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EARLY START

Sanders Vows to Stay in Through California; Trump Wins Oregon, Open to North Korea Talks; 9/11 Bill Will Now Be Taken Up By House. Aired 4:30-5a ET

Aired May 18, 2016 - 04:30   ET

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


(COMMERCIAL BREAK)

[04:32:00] BORIS SANCHEZ, CNN ANCHOR: Breaking overnight: Hillary Clinton and Bernie Sanders each scoring new election victories, but the battle for the Democratic nomination far from over.

CHRISTINE ROMANS, CNN ANCHOR: Donald Trump winning Oregon's primary overnight, but not without creating some new controversy.

Welcome back to EARLY START. I'm Christine Romans.

SANCHEZ: And I'm Boris Sanchez. Happy to be here with you, Christine.

We're 32 minutes past the hour.

And we've got breaking news this morning: a war brewing in the Democratic race for president. Overnight, Hillary Clinton just barely edges past Bernie Sanders to victory in the Kentucky primary. Sanders, as expected though, takes Oregon by a solid margin. Though the win in Kentucky brings Clinton to within 100 delegates, including superdelegates, of clinching the Democratic nomination. Though Sanders remains confident that he does still have a path to the White House.

(BEGIN VIDEO CLIP)

SEN. BERNIE SANDERS (I-VT), DEMOCRATIC PRESIDENTIAL CANDIDATE: It will be a steep climb. I recognize that. But we have the possibility of going to Philadelphia with a majority of the pledged delegates. Before we will have the opportunity to defeat Donald Trump, we're going to have to defeat Secretary Clinton.

(END VIDEO CLIP)

SANCHEZ: We get the latest now from CNN's Jeff Zeleny. He's with the Sanders campaign in California.

(BEGIN VIDEOTAPE)

JEFF ZELENY, CNN SENIOR WASHINGTON CORRESPONDENT: Christine and Boris, Bernie Sanders making clear that he is going to keep going in this final month after winning in Oregon and narrowly losing in Kentucky. He's making the case to his supporters, as defiant as ever, that he's going to make sure that every voice, every vote is counted.

Now, he did not necessarily tell his big crowd of supporters last night in California how difficult the math is. He did acknowledge that he has a steep hill to climb, but he said, "We've had a steep hill to climb this entire campaign." He said it's important to defeat Donald Trump, but he also said that Hillary Clinton should also be defeated.

But this is the case he made for going forward for why he's staying in this race.

SANDERS: There are a lot of people out there. Many of the pundits and politicians, they say Bernie Sanders should drop out.

(BOOS)

The people of California should not have the right to determine who the next president will be.

(BOOS)

Well, let me be as clear as I can be. I agree with you. We are in until the last ballot is cast.

ZELENY: Bernie Sanders clearly making the case he's going forward even as the Clinton campaign shifts almost entirely to Donald Trump.

Now, Bernie Sanders knows that the mathematically speaking, it's an uphill climb for him. He didn't exactly level with his supporters how difficult this is. But going forward in the last final month, unity in the Democratic Party much more of an open question than ever before. That's something that Bernie Sanders barely addressed in his victory speech Tuesday night in California -- Christine and Boris.

(END VIDEOTAPE)

ROMANS: All right, Jeff Zeleny. Thanks, Jeff.

Donald Trump the only Republican still running for president winning Oregon's primary, as expected.

[04:35:01] This as Trump moves to unify the Republican Party under his control with a deal that will have Trump raising money for down-ballot GOP candidates. The presumptive nominee raising some eyebrows, too, with these new comments over North Korea and its nuclear program.

CNN's Jim Acosta has more from Trump Tower in New York.

(BEGIN VIDEOTAPE)

JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT: Boris and Christine, as he's closing in on clinching the GOP nomination, Donald Trump is assuming more control over the Republican Party. Trump and the RNC announced joint fundraising agreement last night that will allow the real estate tycoon to raise money for other GOP candidates.

But Trump is still capable of stirring up controversy. The latest example, his comments to "Reuters" that he would speak with North Korean leader Kim Jong-un. And those remarks set the stage for a big foreign policy meeting Trump will have later today, with former secretary of state Henry Kissinger.

The other big headline from the presumptive GOP nominee is that he's also filed his personal financial disclosure form with the Federal Election Commission. Trump says he reported an income of nearly $560 million and a net worth of $10 billion. The Clinton campaign responded that Trump's PFD is no BFD and that he should release his tax returns, something he says he will do after he is no longer under an audit -- Boris and Christine.

(END VIDEOTAPE)

SANCHEZ: A lot of people really want to take a look at those returns. Thank you, Jim.

Joining us now to break down the primary results and all the day's political action, CNN politics reporter Eugene Scott in our Washington bureau.

Eugene, thank you so much for joining us early this morning.

First off, let's get to last night's results. Let's take a look at the Democratic side. Hillary Clinton really squeaking by in Kentucky, a state she really invested in, winning by fewer than 2,000 votes. On the flipside, in Oregon, Bernie Sanders winning Oregon pretty handily, a state he's expected to do well.

Now, we've heard from Jeff Zeleny speaking about Bernie's approach to all of this, saying he has a steep climb ahead of him but not really leveling with his supporters about the specific math, just how difficult that path to the White House really is. Is Bernie hurting the party by not telling his supporters just how unlikely his nomination is?

EUGENE SCOTT, CNN POLITICS REPORTER: It depends on where you stand in the party. I mean, his supporters would like to see the party move further left and incorporate more of his ideas into their eventual platform and long-term goals. And so, keeping those people inspired, keeping them engaged, keeping them involved in this process, to some people think ultimately benefits the party because it'll take the party in the direction that Bernie supporters think it needs to go to ultimately be as beneficial as possible for the American people.

SANCHEZ: Yet we have this chaos over the weekend in Nevada that is still resonating on the campaign trail and within the party today. You know, this sort of this image -- you can see some of these pictures. The security had to shut this down, had to shut down this Nevada convention. They had to shut it down because it was too chaotic there.

The woman who runs it, the chairwoman of the Nevada State Democratic Party, says she's been getting death threats and horrible threats from the Bernie Sanders supporters. What does this foretell, if anything, about the unity of the party as we head toward Philadelphia?

SCOTT: Well, it shows that we still have a long way to go, like not everyone is on board with Hillary Clinton despite what the numbers say, and that's evident if nothing more than by last night. She barely squeaked by despite winning Kentucky significantly in 2008.

The party leaders are going to have to do quite a bit to encourage this type of behavior from not happening and not becoming the new normal if they're going to be victorious over Donald Trump in the end.

SANCHEZ: The question for me here is how does Hillary, with all this vitriol against her within her own party, win these supporters back moving forward?

SCOTT: Well, it's not very I mean, so many of the people who aren't supporting Clinton are not supporting her for reasons that go back for decades.

SANCHEZ: Right.

SCOTT: So I can't imagine what she could do to bring those people on board within the next several months. I think what she can do that could be effective is be careful and strategic in how she pushes back on them, because many of the concerns that Bernie Sanders supporters are raising are valid to many people in the party. Like the reaction we saw last night, that's our first time seeing something like that.

So, to treat that as if that's the norm from his supporters and the Democratic Party would be unfair.

ROMANS: Interesting.

Let's talk about Donald Trump. He had a wide-ranging interview with "Reuters". He touched on a lot of different things, including gutting these reforms for Wall Street, at a time when so many are still blaming Wall Street for what happened to their salaries or opportunity.

[04:40:03] He wants to gut these reforms for Wall Street. He also said he would talk to the leader of North Korea, something that this administration certainly has not said it is doing. It's working to, you know, through a different diplomatic process quite clearly. Listen to what he said about North Korea.

(BEGIN AUDIO CLIP)

DONALD TRUMP (R), PRESIDENTIAL CANDIDATE: I would speak to him. I would have no problem speaking to him. At the same time, I would put a lot of pressure on China because economically we have tremendous power over China. People don't realize that.

REPORTER: But you say you would talk to Kim?

TRUMP: The one -- I would speak to him. I have no problem with speaking to him.

(END AUDIO CLIP)

ROMANS: I have no problem speaking to him. He also said on North Korea, China can solve that problem with one phone call. Just takes one little call, you solve the entire problem. China can do it. We can make China do it.

Donald Trump weighing in on this subject. Could he fix North Korea and do his supporters I guess believe that he can fix North Korea?

SCOTT: Well, his supporters certainly believe he can fix North Korea. The challenge with Donald Trump, especially for those with foreign policy background, is that he really doesn't have any history that he can fix the problems that he says he can.

Quite frankly, what is it he's going to talk about? He didn't give us any background. We need to know. People want to know, what is it he will say? Obviously, we want to believe that his focus will be keeping America's best interest in mind, but there's some concern if he even knows what that is. He doesn't have a strong foreign policy background.

SANCHEZ: Yes, certainly a lot of people would love to be a fly on the wall for the conversation between Kim Jong-un and Donald Trump.

SCOTT: I would.

SANCHEZ: Eugene Scott, thank you so much.

ROMANS: Would Dennis Rodman go too?

SANCHEZ: He would be a great ambassador. They already have an apprentice relationship.

ROMANS: I think they do. I think you're right. All right. Thanks, Eugene. Nice to see you.

Let's get an early start on your money this morning. Fears of an interest rate hike are back. And that took down stocks yesterday.

Check out the volatility over the past five sessions. Stronger oil prices mixing with bad corporate earnings and now, these worries that the Federal Reserve might raise interest rates in June. Those concerns grew because of this little number, up 0.4 percent. That's how much consumer price has increased in April, the highest monthly rise in three years driven by higher gas, rent, and food prices.

Futures down slightly right now. Stock markets in Europe and Asia are down following that drop in the United States. Oil prices back above 48 bucks a barrel right now.

SANCHEZ: New reaction from around the world after Donald Trump promises to do what no sitting U.S. president has done before, sit down with North Korea's dictator.

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[04:46:40] ROMANS: Donald Trump opening up a fresh new can of foreign policy worms, announcing if he becomes president, he would have no problem sitting down with North Korean leader Kim Jong-un. It's a radical departure from current U.S. policy. Trump says he would try to convince Kim to kill his nuclear weapons program.

I want top bring in CNN's Paula Hancocks. She joins us live on the phone this morning from Seoul.

Good morning. What's the reaction there?

PAULA HANCOCKS, CNN INTERNATIONAL CORRESPONDENT (via telephone): Well, Christine, there has been some surprise at what Donald Trump said, but it's not the first time that what he has said has surprised South Koreans. Remember, he's also said he thinks U.S. troops could be pulled out of the country, and they could be allowed nuclear weapons. So, there's certainly surprise that he's so willing to step into the arena with Kim Jong-un, but others have said the current policy by the Obama administration doesn't appear to be working, that strategic patience that even though progress in the nuclear missile program may have slowed down somewhat, he's still made progress. And we've seen over recent months the intense nuclear missile tests.

So, there is a school of thought that, why not. Maybe this could be the way to go as the current policy is not working. And also remember that Barack Obama actually said something very similar nine years ago when he was campaigning to become president.

He said at a CNN Democratic debate that he would meet with the leaders of Syria, Iran, North Korea, other countries that were hostile to the U.S. He would be willing to engage with them because he thought that it was important to try and move the relationship forward. So, it's not dissimilar to what Donald Trump is saying at this point.

But certainly Donald Trump has enjoyed talking about Kim Jong-un. In the past, he's also, remember, called him a maniac. He also said that he does deserve some credit as he manages to eliminate his rivals so well. Christine?

ROMANS: Paula, he also said in that interview with "Reuters", Donald Trump said China can solve this problem with one phone call. The United States has tremendous influence over China and should push China to with one phone call end North Korea's -- you know, the problems with North Korea. If China had that kind of influence, wouldn't it have already done that?

HANCOCKS: Well, it's a good point. The fact is we have to remember why China has this relationship with North Korea. They are the biggest trading partner. They are certainly pretty much the only ally that North Korea has.

But China does not want North Korea to collapse. They do not want 25 million refugees coming across their borders. And also, if North Korea collapses, then they have a U.S. presence on their border. So, China has many reasons for wanting to keep the North Korean regime

going, but certainly you can see they have lost patience with them recently as they have agreed to go along with those much stronger sanctions passed by the United Nations in March. Certainly, the relationship between North Korea and China is frosty at best. The leader of North Korea hasn't even met the leader of China yet.

ROMANS: Interesting.

Paula, thanks so much for that from Seoul for us this morning.

SANCHEZ: The Senate defying the White House and giving unanimous approval to legislation that would allow the families of 9/11 victims to sue Saudi Arabia if the kingdom is found to be liable in the terror attacks. The Obama administration has lobbied against the bill, and the Saudis have threatened to sell off billions of dollars in U.S. assets if it does pass.

We get more now from CNN's Michelle Kosinski.

(BEGIN VIDEOTAPE)

MICHELLE KOSINSKI, CNN WHITE HOUSE CORRESPONDENT: Hi, Boris and Christine.

Right, this was remarkable. I mean, look at the message that this sends. What could be more clear than this? That not single Democrat in the Senate voiced opposition to this bill, despite the way the White House obviously feels about it.

I mean, they've issued several strongly worded warnings basically against this legislation, saying it could hurt national security. Dangerous was the word they used just yesterday, saying this could open the door for the U.S. to be sued in what they called kangaroo courts. But, clearly, the Senate wasn't buying these warnings. At least these senators put the interests of the 9/11 families ahead of the potential risks that the White House has been citing.

So, what's the possibility of this bill ultimately passing? The White House has said several times it would veto this bill. But Senator Chuck Schumer has said he would vote to override that veto. He feels other Democrats would do the same.

Now, just because you vote for a bill doesn't necessarily meant that you would take it to the next level and vote again to override a veto and oppose the White House. But given the sentiment in the Senate during the voice vote yesterday, there's a thought that could happen.

First, it has to pass the House, though. That's where things are a little less clear. We know there's some opposition in the House. We heard House Speaker Paul Ryan just yesterday say he feels consequences to this bill, let's let it move through the process. Let's everyone take a very close look at it.

Given that this was a unanimous voice vote in the Senate, though, there's a thought that this could well pass the House also -- Boris and Christine.

(END VIDEOTAPE)

ROMANS: All right. Michelle, thank you.

Stocks dropped yesterday as a new round of worries hit Wall Street. Fed, Fed, Fed. We'll tell you what they are when we get an early start on your money, next.

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[04:56:20] SANCHEZ: More bombings and bloodshed in Baghdad. Explosions ripping through three neighborhoods in the Iraqi capital on Tuesday, killing at least 46 people and wounding more than 100 others. ISIS is claiming responsibility for one of the attacks. More than 200 people have been killed in Baghdad since last Wednesday.

The U.S. and Russia are prepared to air drop food and emergency supplies to war-ravaged towns in Syria if President Bashar al Assad continues blocking humanitarian aid to his own people. That announcement coming from Secretary of State John Kerry and his Russian counterpart, Foreign Minister Sergei Lavrov after a round of peace talks in Vienna. As far as the ceasefire plan for Syria, there's been no progress reported on that yet.

ROMANS: All right. Let's get an early start on your money. Fed fears are back after numbers on housing, industrial output, and inflation picked up. A strengthening U.S. economy could mean a rate hike as early as June. We'll get more details on how the Fed feels about the economy later today when it releases minutes from its last meeting. Stock markets in Europe are lower. Markets in Asia posting losses overnight following the big decline in the U.S.

A billionaire investor seems to be bracing for a storm in the stock market. George Soros invested $264 million in Barrick gold during the first quarter. That's the world's largest gold miner. He also acquired 1.1 million options to buy a popular gold ETF, which mirrors the price of gold.

Of course, gold is seen as a safe haven investment, a scaredy cat investment, if you will. So, investors can park their money there if the stock market starts to fall. Soros is known for his big bet against highly valued assets, cashing in when they drop. Goldman Sachs also just downgraded the market to neutral for the next 12 months. It says profit growth could still be steadily growing, but stocks look a bit overvalued here.

Millions more American workers will be eligible for overtime pay later this year. The labor Department expanding mandatory overtime pay to workers who make less than $43,400 a year. It's about $913 a week. That's roughly double the current threshold of $23,660.

So, right now, just 7 percent of salaried workers, people with a salary, are automatically eligible for overtime. Under the new threshold, 35 percent of salaried worker will become automatically eligible. This is according to the Labor Department. In 1975, it was as high as 62 percent.

The change will start December 1st. It's expected to affect retail and restaurant workers the most.

Now, some business groups say it's too drastic an increase. One of the big complaints had been in some of these jobs, people will be called a shift manager and because they were manager, then they were not eligible for overtime because they weren't an hourly worker anymore. So, the government is trying to change that.

Also, because they were unable to raise the minimum wage. So, the Labor Department is looking for ways to update some of what they think are out of rules so that working Americans can get more money.

SANCHEZ: Break through some of those moves.

ROMANS: Yes, exactly.

SANCHEZ: EARLY START continues right now.

(MUSIC)

SANCHEZ: Breaking overnight, a split decision. Bernie Sanders takes Oregon, and Hillary Clinton wins Kentucky, as a new war heats up inside the Democratic Party.

ROMANS: Donald Trump closer to officially clinching the Republican nomination and offering an olive branch to North Korea. We are live to explain.

Good morning and welcome to EARLY START. I'm Christine Romans.

SANCHEZ: Happy to be here with you, Christine. I'm Boris Sanchez. It's Wednesday, May 18th, 4:59 on the East Coast.

And we have breaking news this morning: a war brewing in the Democratic race for president. Overnight, Hillary Clinton just barely edging past Bernie Sanders to victory in the Kentucky primary. Sanders, though, as expected taking Oregon by a solid margin. But the win in Kentucky brings Clinton to within a hundred delegates, including super delegates, of clinching the Democratic nomination.

Sanders, though, remains confident that he still has a path to the White House.