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EARLY START

President Obama Takes Questions From Reporters; World Leaders Rattled By Donald Trump; Does Inspector General's Report Undermine Clinton Credibility?; How Does A New Taliban Leader Affect U.S. Strategy?; Clinton Defends Private Email Use & Slams Report; Trump Pounces On Clinton, Calling Her "Crooked". Aired 5:30-6a ET

Aired May 26, 2016 - 05:30   ET

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


[05:30:00] BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The dropping of the atomic bomb, the ushering in of nuclear weapons was an inflection point in modern history. It is something that all of us have had to deal with in one way or another.

Obviously, it's not as prominent in people's thinking as it was during the Cold War, at a time when our parents or grandparents were huddling under desks in frequent drills. But, the backdrop of a nuclear event remains something that, I think, presses on the back of our imaginations.

I do think that part of the reason I'm going is because I want to, once again, underscore the very real risks that are out there and the sense of urgency that we all should have. So, it's not only a reminder of the terrible toll of World War II and the death of innocents across continents, but it's also to remind ourselves that the job's not done and reducing conflict, building institutions of peace, and reducing the prospect of nuclear war in the future.

In some ways we've seen real progress over the last several years. The Iran nuclear deal is a big pieceof business because without us having to fire a shot we were able to persuade a big, sophisticated country that had a well-developed nuclear program not to develop nuclear weapons.

The START treaty that I negotiated in my first couple of years in office with the Russians has reduced our respective stockpots. The nuclear security summit and all the work that we've done on that score has made it less likely that nuclear materials fall into the hands of terrorists or non-state actors.

And although we have not seen the kind of progress that I would have liked to seen with respect to North Korea, what we have been able to do is mobilize the international community so that their proliferation activities are scrutinized much more carefully and they have far fewer countries that are tolerant of potential actions by North Korea outside of their own program.

Having said that, North Korea is a big worry for all of us. They're not at the point right now where they can effectively hit U.S. targets but each time that they test, even if those tests fail, they learn something. And it is clear that ideologically that they're still convinced that -- and Kim Jong Un, in particular, seems to be convinced that his own legitimacy is tied up with developing nuclear weapons.

You pointed out the continuing tensions that exist in South Asia. That is still a concern. And we know that terrorist organizations would have no compunction about using a weapon of mass destruction if they got their hands on it, so we've got a lot of work to do.

I think we've built up an architecture during the course of my presidency that has made a difference -- that has focused attention on some key points of vulnerability, but we're not where we need to be yet. And, obviously, we haven't achieved all the goals I set when I spoke in private at the beginning of my presidency.

Of course, I noted at the time that I didn't expect to be able to achieve all those goals during the course of my presidency, or even in my lifetime, and this is going to be an ongoing task. But it's one that I think we have to be paying a lot of attention to.

UNIDENTIFIED MALE: John Kerry, the Secretary of State, called the North Korean nuclear program the biggest threat in the world right now -- the gravest threat. Do you agree with that? Do you see this nuclear program as the worst thing going on?

[05:35:00] OBAMA: Well, it is not the thing, necessarily, that poses the most immediate risk. Obviously, ISIL using rifles and crude bombs can kill a lot of people in a Paris or a Brussels. And people are rightly insistent that the world's community stamp out ISIL, so there's a reason why we are focused on that.

But this is not a situation where we can afford to just focus on the short term. Over the long term, when you had such an unstable regime that is so isolated, that generally flouts international norms and rules, more than perhaps any other nation on earth, that is also devoting enormous national resources hell-bent on getting nuclear weapons that they can fire long distances.

That poses a kind of medium-term threat that we have to pay a lot of attention to and I assure you, it's something that my administration has paid a lot of attention to. It's something that I think has been at the center of the trilateral work that we've done with our close allies in the region. It's something that we've put at the center of our discussions and negotiations with China.

And, as I said before, what we've seen actually is improved responses from countries like China. Countries in the region like Vietnam and Burma, taking these issues much more seriously because of our engagement. And so, that may reduce the risks of North Korea selling weapons or fissile material to other countries or bring it out on the black market.

But it does not, so far at least, solve the core problem of North Korean continuing to develop its program, and we're going to have to continue to work in a concerted way. In the meantime, I've been working with the Pentagon for several years now in making sure that we can develop the kinds of defense architecture that can protect the United States and our allies from an unexpected escalation -- Carol.

(CAROL): Thank you. You've said before that when you talk to world leaders they often ask you about the presidential election. Can you give us a sense of conversations that you've had so far? What they're saying to you, what you're saying to them?

Particularly now that Donald Trump is the nominee and he recently said that Japan should pay for the U.S. troop presence there. But also, on the Democratic side, what they're saying about that and what you think of that because there's obviously continuing to be divisive with Bernie Sanders saying he would take it to the convention and he's endorsed your Democratic Party chair -- her primary opponent.

Should he change course? Have you decided that you're just not going to get involved until one of them concedes to the other?

OBAMA: Well, look, the world pays attention to the U.S. elections. They pay more attention to our elections, sometimes, than we pay to theirs because the United States is, as I've said before, at the heart of the international order.

And even those countries that are critical of us, even those countries that complain or question particular policy decisions that we make, know that ultimately things don't hold together so well if the United States is not making good decisions, and count on us to provide a certain level of stability and direction in meeting global challenges.

So, they are paying very close attention to this election. I think it's fair to say that they are surprised by the Republican nominee. They are not sure how seriously to take some of his pronouncements, but they're rattled by it, and for good reason.

[05:40:00] A lot of the proposals that he's made display either ignorance of world affairs, or a cavalier attitude, or an interest in getting tweets and headlines instead of actually thinking through what it is that is required to keep America safe, and secure, and prosperous and what's required to keep the world on an even keel.

With respect to the Democratic primary process, as I've said before, it's been my view to let this play out. Let voters make up their minds. And during primaries people get a little grumpy with each other. It's just the nature of the process.

You start off and everybody's thinking this is fine, this is going to be afriendly competition and we're going to trade ideas. And somebody says one thing and then another person says another thing and that was a little sharper than I expected. And somebody supporter pops off. There's a certain buildup of aggravation.

We saw that in my lengthy primary in 2008. This is no different. But, what I think is really important to remember is that unlike what you've seen in the Republican primary, for the most part there's not that big a difference ideologically in terms of the issues.

Both Hillary and Bernie believe that every American should have health care. Both of them think that we've got to make college more affordable. Both of them believe that it's important for us to have a tax system that is fair and that we should be closing corporate loopholes in order to pay for things like infrastructure investment and early childhood education.

If you put their proposals side by side they're all pointing in the same direction and the differences are primarily tactical. They had to do with how do you get some of this stuff done. So, that doesn't mean that those aren't serious questions to ask and debate.

It does mean, though, that once the primary process is resolved the ability for us to pull together around a common vision that is in sharp contrast to the vision that's being offered on the other side, I think, is one that will get done by the time of the convention.

I would urge, and have urged, both sides to try to stick to the issues because a lot that grumpiness arises where folks feel as if we're not talking about an issue, but we're talking about personalities and character.

And they're both good people. I know them both well and I think that it's important for us to try to end this in a way that leaves both sides feeling proud of what they've done. And both dies have run serious, competitive races and debated issues in a serious way, so I'm proud of Democrats for doing that.

And Carol, as you know -- I sure know because I've been through this a bunch of times -- there is just the natural impulse when you're having to report every day on campaigns that every little blip, speed bump, conflict, trash talking that takes place is elevated. Not to mention polls.

And the one thing I've learned after being around for a while is that kind of day-to-day choppiness is not indicative of longer-term trends. I feel confident about the Democratic vision for the country and I feel confident about our ability not to just win elections but, more importantly, to deliver on behalf of the American people on the issues they care about.

(CAROL): (INAUDIBLE) until the end of July make it harder to defeat Mr. Trump?

[05:45:00] OBAMA: No. Look, would it be nice if everybody was immediately unified and singing Kumbaya, and whoever the nominee ended up being could just take a nice two-week vacation and recharge.Absolutely. I guarantee you that the eventual nominee sure wishes it was over now because this is a grind. It's hard.

And in some ways -- one of the things I've always found is that it's a lot more draining arguing against your friends than it is arguing against your political opponents. It weighs on you more. Being criticized by folks who are in your own party always hurts just a little bit more.

And so, you know, it takes a little energy out of you but these are folks who are serious about trying to solve the country's problems. They're both veterans of the political grind and so they're going to hold up and by the time we get to the convention I'm confident they'll be in good shape.

As a special bonus, I'm going to take one more question. Go ahead.

UNIDENTIFIED MALE: Thank you, Mr. President. You mentioned some tactical differences between the two Democratic candidates but when you hear Bernie Sanders speak it seems like he's talking more about the issue of trustability and the need for political revolution.

And just yesterday we saw the State Department's inspector general put out a report about Sec. Clinton's emails and it basically undermined some of what she said about her email practices. I'm wondering if you think that undermines her trustworthiness with the American people and if you agree with Bernie Sanders that she should release the transcripts of her highly-paid speeches to Wall Street?

OBAMA: OK. You know what? I take it back. I'm not taking another question. (LAUGHTER) We're in Japan. Don't we have something in Asia that we want to talk about? I'll be talking about this in Washington the whole time.

Look, I've already said a lot about those issues. I think those are better directed to the campaign. As I said before, during the course of a primary people say what they think might help them get some votes.

And once the campaign is over then they move on and they make an assessment in terms of how they can make sure that the vision that they care most deeply about has the best chance of passing a Congress and getting signed by a president, and that Supreme Court nominees are confirmed. All the things that make for a functioning, effective government.

So, I think that the noise that is going on back and forth between candidates at this point -- if you want insights into how they're thinking about it, those should be directed to them.

I'll take -- you've already had a question, so if I'm going to ask another question I think it's fair to give it to her.

UNIDENTIFIED FEMALE: Can I ask you your thinking on the new Taliban leader and how that affects prospects for peace in the region?

OBAMA: Well, as I was saying to my team, I wasn't expecting a liberal Democrat to be the newly-appointed leader of the Taliban. So, this continues to be an organization that sees violence as a strategy for obtaining its goals and moving forward in Afghanistan.

We have a Democratic re-elected government in Afghanistan that we're supporting and our goal right now is to make sure that that constitution and that democratic process is upheld. Not to mention that we're able to maintain the counterterrorism platforms that we need in that region so that al Qaeda, and now ISIL, are not able to take root and use that as a basis to attack us in the United States.

My hope, although not my expectation, is that there comes a point at which the Taliban recognizes that they are not going to simply be able to overrun the country. And that what they need to be doing is to enter into serious reconciliation talks that are led by Afghans.

[05:50:00] And I think if that happens that's something that the United States and others in the world community would support. But, I am doubtful that that will be happening anytime soon and we'll have to wait and see how those things develop.

In the short term, we anticipate that the Taliban will continue to pursue an agenda of violence and defense and blowing up innocent people, and the kinds of actions that have characterized their approach over the last 15 to 20 years.

But, I do think that there will come a point, perhaps not this year or next year but eventually, where there are those within the community, that surrounds the Taliban at least, that recognize their goals are best achieved by negotiations. OK?

UNIDENTIFIED FEMALE: (INAUDIBLE).

UNIDENTIFIED MALE: Six fifty.

UNIDENTIFIED MALE: Right. Is that embarrassing that they couldn't --

OBAMA: To me, or to --

UNIDENTIFIED MALE: Yes, because --

OBAMA: Why was it embarrassing to me?

UNIDENTIFIED MALE: Well, because you invited these people and they didn't show up.

OBAMA: Well, you know, I wasn't the one who held them up. The -- look, I was very blunt with the Vietnamese government. There is so much good going on in that country and what I indicated to them is that these kinds of heavy-handed actions end up being entirelycounterproductive.

And the folks we invited, including those who were there, are people that are prepared to have a constructive conversation with the government about how to advance peace and prosperity, and economic development, and environmental security.

GEORGE HOWELL, CNN ANCHOR: Six fifty-two p.m. in Ise-Shima, Japan. You've been listening to President Obama at the G7 Summit, talking everything from terror, to trade, to the state of the U.S. election.

We'll have more on that later here on CNN. EARLY START continues after this.

[05:52:45]

(COMMERCIAL BREAK)

[05:57:00] ALISON KOSIK, CNN ANCHOR: Welcome back. Let's get an early start on your money. Dow futures pointing higher after a nice rally the past two days. Stock markets in Europe and Asia are mostly higher. Crude oil prices sitting just below $50 a barrel.

And crude oil, actually, making an impressive comeback. At this time last year oil was trading near $60 a barrel. Then prices crashed as supplies glut and fears about the health of the global economy cut prices in half. Crude oil hitting a low of $26.21 in February. Well, now prices have almost doubled but experts are saying they should stick right around $50 a barrel for the rest of the year.

So what does that mean for you? Well, higher gas prices, of course. The national average hitting $2.31 overnight. Still, less than a year ago, but even with the recent increase drivers are still going to see the cheapest Memorial Day weekend gas prices in more than 10 years. Good news before you hit the road.

HOWELL: It is. Hillary Clinton on the defense this morning about her email scandal. CNN's "NEW DAY" starts right now.

(BEGIN VIDEO CLIP)

DONALD TRUMP (R), PRESIDENTIAL CANDIDATE: Bernie would be easier to beat. If I debated him we would have such high ratings.

SEN. BERNIE SANDERS (I-VT), DEMOCRATIC PRESIDENTIAL CANDIDATE: We can win. Donald Trump is toast.

TRUMP: Crooked Hillary, crooked Hillary, she's as crooked as they come.

HILLARY CLINTON (D), PRESIDENTIAL CANDIDATE: He makes a habit of insulting women.

TRUMP: I was being hit by Pocahontas, Elizabeth Warren.

CLINTON: He seems to have something about women.

TRUMP: Inspector General's report, not good.

UNIDENTIFIED MALE: At the time that she took office the use of personal email was not disallowed.

UNIDENTIFIED MALE: As the secretary, she's supposed to abide by the rules.

CLINTON: It's not an issue that is going to affect the campaign.

UNIDENTIFIED FEMALE: Gunshots rang out backstage before rapper T.I. performed.

UNIDENTIFIED MALE: In the midst of the concert I heard two pops.

UNIDENTIFIED MALE: We have identified four gunshot victims.

UNIDENTIFIED FEMALE: They were running for their lives. I was terrified.

(END VIDEO CLIP) ANNOUNCER: This is NEW DAY with Chris Cuomo and Alisyn Camerota.

CHRIS CUOMO, CNN ANCHOR: Good morning. Welcome to your NEW DAY. It is Thursday, May 26th, 6:00 in the east. Alisyn and I are joined again by Ana Cabrera. It's good to have you, Ana.

ANA CABRERA, CNN ANCHOR: Happy Friday eve.

CUOMO: Up first, got big news this morning. A blistering report from the State Department's inspector general, claiming Hillary Clinton did violate email rules. Clinton continues to defend her use of a private server during her time as Secretary of State. Donald Trump pouncing on Clinton, saying she's as crooked as they come.

President Obama was asked about this at the G7 Summit, but he told reporters in Japan that world leaders are rattled by Trump.

ALISYN CAMEROTA, CNN ANCHOR: So, Trump went on "Late Night". He was talking on Jimmy Kimmel's show, where he said that he was willing to debate Bernie Sanders for charity. All of this, as we're learning more about a shakeup inside the Trump campaign. Trump firing a top aide who just came on board.

We have this 2016 race covered the way only CNN can, so let's begin with Joe Johns. He's live in Washington. Good morning, Joe.

JOE JOHNS, CNN SENIOR WASHINGTON CORRESPONDENT: Good morning, Alisyn. Hillary Clinton responding overnight to the latest development in the email controversy that has dogged her campaign since she got into the race, pointing out that that scathing inspector general's report that said she broke the rules while she was Secretary of State. That she should have surrendered all government-related emails when she left office.