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EARLY START

Trump Lays Out His Plan To Defeat ISIS; Democrats Slam Trump's Foreign Policy Qualifications; Photo Finish In Women's 400M Sprint; Michael Phelps Talks Future Plans; Investors Seem To Be Predicting A Clinton Win In November. Aired 5:30-6a ET

Aired August 16, 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] GEORGE HOWELL, CNN ANCHOR: Controversial proposals from Donald Trump as he lays out his plan for fighting ISIS. An ideology test and a commission on radical Islam, and that is just the start of it.

CHRISTINE ROMANS, CNN ANCHOR: The world's best-known Democrats taking their turns going after Trump. Hillary Clinton, President Obama, Vice President Biden, all scorching the Republican on terror and the economy.

HOWELL: And did you see this? It was a photo finish in Rio, two sprinters separated by a fraction of a second. Did the dive at the end across the finish line -- did it make a difference? That is the story of the day.

Welcome back to EARLY START, I'm George Howell.

ROMANS: And I'm Christine Romans. Nice to see you today, George.

HOWELL: It is good to be here.

ROMANS: It is 31 minutes, almost 32 minutes, past the hour. Donald Trump hoping to reboot his campaign this morning after that major speech laying out his plan to smash ISIS and safeguard the U.S. from Islamic terrorism. Trump promising a global clash against Islamic terror comparable to the Cold War.

He calls for testing the values of all would-be immigrants. Trump's vowed to keep Guantanamo Bay open, to launch a commission on radical Islam. He also slammed Hillary Clinton and President Obama. Without again calling them the founders of ISIS, he did blame the terror group's rise on their policy decisions.

(BEGIN VIDEO CLIP)

DONALD TRUMP (R), PRESIDENTIAL NOMINEE: We cannot let this evil continue nor can we let the hateful ideology of radical Islam, its oppression of women, gays, children, and non-believers, be allowed to reside or spread within our own countries. Any country which shares this goal will be our ally. We cannot always choose our friends but we can never fail to recognize our enemies. If I become president, the era of nation-building will be brought to a very swift and decisive end.

Hillary Clinton lacks the judgment -- as said by Bernie Sanders -- stability and temperament, and the moral character to lead our nation. She also lacks the mental and physical stamina to take on ISIS and all of the many adversaries we face.

(END VIDEO CLIP)

ROMANS: Democrats instantly jumped on Trump's speech. Clinton and Vice President Biden, they're campaigning together in Pennsylvania. The president taking time from his vacation, all slamming Trump in their own ways and in their own words. CNN's Sara Murray is with the Trump campaign in Ohio. She has the latest for us.

(BEGIN VIDEOTAPE)

SARA MURRAY, CNN POLITICS REPORTER: Good morning, Christine and George. Campaigning yesterday, right here in Ohio, Donald Trump said it's time to rewrite America's approach to foreign policy, saying it's time to end the practice of nation-building and, instead, focus our effort on fighting ISIS on all fronts. And Trump said to do that we need to partner with any ally who's willing to fight ISIS alongside of us.

Now, in the more controversial side of this speech he also unveiled a new set of immigration measures, essentially saying there should be an ideology test for immigrants coming to the U.S. to weed out anyone who might hold extremist views, whether those are anti-Semitic, anti-gay or anti-women.

TRUMP: We should only admit into this country those who share our values and respect our people. In the Cold War we had an ideological screening test. The time is overdue to develop a new screening test. I call it extreme vetting. I call it extreme, extreme vetting. Our country has enough problems, we don't need more. And these are problems like we've never had before.

[05:35:00] MURRAY: Now, Trump delivered this speech from Teleprompters and it was a rare moment for this unscripted candidate who was directly on message. But the question for Republicans, both in and outside of his campaign, is whether he can stick with that for the rest of the week. He'll be campaigning today in Wisconsin and we should have a better sense then. Back to you guys.

(END VIDEOTAPE)

HOWELL: Sara, thank you. The president's swipe at Trump came during a fundraiser for Hillary Clinton at Martha's Vineyard where he and his family have been vacationing. He mocked the Republican candidate without ever mentioning him by name, saying "You notice Ihaven't said much about her opponent. Frankly, I'm tired of talking about her opponent. I don't have to make the case against her opponent because every time he talks he makes the case against his own candidacy."

That dig came after Clinton and Vice President Biden tag-teamed the Republican nominee at a rally in Pennsylvania. Here's Clinton ripping into Trump's economic proposals -- listen.

(BEGIN VIDEO CLIP)

HILLARY CLINTON (D), PRESIDENTIAL NOMINEE: What's Trump's plan? Well, he laid it out last week. And I'll admit, even before he did, I didn't think it was going to be good for working Americans, but it turned out to be worse than I ever imagined. I know some of you may have friends up here in northeastern Pennsylvania who are thinking about voting for Trump. You know (booing) -- I know, I know. Friends should not let friends vote for Trump.

(END VIDEO CLIP)

HOWELL: A lot to talk about here with Hillary Clinton and with Donald Trump, a political battlefield this morning. Let's bring in reporter Eugene Scott, our politics reporter, to talk about it all.

ROMANS: Good morning.

EUGENE SCOTT, CNN POLITICS REPORTER: Good morning, guys.

HOWELL: Good morning. I want to start with this extreme vetting statement Donald Trump repeated during his speech. It sounds like a reality show, but what are the policies behind it? What does it mean?

SCOTT: Well, we don't know exactly, but what we do know is that a lot of Trump supporters are under the impression that there's a weak vetting process or no vetting process at all. If you recall, I believe, a couple of weeks ago, Trump said something like we're letting in people by the thousands without vetting them and that's not true.

After we were talking about this, this morning, I just went to a whitehouse.gov to see -- to learn more about the vetting process and the State Department, the FBI, the Department of Homeland Security all look into the backgrounds of people coming in before they are let in, so what Trump wants to add to that is not clear. I don't know what the definition of extreme for him is when it comes to this.

HOWELL: But there are a lot of people who would support that idea of stronger vetting.

SCOTT: Right, but what does stronger mean? And you want to ask those people, a lot of times, are they even aware of what's being done right now? I see a lot of times people are asking on social media. We need to ask him this and it appears that these are things that we're already asking.

ROMANS: I know a lot of people point to the Boston Marathon bombers, you know, those two brothers who were given asylum in this country. And they say look, even through the asylum process we fail to find a potential problem in our midst. And they look at real examples --

SCOTT: For sure.

ROMANS: -- but those domestic, sort of homegrown -- SCOTT: Sure, sure.

ROMANS: Those two guys grew up in this country after coming here with their family. Did he address domestic issues of homegrown radical Islam and terror?

SCOTT: It didn't seem so. And along those lines, what leaves people wanting to know more is how do you vet for someone who comes over here and passes your initial process but somehow gets radicalized in the process? You can't really vet that. You can't really prevent and tell what someone will believe and do years in advance after coming to the States.

ROMANS: Let me ask you -- I want to ask you about something he said about mental and physical stamina.

SCOTT: Sure.

ROMANS: He made that -- he talked about the mental and physical stamina of Hillary Clinton. That she doesn't have -- what did that mean, do you think, because a lot of people are wondering is he talking about her gender, is he talking about her health, is he talk -- what was he talking about? What does that mean?

SCOTT: I think it buys into or feeds into the idea that Donald Trump is the strongest candidate who is able to tackle ISIS way better than Hillary Clinton. Last week I tweeted out a story about Hillary Clinton was releasing her tax returns with the hope that he would release his. And most of the pushback I got wasn't asking for a release of her speeches, but people wanted her to release her medical records because the thought was that Trump had released his, but that's not quite what he did. He had a statement from a doctor saying that he --

ROMANS: That said he's the strongest person --

SCOTT: The strongest person.

ROMANS: -- ever to run for president.

SCOTT: Yes, and even if you have the physical strength to run for president, it's not clear how that helps you defeat ISIS.

HOWELL: But it was a statement and not the records.

SCOTT: It wasn't. We don't know who's the strongest of these two candidates but I'm not sure voters care about that most. I think voters want to know who is going to be the best in tackling what we are seeing with this terrorism.

HOWELL: The Clinton campaign also pushing forward on the notion that Trump does not have the mental stability to be president. Let's listen to what Vice President Joe Biden had to say on the campaign trail about the nuclear codes.

SCOTT: Yes. (BEGIN VIDEO CLIP)

JOSEPH BIDEN, VICE PRESIDENT OF THE UNITED STATES: There's a guy that follows me, right back here, has the nuclear codes. So if God forbid, anything ever happened to the president and I had to make a decision, the codes are with the -- he is not qualified to know the code. He can't be trusted. This guy doesn't care about the middle-class and I don't even blame him, in a sense, because he doesn't understand it. He doesn't have a clue. No, no, he really -- I mean, he really doesn't. He doesn't have a clue.

[05:40:00] ROMANS: The guy with the codes is like shh, Joe, shh.

HOWELL: Just leave me out of this, right? You know, looking at the actual argument, is it resonating with voters?

SCOTT: I think so and one could easily dismiss this as a partisan attack. But if you remember, in the last couple of weeks, quite a few Republicans who were really experts on foreign policy issues have come out and said we're not sure that Donald Trump -- or, in fact, we are sure that Donald Trump is not the best person to be left with this type of power and this type of control. It takes not only wisdom and insight but some temperament and some caution in terms of moving forward with how best to respond to a difficult situation.

HOWELL: We're seeing these military experts and high-level Republicans that are moving away from Trump, moving toward Hillary because of that very issue.

SCOTT: I think so. And I think it's also -- I mean, yesterday we saw a lot of attacks or like coded attacks at Trump from Clinton and Biden and President Obama which we hadn't seen in a while. But one of the reasons why I think we hadn't seen that in a while is because they were letting Republicans attack him for the last couple of weeks, which is what we've seen a lot of.

ROMANS: All right, Eugene Scott, thank you so much. Nice to see you.

SCOTT: Thank you, guys.

ROMANS: It's actually a great segue way because when you look at the markets, record highs in the markets, in part because the markets are expecting that Hillary Clinton might have an edge here. The major stock market averages have never been higher. The Dow is now up almost seven percent this year, big rallies all around. You know, you haven't had all the major averages hitting highs since 1999.

And now, Warren Buffett's firm is doubling down on Apple stock. A lot of aggressive pre-trading in Apple happening right. Berkshire Hathaway now owns 15.2 million shares of Apple. That's worth about $1.5 billion.

Regulatory filings show the company bought 9.8 million of those shares in the first quarter. Well, the first quarter, that was bad timing. Apple slumped after reporting two straight quarters of declining iPhone sales but then the stock has bounced back. Berkshire Hathaway usually stays away from tech stocks. Buffett says his deputies made that call.

Also in the filing, it cut its stake in Wal-Mart by about half. Wal- Mart, one of the best performing stocks in the Dow 30 this year. Look at that, a near 20 percent gain. That's remarkable you guys. Look at how much some of these stocks have done. Drug giant Merck, United Health Care, Caterpillar -- they're the only stocks in the Dow that are outperforming Wal-Mart.

Those stocks helped the Dow hit a record high yesterday. Records all around, folks. The Nasdaq, the S&P 500 also hit records. Futures down slightly this morning but you've got records all around for a variety of reasons -- strong jobs growth. The U.S. looks better than a lot of other places for investing right now. And again, there's this theory in the markets that they could live with a Hillary Clinton presidency more than they could live with a Donald Trump uncertainty, and that's at least where they're betting right now.

HOWELL: It is interesting, though, to see the markets already weighing in on this.

ROMANS: Oh, yes.

HOWELL: We're following a situation in Louisiana, the death toll there rising after devastating floods. The very latest on what's ahead for that region as EARLY START continues.

(COMMERCIAL BREAK)

[05:47:25] ROMANS: A suspected arsonist arrested in connection with raging Clayton fire in Northern California. Forty-year-old Damin Anthony Pashilk is facing 17 counts of arson for allegedly starting several fires in the Lake County area over the past year, including the Clayton fire which is only five percent contained this morning. It's already destroyed more than 175 homes and structures with 1,500 more threatened.

HOWELL: The death toll and the flood waters are on the rise in Louisiana. Nine fatalities now confirmed with thousands of people forced to evacuate their homes. As Baton Rouge police confirm, a firefighter was shot accidentally by another firefighter during the flood response effort on Monday. No word at this point on his condition this morning.

There is a lot to talk about in the world of politics. Let's check in with our own Chris Cuomo, the one and only there, with what's coming up on "NEW DAY" -- Chris.

CHRIS CUOMO, CNN ANCHOR, "NEW DAY": How are you, my friends? It's good to see you this morning. We do now know the content of Donald Trump's plan to defeat ISIS. The question is will the plan work? How can we figure that out? We've got retired generals, we've got campaign experts. "NEW DAY" will break down the details. They will compare and contrast his plan, Mr. Trump's, with Hillary Clinton's.

We're also going to look at a different part of the election phenomenon, which is what does the person at the top do to all the races below them? What they call down-ballot. We have New Hampshire Sen. Kelly Ayotte talking with us about what their concerns are in the Republican Party about Donald Trump's impact on them. Manu Raju got a great interview out of it so you'll get that. A little bit of a look ahead to the concerns about November. We've got that and all the headlines from around the world.

ROMANS: All right, we'll see you in a few minutes. Thanks, Chris.

HOWELL: Great. Thanks, Chris.

ROMANS: All right, for the first time since 1999, the three major stock market averages all setting record highs. The stock market on fire here but what happens next? That's what's important.

HOWELL: Always a good question.

ROMANS: We'll get an early start on your money, next.

(COMMERCIAL BREAK)

[05:53:30] HOWELL: At the Olympic Games it was an incredible photo finish in the 400-meter sprint on the women's side, a nail-biter between the Bahama's Shaunae Miller and American Allyson Felix. CNN's Coy Wire is live in Rio with exactly how the winner managed to cross that finish line and take the gold -- Coy.

COY WIRE, CNN SPORTS CORRESPONDENT: George, what a finish in that 400-meter final. Everyone in the stadium or watching on T.V. had no idea who had won. Shaunae Miller of the Bahamas had a huge lead but the defending world champ, Allyson Felix, dug deep. She would end up leaning in at the line but Shaunae Miller does a feet don't fail me now, diving across the line, and it worked. Gold by seven one- hundredths of a second.

But with that silver, Allyson Felix earns her seventh all-time medal and surpasses the great Jackie Joyner-Kersee to become the most decorated American female track athlete ever.

Guys, this just in. Simone Biles is human. She is, she really is. After three straight golds here in Rio, a bronze in the beam competition. She nearly fell off the beam and had to use her hands to catch herself. Judges score that as a fall, so bronze it is. She could still end up with gold in the final tonight -- on the floor final, that is. But congrats to young Laurie Hernandez, too, Biles 16-year-old teammate who finished with a silver in the beam event.

All right, let's get an early start on the medal count, like Christine Romans' early start on your money. We've got Team USA, 75 overall. China's in second with 46, and Great Britain in third with 41.

[05:55:00] Now, guys, last night I got a chance to catch up with Michael Phelps and I had to ask him what's next for the GOAT, the greatest Olympian of all time.

(BEGIN VIDEO CLIP) MICHAEL PHELPS, 28 CAREER GOLD MEDALS: I think first, I get to go home for a couple of days and relax and just enjoy some sun and get to see the pups. I'm happy now and I think that's the biggest difference between now and 2012. You know, in 2012, I think I just wanted to be done. I wanted nothing to do with the sport anymore. And now I'm very happy, very pleased with the place that I'm in and I'm happy with how I finished my career.

(END VIDEO CLIP)

WIRE: Guys, it was great to see Michael Phelps out and enjoying his 28 career Olympic medals. We'll also get to enjoy Usain Bolt today, a 200-meter heat that he'll be racing in. It's been a fortunate experience to be able to watch two of the greatest of all time in these games.

HOWELL: Coy, I saw that picture that you took with Phelps that you put out on Twitter. That's a picture you hold onto, man. It's very cool.

WIRE: Thanks, George, I appreciate. I had to keep that man covered from the rain.

ROMANS: I know. I tell you, it's a Coy Wire, my job does not suck day, you know? All right, thanks. Nice to see you, Coy. All right, let's get an early start on your money this morning. It's a trifecta for stocks -- record highs. Yes, folks, stocks have never been higher.

The Dow, the Nasdaq, the S&P 500 blazing into unchartered territory, a synchronized gold medal for these three average. All three now posting strong gains for the year. The Nasdaq has had the most impressive rally, frankly, from its low back in February. It's up more than, I think, 20 percent from that low. This has been a classic broad-based rally.

I want to show you the top performing sectors in the S&P 500. Telecom, 19 percent; utilities, 15 percent; energy, 14 percent; materials, 11 percent. So can anything stop this bull market? Some investors are growing nervous that prices are inflated.

Remember, the last time these markets all hit highs together was in 1999. Remember what happened after that? A bubble burst. There is also political risk. Wall Street seems to be betting that Hillary Clinton will win the election. If the polls swing toward Trump stocks may swing as well, so there's always that.

Right now, Dow futures slightly lower. Stock markets in Europe and Asia down a little bit, taking a step back from all those records. Oil down about six-tenths of one percent.

Two health care headlines to tell you about this morning. Aetna is dropping Obama care coverage in 11 of the 15 states it services. Next year, it will only sell Affordable Care Act products in Delaware, Iowa, Nebraska, and Virginia. Aetna has lost some $430 million since the exchanges opened in January 2014 because they people who sign up, they found, are sicker and more costly than expected.

And a new report this morning from Fidelity shows the average American will need $260,000 for health care costs when they retire -- the average American couple. It projects that cost will jump between four percent and six percent annually in future years. Something to think of. That's outside of savings in your 401(k). Those are health care costs in retirement for a couple -- a quarter of a million dollars, more than that.

HOWELL: When people hear that, though, does that make them feel like they can't do it or --

ROMANS: You know what? I'll tell you what, a lot of people see numbers like that and they just say I can't make the paycheck stretch as long as the month right now --

HOWELL: Right.

ROMANS: -- how am I supposed to save? It reminds people that health care is one of the fastest-growing costs in your retirement formula.

HOWELL: And nice reference to the Olympics there --

ROMANS: Yes.

HOWELL: -- in your financial report. Quick criticism and scrutiny for Donald Trump as he outlines his plan to fight ISIS. The Democrats are responding. "NEW DAY" picks up the coverage right now.

(BEGIN VIDEO CLIP)

TRUMP: We cannot let this evil continue. ISIS is on the loose.

CLINTON: Donald's been all over the place on ISIS.

RUDY GIUILIANI, FORMER MAYOR, NEW YORK CITY: Donald Trump has the intellect and the strength to confront our enemies.

BIDEN: He is not qualified to know the code.

TRUMP: Hillary Clinton lacks the judgment to lead our nation.

ALLYSON FELIX, OLYMPIC TRACK AND FIELD ATHLETE: I'm going to go out there and run with heart.

UNIDENTIFIED FEMALE: Allyson Felix came up just short of a fifth Olympic gold medal.

ROMANS: Breakout star Simone Biles takes bronze on the beam.

PHELPS: I am definitely very happy I came back for one more.

UNIDENTIFIED MALE: It's as high as I've ever seen it.

ALISYN CAMEROTA, CNN HOST: Historic deadly flooding in Louisiana.

UNIDENTIFIED FEMALE: His car is under the water.

UNIDENTIFIED MALE: It is still very, very dangerous. We still have waters rising.

(END VIDEO CLIP)

ANNOUNCER: This is NEW DAY with Chris Cuomo and Alisyn Camerota.

CAMEROTA: Good morning, everyone, welcome to your NEW DAY. It's Tuesday, August 16th, 6:00 in the East. Up first, Donald Trump calling for extreme vetting of immigrants trying to come to the U.S. He talked about making them pass an ideological test.

CUOMO: Trump also trying to clean up his case against the president and Hillary Clinton for the rise of ISIS. No more talk about founding, now it is about policy choices. Vice President Joe Biden taking on that accusation. He and Clinton made their own new case for what Trump could mean for national security.

We have every angle covered for you. Let's begin with Athena Jones, live in Washington with more. Good morning, Athena.

ATHENA JONES, CNN CORRESPONDENT: Good morning, Chris.