know, the U.S. Constitution says only natural born citizens are eligible for the office of the president of the United States.

CRUZ: Some of the more extreme ones exist that you must not only been born on U.S. soil but have two parents born on U.S. soil. Under that theory, not only would I be disqualified, Donald J. Trump would be disqualified.

TRUMP: But I was born here.

CRUZ: But I'm happy to consider naming you as a VP and so if you happen to be right you could get the top job at the end of the day.

SEN. MARCO RUBIO (R), PRESIDENTIAL CANDIDATE: I hate to interrupt this episode of CourtTV.

TRUMP: I will gladly accept the mantle of anger.

[10:05:01] RUBIO: If this president can confiscate every gun in America, he would.

GOV. CHRIS CHRISTIE (R), PRESIDENTIAL CANDIDATE: Not by signing a constitutional executive orders. This guy is a petulant child.

CRUZ: Not a lot of conservatives come out of Manhattan.

TRUMP: That was a very insulting statement that Ted made.

CHRISTIE: You had your chance, Marco. You blew it.

GOV. JOHN KASICH (R), PRESIDENTIAL CANDIDATE: Here's what I'm saying.

TRUMP: I'm liking him tonight.

KASICH: For too long --

RUBIO: I saw you on the Senate floor flip your vote on crop insurance because they told you it would help you in Iowa.

CRUZ: I appreciate you dumping your oppo research folder on the debate table.

RUBIO: No, it's your record.

(END VIDEO CLIP)

COSTELLO: OK. A look at some of the happenings in debate. Now back to Charleston, South Carolina, where Senator Lindsey Graham is endorsing Jeb Bush. Let's listen.

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: A reassurance. I fell short. I'm proud of the effort. Now I am a citizen having to cast my vote as to who I want to be commander-in-chief for that 1 percent fighting force. I have concluded without any hesitation, without any doubt, that Jeb Bush is ready on day one to be a commander-in-chief worthy of the sacrifices of the 1 percent who have been fighting this war.

Last night he said, I will have their backs. I believe he will. Last night he explained in the best possible terms why we need partners to win a war that we can't afford to lose.

To those of you who worry about going at it alone, you don't have to worry with Jeb because he understands that America can't go at it alone but of all others running for president, I think he has the ability to bring the world on board.

Mr. Trump doubled down on the idea that we as a nation should ban every Muslim in the world at least temporarily from coming to our great country. I can't think of a worse idea in terms of how to fight and win this war. Many of the people running for president are eerily silent on this issue.

Last night I heard from Jeb Bush the right answer. That we need to vet and make sure that those who come from war-torn regions are properly vetted so they don't infiltrate our country to do harm. But we cannot and should not declare war on a religion because when you do you make it almost impossible to form the partnerships that are so desperately needed to protect our country.

What Jeb Bush understands I think better than anyone else is that this is a religious war and the only way to win this war is to partner within the faith to destroy a common enemy. Last night he did not talk the most but he made the most sense. Last night he demonstrated somebody who in my view is ready on day one to be commander-in-chief and a temperament that the next commander-in-chief needs to possess.

Someone who's thoughtful, quietly resolved to protect America's interest and capable of reaching out to the world at large to reset a world that is very much in danger. It is not enough to criticize Barack Obama. You have to have an alternative of leading from behind and Jeb Bush has that alternative. His plan to defeat ISIS is the most comprehensive and well thought out on anyone on both sides of the aisle.

And finally when it comes to speaking up and speaking out about emotional issues like immigration, the thing I admire most about Jeb is he stayed true to who he is, that he hasn't tried to get ahead in a contested primary by embracing demagoguery. He's not running to be commander-in-chief by running people down. He's trying to create the ability to grow our party that desperately needs to grow.

Here's what I'm convinced of more than anything else that Jeb Bush is president of the United States and he'll put the country ahead of the party. That he was a governor of a very diverse state that brought people together. America is a very diverse country, desperately in need of leadership to bring us together. As to South Carolina, we have a reputation of picking the most conservative person who can win.

[10:10:05] I think Jeb by any reason of definition is a fiscal and social conservative and above all others he understands conservatism when it comes to national security. Conservatism when it comes to national security is building a strong military, second to none and using it smartly forming alliances that will make us safe over here. Jeb has come to the conclusion that I have. You have two choices in fighting this war. Fight it over there smartly or fight it in our backyard.

I've spent most of my adult life in the military. It's been one of the things I'm most proud of. I know those who are fighting this war. I've walked in their shoes. I've spent time trying to learn their world. I would not endorse someone that I did not believe in that would really truly have their backs.

So ladies and gentlemen, South Carolina is going to reset this race. On February 20th we're going to give Jeb Bush the momentum that he needs and deserves to win the nomination and to the Republican Party, Jeb Bush is going to be a nominee that can win an election that is a party we can't afford to lose. He will be the president that can reset the world, bring us together and solve hard problems.

Above all else he's a good man who's comfortable in his own skin and who understands truly what makes America great is our diversity. Not who we hate but what we love. The next president of the United States, Jeb Bush.

(APPLAUSE)

BUSH: Thank you. Wow. Thank you, sir. Thank you.

Lindsey, thank you so much. General, to my friends and supporters. I'll be very brief. First, Lindsey Graham is a patriot. He loves this country. You just heard it, how he spoke from his heart about what's at stake here.

What's at stake is our way of life. The founding of our country based on freedom and human liberty is at stake.

The president of the State of the Union address talked about the threat of Islamic terrorism in a way that he typically does which is the straw man argument. In this case he made the case something, well, this is not a threat because they can't invade us. That's a total misreading of what this threat is about.

Radical Islamic terrorism is a threat to our freedom. They see our freedom as our weakness. And when people are struggling to make ends meet as they are today, a majority of Americans are living paycheck to paycheck, a majority of Americans have less than a thousand dollars of savings, 63 percent of Americans can't afford a $500 car repair.

In this kind of environment to attack our freedom would be devastating for our economy and I think he totally misreads the dangers here and as Senator Graham said, the way that we win this fight, win this war is to win it there and to make sure that the homeland is safe.

Lindsey Graham is an extraordinary person. We've been friends for a long while. I admire the fact that as a senator he views his job to forge solutions to problems rather than to try to tear things down and I've learned now at the age of 62 that one of the valuable lessons in life is to know what you don't know. It's a huge advantage. Particularly in the ego-laden political world where everybody feels that they've already got it all figured out.

Well, the world is too complex for any one person to figure out everything. And here's the kind of guy Lindsey Graham has been. I've sought out his advice even though we were both competitors for the Republican nomination for the presidency. And he gave it. He's consistently done so. Because he's not doing this for his own ego. He ran because he wanted the voice of a strong national defense and the role of America in the world, the leadership role to be heard.

And while he may not have been successful in terms of electoral politics, you were successful in that guard. And I am honored to be your student in many ways in that regard and so I just appreciate the fact that you're involved and I will continue to seek out your advice.

One final point, South Carolina is going to be a really important primary. It always seems to be that way. The table is set by Iowa and New Hampshire and the direction of campaigns are set here in South Carolina.

[10:15:00] And here's my pledge. I will campaign with heart and conviction about the need for a strong national defense, to rebuild homeland security and equally important to make sure that when veterans after serving in the military, that their -- the contract is fulfilled for them.

One of the lessons I've had is to seek the best advice from the veteran's community, disproportionally by the way from South Carolina, where you all have provided me a lot of advice. We were the first campaign to lay out a detailed plan to reform the Department of Veterans Affairs. And I pledge to you all that we will make sure that that is the first priority.

It is to me disgraceful, it is absolutely disgraceful that even today with all the scandals that only three people have been fired with the scandalous behavior of having waiting list be dropped without veterans getting care and people dying.

It is a scandal. But yet three people have been fired. The Congress has worked to give the department the freedom to be able to have much more leeway in firing people but yet they haven't embraced it. The procurement systems, the health information systems, the inability of veterans to have choices outside of the veterans health care system, all of that has to change dramatically and I pledge to you all and to the people of South Carolina not only will I be a candidate that will advocate -- continue to advocate a rebuilding of our military, strengthening of our intelligence capabilities, diplomatically in terms of foreign policy have an America that leads the world so that we can create peace and security but back home the first priority will be to reform health care services for veterans that deserve it more than anybody else that should be receiving government benefits.

With that, Lindsey, thank you again for your support. General, thank you for your leadership. Not just in the military but education as well. It was a blast being on the stage last night in South Carolina.

A quick -- just quick note. I didn't realize I was doing it but I made reference to the state that I really appreciate a whole lot I think six times last night. I might have mentioned you, I mentioned Governor Haley, Boeing which does make planes by the way that are sold in China here. Just I don't know if Mr. Trump on his way out saw the planes that had the painted -- you know, the airlines from China.

The Citadel, and Emanuel AME, this is an extraordinary community, an extraordinary state with great leaders, and I'm blessed to be a candidate that will campaign really hard here in South Carolina.

Happy to answer any questions. Get back up here.

GRAHAM: OK.

UNIDENTIFIED REPORTER: About endorsements, that you pick up Senator Graham's support, but you also get some very large enemies with that. Are you prepared for that in South Carolina?

BUSH: Enemies? You didn't tell me about your enemies, Lindsey.

(LAUGHTER)

GRAHAM: You'll get to know them.

BUSH: Look, this is a -- this is a big deal nationally in the sense that Lindsey Graham is by far and away recognized as if not the most -- the strongest policy oriented, national defense senator, not just a senator but just from a policy point of view, the most consistent supporter of a strong national defense in the country. Period. Over and out. He has a following that is national. And I'll take all of his enemies because he's got a lot more friends.

UNIDENTIFIED REPORTER: Senator Bush, Senator Rubio is out with an ad today on the super PAC and campaign trail, what do you make of that?

BUSH: This politics, politics is not -- you know, I'm a big boy. I actually find that advertising so far pretty tamed. I don't know why -- you know, if you're a candidate, you can't play the role of victim. So I'm not going to do it and he shouldn't either.

Our records will be scrutinized and people have this incredible ability to filter out all the nonsense and to get to the point. And here's what I am. I'm not a cut and run politician.

COSTELLO: All right. We're going to -- all right, we're going to step away from this. As you heard Senator Lindsey Graham endorsing Jeb Bush for president and Jeb Bush being very appreciative of Senator Graham's endorsement.

Let's talk about it. CNN political analyst and "Daily Beast" editor- in-chief is here, John Avlon, and CNN political commentator and former communications for Senator Ted Cruz, Amanda Carpenter is with me as well.

Good morning to both of you.

AMANDA CARPENTER, CNN POLITICAL COMMENTATOR: Good morning.

JOHN AVLON., CNN POLITICAL ANALYST: Good morning, Carol.

COSTELLO: Good morning. So, Amanda, does this matter?

CARPENTER: Well, here's the thing. Jeb Bush was never lacking for endorsements or financial support in this race. But I was really struck by something that Lindsey Graham said. He said this race will reset after South Carolina. Now, whoa, whoa, whoa. New Hampshire was supposed to be Jeb Bush's state where the race would reset and they sent lots of campaign staff to Iowa to avoid an embarrassing finish there.

[10:20:01] And here's what I'm kind of wondering in light of last night's debate. You know, Trump has a lot of momentum here that has people worried. I think candidates need to drop out and get behind a candidate who can win. And the fact that Jeb Bush thinks that this race may reset in South Carolina, he's going to wait until South Carolina to have a good showing?

We don't need this kind of projected nonsense. I think Jeb has the financial support to go longer than other candidates. But certainly other candidates in the undercard debate, you know, Ben Carson who's dwindling down, they need to drop out so that they can lend support to a candidate who can win, so we can finally have a real contrast with Donald Trump and winnow the field because this big, bad field is giving him too much power.

COSTELLO: OK. So, John Avlon, just so all of our viewers know, Donald Trump already responded to this endorsement. I want to read to you what he just tweeted out. Quote, "Jeb Bush who did poorly in last night, in the debate and whose chances are winning is zero just got Graham's endorsement. Graham quit at zero."

There are some analyst, though, who say that Jeb Bush dropping out of the race would actually hurt Donald Trump.

AVLON: Well, that math is peculiar. I thought that Jeb Bush actually had a strong debate last night. But look, Lindsey Graham is a respected figure in the Senate if not a powerful presidential candidate. And certainly in South Carolina. And the fact that he decided to endorse Jeb Bush who's had a lot of bad news over the last couple of weeks and months, instead of say, a Marco Rubio, who's tried to varnish his foreign credentials, I think is significant.

Look, you know, we have been through this pregame for months and months now. Millions of dollars have been spent and now consultants can't wait to winnow down the field. Let the voters do that. South Carolina is the third state. Lindsey Graham is a force in the state. We'll see if this actually changes the outcome and gives Jeb a boost. But it's the first bit of good news he's had in a long time.

(CROSSTALK)

CARPENTER: But --

COSTELLO: All right. So wait, wait. Before we go on, I must take a break so we can pay the bills here at CNN. So Amanda and John, stand by. We'll continue our conversation after a break. I'll be right back.

(COMMERCIAL BREAK)

[10:26:25] COSTELLO: A clash of the frontrunners in the first Republican debate of 2016. One thing was abundantly clear. The bromance is definitely over between Ted Cruz and Donald Trump. The final straw may have been this exchange over, quote, "New York values."

(BEGIN VIDEO CLIP)

CRUZ: But everyone understands that the values in New York City are socially liberal or pro-abortion or pro-gay marriage, focused around money and the media.

TRUMP: New York is a great place, it's got great people, it's got loving people, wonderful people. When the World Trade Center came down, I saw something that no place on earth could have handled more beautifully, more humanely than New York.

(END VIDEO CLIP)

COSTELLO: Here's what the "Washington Post" had to say about that exchange. Quote, "Cruz was knocked back somewhat by Trump over the New York values attack. Hard to look like you're on the wrong side of those who helped rebuild New York City after 9/11." Well, let's talk about that and more, CNN political analyst and "Daily

Beast" editor-in-chief John Avlon is back and so is CNN political commentator and former communications director for Senator Cruz, Amanda Carpenter.

So, Amanda, you know, Ted Cruz was having a great debate up until that point. And Donald Trump delivered that -- you know, what he said about New York and how it rebuilt after 9/11 and that kind of shut Ted Cruz down.

CARPENTER: Well, here's the thing. I think there's consensus on the birther question, Cruz kind of won that segment, and this one didn't go so well. I don't know if he'll continue this attack. I don't know that it matters to people in Iowa. When I heard Ted Cruz talk about New York values, I thought "New York Times," Manhattan, big buildings, money. Donald Trump went to 9/11. That's his card to play. So we'll see if that continues but I expect there are going to be more debate, frankly, about the birther question rather than New York values.

COSTELLO: I tend to agree with Amanda, John.

AVLON: Yes. No, look, this matters and this is serious. You know, I was working as chief speechwriter for Rudy Giuliani during 9/11. I rarely am in the habit of agreeing with Donald Trump. But instead of coming here just to beg for money and try to slam people into buying the country, to demagogue his way to the presidency, Ted Cruz should accept the offer of -- Police Officer Moira Smith who died in 9/11 to go down to the ground zero memorial to see New York values, to reflect on New York values.

And while he's there he can look across the street at Goldman Sachs, where his wife works which gave him an undisclosed loan for his campaign. All right?

(CROSSTALK)

CARPENTER: No --

AVLON: So stop trying to divide the country in cheap attacks that have no basis in fact.

CARPENTER: OK.

AVLON: You can drop by the "National Review" while he's at it.

CARPENTER: Speaking of no basis in fact, that Goldman Sachs loan was disclosed multiple times, multiple years on Senate financial disclosure forms. It was not disclosed on the FCC form so it's just not factual to say it wasn't disclosed on that point.

COSTELLO: Well, here's the thing, Amanda, with that.

AVLON: You bet. Saying it's not disclosed.

COSTELLO: Well, let me just say this. Because last night in the debate, Ted Cruz says he didn't have millions and millions of dollars, he tried to paint himself as somebody who was -- who didn't have much money but his wife works for Goldman Sachs. He's a Harvard educated constitutional lawyer.

CARPENTER: Sure. Sure.

COSTELLO: He's not a poor guy.

CARPENTER: Yes, but if you look at that race which he talked about, David Dewhurst was spending $25 million in that race to swamp him. Ted Cruz didn't have wealthy donors. And this is a story that is very endearing to the conservative activists who supported his long shot candidacy where he beat the establishment.

I mean, Cruz and his wife Heidi took out a loan betting on themselves because they believed in running for the Senate. That's a pretty big risk to take. Four people who have good jobs. I mean, Heidi Cruz believes in her husband so much right now, she quit her job at Goldman Sachs to work at the campaign. And so I think it's a symbol of commitment. If other people want to make other things of it, I don't see eye-to-eye with them on that.

AVLON: You can't complain about crony criticism if you benefited personally and professionally.

CARPENTER: Where are you supposed to get a loan? I mean --