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STATE OF THE UNION

Interview With Presidential Candidate Hillary Clinton; Interview With Vermont Senator Bernie Sanders; Interview With Presidential Candidate Donald Trump. Aired 9-10a ET

Aired January 17, 2016 - 09:00   ET

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


[09:00:05]

(BEGIN VIDEOTAPE)

JAKE TAPPER, CNN ANCHOR (voice-over): Back to back. Hillary Clinton and Bernie Sanders are both here just hours before they face off at the debate.

SEN. BERNIE SANDERS (I-VT), DEMOCRATIC PRESIDENTIAL CANDIDATE: Secretary Clinton and her campaign now know that she's in serious trouble.

TAPPER: The race tightens with the first votes just days away.

HILLARY CLINTON (D), PRESIDENTIAL CANDIDATE: Senator Sanders has some very big ideas, but he hasn't yet told anybody how he would pay for them.

TAPPER: Could Clinton lose Iowa again?

CLINTON: I know it's make-or-break time.

TAPPER: Both Democratic candidates will be here in minutes.

Plus, Republican front-runner Donald Trump. The gloves are off, as he and Ted Cruz battle for Iowa.

DONALD TRUMP (R), PRESIDENTIAL CANDIDATE: I guess the bromance is over.

TAPPER: Now Trump takes on Cruz's character.

TRUMP: He came on very strident and not a nice person.

TAPPER: And Cruz's ties to Goldman Sachs.

TRUMP: They loaned him a million dollars, so they certainly have control of him.

One on one on the road, as we count down to Iowa.

(END VIDEOTAPE)

TAPPER: Hello. I'm Jake Tapper in Washington, where the state of our union is jam-packed.

We're only two weeks and one day away the from the Iowa caucuses. And, on today's show, you will hear from the major players on both sides of the presidential race, Hillary Clinton, Bernie Sanders, and Donald Trump, all coming up.

In just hours, the Democratic candidates are going to face each other down at their debate in Charleston, South Carolina.

And they have plenty of new material, with Clinton and Sanders both lobbing fresh lines of attack against the other this week.

Meanwhile, breaking news this morning: a senior administration official telling CNN that the plane carrying three of the previously detained Americans freed by Iran yesterday has taken off from Tehran.

The men released as part of a swap with Iran include "Washington Post" journalist Jason Rezaian, Marine veteran Amir Hekmati, and Christian pastor Saeed Abedini. They are expected to spend a couple of days at a U.S. military hospital in Germany for medical evaluation before coming home.

A fourth American was not on the plane. He decided to stay in Iran following his release. This deal comes after more than a year of secret negotiations accelerated by President Obama's controversial nuclear deal with Iran.

Yesterday, international economic sanctions were lifted on Iran, after the United Nations declared that Iran had dismantled large parts of its nuclear program.

(BEGIN VIDEO CLIP)

JOHN KERRY, U.S. SECRETARY OF STATE: Iran has taken significant steps that many -- and I do mean many -- people doubted would ever come to pass.

(END VIDEO CLIP)

TAPPER: Lots to talk about this morning.

We're joined right off the bat by Democratic candidate for president and former Secretary of State Hillary Clinton.

(BEGIN VIDEOTAPE)

TAPPER: Madam Secretary, thanks so much for joining us.

On Saturday, you called for new sanctions against Iran for its ballistic missile program. That prompted a response from another American who was once held prisoner in Iran, Shane Bauer, one of the hikers released in 2011. He had some tough words for you on Twitter, writing -- quote -- "Seriously, why would Hillary call for more sanctions now? As far as we know, four of the Americans are still in Iran. Totally irresponsible" -- unquote. He also said, whenever he was in Iran, whenever he heard your voice, his heart would sink, because -- quote -- "All she ever does with Iran is inflame tensions."

I want to give you awe chance to respond.

CLINTON: Well, look, I appreciate what he went through when he was held prisoner in the infamous Iranian prison.

And we were very happy that we were able to get him and the two other hikers back home. But we have a very clear path we are pursuing with Iran. I am pleased that we do have an agreement that is being implemented. And I was part of putting that in place by getting the sanctions imposed on Iran that the entire world went along with.

But we also have made it clear from the beginning that their missile activity is still subject to sanction. That is part of the overall approach that the administration has taken toward Iran, and that I support.

So, when we became aware of missile activity that is under U.N. supervision and is prohibited, it would be a mistake not to make clear to Iran that we are very, very happy to see us implementing the agreement to put a lid on the nuclear weapons program and the way that they have complied, but that doesn't mean they can now go off and invest and test a lot of missiles that would eventually be able to be intercontinental that could reach the United States and maybe carry a very dangerous weapon.

So, I think there might be a misunderstanding of what our whole agreement consists of, because, certainly, I have made clear I'm proud of the role that I played in getting that agreement in place, but, as president, I will enforce it.

[09:05:08]

And there have to be consequences if Iran veers away from what it has agreed to or what it has been mandated to do or prohibited from doing by the international community.

TAPPER: Let's turn to politics, obviously a big night tonight, a Democratic debate.

You will be facing off with Bernie Sanders in this new, more contentious phase of the election, with just a week and a -- two weeks and a day until the Iowa caucuses.

One of your top allies, David Brock, is calling on Bernie Sanders to release his medical records. The Sanders campaign -- campaign manager, Jeff Weaver, he called this -- quote -- "one of the most desperate and vile attacks imaginable."

Who's right there, David Brock or Jeff Weaver?

(LAUGHTER)

CLINTON: Well, I don't know anything about it, but I have released my medical records.

And I remember being asked frequently for me to do so. And, so, obviously that's, you know, something I will leave up to the Sanders campaign.

But this is a spirited debate, because, although we share some very similar goals for our country, we have differences. And Senator Sanders has been pointing them out.

One of my biggest differences has been on guns. And I'm very pleased that he flip-flopped on the immunity legislation. Now I hope he will flip-flop on what we call the Charleston loophole, and join legislation to close that, because it's been a key argument of my campaign that we Democrats, in fact, Americans need to stand up to the gun lobby and pass comprehensive commonsense gun measures that will make America safer. And that's what I intend to do.

TAPPER: One of your major lines of attack against Bernie Sanders, in addition to the gun one that you just leveled, has been on his proposal for single-payer health care.

Back in 1994, you said a single-payer system administrated by the states would actually lower health care costs. Take a listen.

(BEGIN VIDEO CLIP, 1994)

CLINTON: Single-payer would have lower costs. And one of the reasons that the president has a provision in his approach that guarantees states can go single-payer is to permit states that are able to do that to start down the single-payer road.

(END VIDEO CLIP)

TAPPER: Now, I know that was a long time ago, but you said in the Q&A single-payer would not be politically feasible.

In a perfect world, do you believe that single-payer would ultimately lower health care costs?

CLINTON: Well, I believe in universal health care. And I think we have now, finally, after many decades of efforts, thanks to President Obama, a plan that will get us to universal health care. It's the Affordable Care Act.

So, I'm not interested in what the Republicans are trying to do, which is to repeal it, as they consistently vote to do. And I also think it would be a mistake to really thrust our country into another contentious national debate about how we're going to provide quality, affordable health care to everybody. So, I'm...

TAPPER: Right, but just on the merits.

CLINTON: ... very focused on -- well, the merits are we need to get to universal health care. That is the merit.

The merit is, how do we get to universal health care, where everybody's covered, where everybody can afford it? We have had some experimentation with states. Actually, Vermont tried to do single- payer. They found that the cost and the taxes that were required were prohibitive.

Colorado now has a referendum on its ballot, so it's going to also pursue it. I'm a big believer in letting states experiment. But when it comes to where we are right now, in 2016, I'm going to defend, protect, and improve the Affordable Care Act.

TAPPER: For years, you have been very protective of your daughter, Chelsea Clinton, especially when she was a child, of course, and now she's a grown woman.

This week, she surprised a lot of people when she unleashed one of the most scathing attacks of the cycle, accusing Bernie Sanders of wanting to empower Republican governors who might then cut people's health care.

PolitiFact called Chelsea's remarks mostly false. Former Obama adviser David Axelrod said it was not an honest attack. And liberal columnist Mark Shields said the attack turned your daughter into a -- quote -- "political hack."

Do you think it was a mistake to muddy up Chelsea like that?

CLINTON: Look, she was asked a question. I love my daughter. And she answered a question.

And all I can say, Jake, is that the only health plan we know of from Senator Sanders is what's described in the legislation that he has introduced nine times in the Congress, in the Senate. And it does turn all of the programs we know of that provide health care over to the states.

The federal government would provide a big portion of the cost, but states would be mandated to also pay considerably, about 14 percent of the cost. That's what's in his bill.

[09:10:04]

So, I think anyone who wants to compare and contrast, since we don't have any more current plan from Senator Sanders, has to look at the legislation that he introduced.

And, yes, if it were going to be state-run, then governors, Republican and Democrat alike, would bear responsibility for appropriating the funds and administrating it, according to Senator Sanders' own legislative proposals.

TAPPER: So, no regrets about using Chelsea that way?

CLINTON: Oh, I didn't use her. She answered a question.

And, you know, she gave a factual answer, based on the legislation that is the only way we know what Senator Sanders is actually proposing, because he introduced it nine times in the Congress. TAPPER: OK. PolitiFact said it was mostly false, but let's move on.

A new movie opened this weekend. It's called "13 Hours: The Secret Soldiers of Benghazi." It's a cinematic version of a book, a nonfiction book, telling the story of the six private security contractors who defended the U.S. Consulate in Benghazi, Libya, from an attack by Islamic militants.

Are you planning to see it at all?

CLINTON: I'm just too busy campaigning. I am still very focused on making sure we do everything we can, as I did when I was secretary of state, as I testified to over 11 hours, to make sure that nothing like that happens again, insofar as we are able to prevent it.

And that's my focus when it comes to the continuing obligation that the United States government has whenever we send anyone into harm's way.

TAPPER: Let's talk about ISIS. It's a big concern among many Americans.

I know that you're very reluctant to criticize President Obama, and I understand that. But I want to ask you about the situation in Syria on the ground, because Anne-Marie Slaughter, who is the former director of policy planning at the State Department under you, she told me on my show "THE LEAD that, if President Obama had listened to you about arming the Syrian moderates years ago, there's a -- quote -- "very good chance that we would not be facing ISIS like we are now."

Do you agree?

CLINTON: Well, we will never know the answer to that question.

Obviously, I thought, at the time, it was the right approach. And I advocated for it, along with then Secretary Panetta and CIA Director Petraeus, because I was worried about what would happen if there were a very vicious civil war, when, on one side, you had Assad's army backed by Iran, and now we know also backed by Russia, against a group of people who wanted more freedom, wanted to live in dignity, not the continuing oppression from the Assad regime, that it would be a pretty uneven match, to be understating that, and it could open territory for terrorist groups, foreign fighters, and others to come in.

So, let's talk about where we are now. And I have laid out a plan to deal with ISIS about airpower that is being used now, with more nations joining the United States, which is in the lead, to try to go after ISIS leadership, infrastructure, other assets, also to support Iraqi and Syrian fighters who are on the ground trying to take territory back from ISIS, and what else we need to do to build up those forces, the Iraqi army, which has had some success taking back Ramadi, Sunni tribal fighters, which we have to get back into the fight, and that is beginning to happen, and supporting the Kurdish fighters, who have been extraordinary brave on both sides of the border, by helping to equip and support them. So, we have a clear mission to deprive ISIS of territory. And there

is some movement, positive movement on that. And then we have to cut off their foreign fighters, their foreign funding, and take them online -- take them on online, so that they are no longer able to recruit and propagandize, which keeps their flow of fighters and money coming.

TAPPER: I'm told we're out of time. I just have one last question for you.

In terms of the status of the FBI investigation into your private e- mail server, have you been interviewed by the FBI yet?

CLINTON: No.

TAPPER: You haven't.

All right, Secretary Clinton, thanks so much. Really appreciate your time. Good luck with the debate tonight.

CLINTON: Thanks. Thanks, Jake.

(END VIDEOTAPE)

TAPPER: And we will be back with more on this quickly tightening race between Hillary Clinton and Bernie Sanders.

Senator Bernie Sanders will join us live next.

(COMMERCIAL BREAK)

[09:15:03]

TAPPER: Welcome back to STATE OF THE UNION.

Just hours before his next face-off with Secretary of State -- former Secretary of State Hillary Clinton at tonight's debate, they are sharpening their attacks on one another.

This morning, a key Clinton ally is calling for Senator Sanders to release his medical records. That's a move the Sanders campaign called vile and desperate.

How is this all going to play out tonight?

Joining me now is Democratic candidate for president and Vermont Senator Bernie Sanders.

Thanks for joining us, Senator Sanders.

Let's start with this call from David Brock, this Clinton ally, for you to release your medical records. Why does your campaign consider this vile and desperate?

SANDERS: Well, first of all, David Brock is not a Clinton ally. He's head of their super PAC, the super PAC that receives millions of dollars from very wealthy people and special interests.

Second of all, of course we're going to release our medical records. Thank God, I am very healthy. We will get our medical records out the same way that Secretary Clinton has gotten her records out. It is not a problem.

[09:20:03]

TAPPER: You and I are old enough to remember when Hillary Clinton was very protective of Chelsea Clinton. She's been involved in past Clinton campaigns.

But we have never seen her used to attack a Clinton opponent until this week, when she went after your health care plan.

I know that you respect Chelsea Clinton and that you believe she's just flat wrong to suggest your plan would take away people's health care and that she hasn't read it, but were you surprised that Chelsea Clinton was deployed in that way?

SANDERS: I was.

I mean, Chelsea Clinton is a very, very smart and capable young woman. I'm sure she loves her mother and she's trying to do everything she can to make sure her mom wins. That's pretty natural. I have got four kids, seven grandchildren. They're rooting for me.

But I was a little disappointed that what Chelsea said was simply not accurate. The issue that she was raising is that, in Republican conservative states, a Medicare-for-all bill would not be implemented. That's not accurate.

If a state does not go forward, under my 2013 legislation, the federal government steps in. Bottom line here, Jake, is the United States is the only major country on Earth does not guarantee health care to all people, and yet we spend much, much more per capita on health care than do the people of other countries.

And we still have 29 million people uninsured and many more underinsured. So, yes, I will continue the vision of FDR, of Harry Truman. I believe health care is a right for all people. It will be politically difficult to achieve, but I will maintain that vision and fight for it. That's the goal I want to see.

TAPPER: And Hillary Clinton and her campaign keep going after you for it.

In response, you tweeted a photograph this week of you and Hillary Clinton in 1993 in which she thanked you for your commitment to -- quote -- "real access to health care for all Americans" -- unquote.

Is this your way of suggesting that Clinton's attacks today, as opposed to back then, that today's attacks are phony and insincere?

SANDERS: Well, the reason that we did that is what Secretary Clinton understands, is that I have, throughout my political life, believed that all Americans are entitled to health care.

And when her campaign attacks me as saying Sanders wants to dismember all of the health care plans that are out there, the ACA and the other plans, and leave millions of people uninsured, that is obviously not true. She has always done -- I have known Hillary Clinton for 25 years.

We -- I, you know, have a lot of respect for her. But her campaign should not be suggesting that my ideas will leave millions of people without health insurance. In fact, the opposite is true. What I want to do is to make sure that every man, woman, and child in this country has health care.

I believe, Jake, we can do it in a much more cost-effective way than is currently the case. We are spending almost three times more than the British, 50 percent more than the French on health care per capita. They provide health care to all people. We can do a lot better.

TAPPER: So, let's talk about the single-payer health care plan proposal.

You said on this program on January 3 that you would release a plan on how to pay for it before the Iowa caucuses. You repeated that pledge on the night of the State of the Union address. We're now just two weeks and one day away. Are you prepared to release those health care details today?

SANDERS: Yes, as I said we would do it. And we will do that.

And here's the point that has to be made. My plan will save middle- class families thousands of dollars a year on their health care costs. We will not continue to see the drug campaigns in this country rip off the American people.

Last year, Jake, the three top drug companies in America made $45 billion in profits, while seniors can't afford the medicine they desperately need.

TAPPER: When...

SANDERS: That's pretty crazy stuff. We will deal with that.

TAPPER: When are we going to see these -- these -- the bottom line, how people -- how you're going to pay for this? When are we going to see those details?

SANDERS: Very shortly, very -- look, as you well know, I mean, I introduced in 2013 comprehensive legislation.

I think it was 150 pages. It's complicated stuff. But we said we will get it out, and we will get it out. In fact, we're going to get it out very shortly.

TAPPER: I guess the reason it's a point of contention is because you said in December that the only taxes you would raise on the middle class if you became president would be to fund your paid leave plan.

But when you have released single-payer health care plans in the past or advocated for them, they did include taxes that would hit the middle class, not because you wanted to, but because they were necessary to pay for it.

SANDERS: Well, if you consider a Medicare premium as a tax, you know, that's true. Health care is expensive.

But what we are doing -- and this is a point -- and it bothers me a little bit. Republicans often make this attack. And I'm hearing too much of it from the Clinton camp. We are eliminating private health insurance premiums.

[09:25:03]

You're not going to have to pay any. So, yes, Medicare premiums will, in fact, be there for all people. But, at the end of the day, the middle-class family, getting rid of all private health insurance premiums will save thousands of dollars a year in their health care costs. And I think most people will be appreciative.

The other point I want to make here, Jake, is, you know, the vision that we're fighting for here is one that went back to FDR, to Harry Truman. If Hillary Clinton were to say, look, this is a tough political fight, I agree with her. I'm not saying you're going to get this done the first two days of my presidency.

But I think we can rally the American people around two principles: Health care should be a right of all people. We should not be paying far more per capita than other countries on health care.

And that's the fight I'm prepared to wage.

TAPPER: Let's turn to this issue of guns.

When you were on this program last July, I asked you about your vote in 2005 to shield gun manufacturers from lawsuits. You defended that vote. Take a listen.

(BEGIN VIDEO CLIP, JULY 5, 2015)

SANDERS: If somebody has a gun, and it falls into the hands of a murderer, and that murderer kills somebody with the gun, do you hold the gun manufacturer responsible? Not anymore than you would hold a hammer company responsible if somebody beats somebody over the head with a hammer. That is not what a lawsuit should be about.

(END VIDEO CLIP)

TAPPER: But now, sir, you seem to want to amend that law and take away the immunity. Hillary Clinton just said that you flip-flopped.

SANDERS: Well, what I said -- look, let me start this by saying, Jake, you know, I resent very much Clinton camp saying I'm in the NRA lobby. I have a D-minus -- that's a D, like in David -- D-minus voting record

from the NRA. I likely lost an election, statewide election in 1988 because I was the only candidate running for Congress who said, you know what, military-style assault weapons should not be sold in America.

I have always believed in a strong instant background check and doing away with the gun show loophole, which the president is now trying to do.

(CROSSTALK)

TAPPER: Right, but the issue is the -- but the issue is the immunity.

SANDERS: But in terms of this -- right.

What I said, Jake, is that there were provisions in that legislation ending armor-piercing ammunition, making sure that we had safety locks for kids in that bill. That made sense to me. There were provisions in it -- and I have said this months ago -- that did not make sense to me.

If, for example, a manufacturer understands that he is selling guns to an area that are being distributed to criminals, of course that manufacturer should be held liable.

So, there is new legislation that has now been -- I think is going to be introduced, and I am supportive of that. But this is a position that I have had for several months.

TAPPER: All right, Senator Bernie Sanders, thank you so much for your time. Good luck tonight, sir.

SANDERS: Thank you very much.

TAPPER: Coming up: The Republican race in Iowa is coming down to Donald Trump and Ted Cruz, and the gloves are off, but could Trump's attacks backfire?

We will be face-to-face with the front-runner on the road in Iowa next.

(COMMERCIAL BREAK)

[09:32:33]

TAPPER: Welcome back to STATE OF THE UNION. I'm Jake Tapper.

The battle for the hearts and minds of Iowa, Republicans is shaping up right now to be a two man race between national frontrunner Donald Trump and Tea Party favorite Senator Ted Cruz. The two initially refused to go after each other on the campaign trail. That lasted for months until Cruz caught up with Trump in the polls in Iowa. And now Cruz says his (INAUDILBE) poll numbers are making Donald Trump very nervous.

(BEGIN VIDEO CLIP)

SEN. TED CRUZ (R-TX), PRESIDENTIAL CANDIDATE: I think in terms of a commander and chief we ought to have someone who isn't springing out of bed to tweet in a frantic response to the latest polls.

(END VIDEO CLIP)

TAPPER: With the Iowa caucuses now just 15 days away I sat down with Mr. Trump in the Hawkeye State.

(BEGIN VIDEOTAPE)

TAPPER: Mr. Trump, thank you so much for joining us.

TRUMP: Thank you.

TAPPER: We really appreciate it.

Let's talk about the race here in Iowa. It's getting really, really competitive. Very neck and neck between you and Cruz.

There's an entity called Central Marketing Incorporated, it's polling people in Iowa and asking them about different attack lines against you.

(CROSSTALK)

TRUMP: ... Ted Cruz. (INAUDIBLE) shouldn't be doing that.

TAPPER: He shouldn't be doing it. We don't know -- I don't know for a fact that it's Ted Cruz --

TRUMP: (INAUDIBLE) if you look at his answer because somebody asked him we (ph) think it's you and he went, oh well, uh -- believe me after I saw that I said, it's him. He shouldn't be doing that. Very unethical.

TAPPER: Well, let me ask you because one of the potential attack lines has to do with an answer you gave to Frank Luntz months ago when you said that you've never asked God for forgiveness.

Do you regret making that remark?

TRUMP: No, I have great relationship with God. I have great relationship with the evangelicals. In fact nationwide, I'm up by a lot -- leading everybody. But I like to be good. I don't like to have to ask for forgiveness. And I am good. I don't do a lot of things that are bad. I try and do nothing that's bad. I live a very different life than probably a lot of people would think. And I have a very --

TAPPER: Always or just now?

TRUMP: I have a very great relationship with God and I have a very great relationship with evangelicals. And I think that's why I'm doing so well with Iowa. TAPPER: The life you have now when you say that you try to do good,

that sounds very different from decades of tabloid media coverage in New York in which some of your wilder escapades were --

TRUMP: No, I'm talking about -- I'm talking about over the last number of years.

[09:35:00]

TAPPER: OK.

TRUMP: You know -- I mean, I'm leading a very good life. I try to lead a good life and I have. And frankly the reason I'm doing so well in Iowa and leading the polls including the CNN poll, where I'm 33 to 20 in Iowa, that's -- and by the way, one of the things I didn't like, that Ted Cruz said -- he said, oh, he's doing so well in the polls (ph) -- not doing so well on the polls because nationally he's not doing well. New Hampshire he's doing very poorly.

TAPPER: You guy goes back and forth on leading in Iowa -- just in Iowa --

TRUMP: The only places he's doing fairly well is in Iowa. That's the only place.

If you look at these other places, he's not doing well, and certainly not doing well nationally.

TAPPER: Let's talk about immigration.

You called for a deportation force that would actively eject 11 million or so -- however many there are undocumented immigrants. I asked Ted Cruz about that last week. He said, he would strengthen the border, enforce the law, but he said, on this program, on STATE OF THE UNION, that -- quote -- "we don't live in a police state," this is a specific rejection of what I said you were proposing. And he said he's not going to sent jack boots to people's door.

What's your response?

TRUMP: President Eisenhower, who is a very nice man, "I like Ike," that was his great slogan. Like mine is, make America great again. He's was, "I like Ike." And President Eisenhower, probably the number -- the real number is 2.3 million. Some people say it's 1.5 million went through this process.

TAPPER: A lot of people think that's a shameful chapter of American history though.

TRUMP: Well, some people do and some people think it was effective chapter. And what happened is when they removed some, meaning brought them back, when they brought them back, they removed some, everybody else left. And it was very successful in one sense. So, I mean that's the way it is.

Look, we either have a country or we don't. If we don't have strong borders, we have a problem.

TAPPER: Let's talk about an ad that Jeb Bush is running in which he calls you a -- quote -- "jerk."

Specifically he talks about the remarks you made at that rally where many people interpreted, and I know you reject it, but many people interpreted that to be you making fun of a reporter's disability. Now, I have heard from parents of children with disabilities who were really hurt and offended and don't believe your denial. If you could go back and do it again, would you do it differently? I know that you say that you were --

TRUMP: Yes, I would.

But let me just tell you something, I have no idea what this reporter looked like or that he had difficulty. OK. He said he met me in the '80s. He said he knew me in the '80s. He worked for the "Daily News." I don't remember that. And I have a very good memory, I don't remember that. But I had no idea who this reporter was, what he looked like. OK? I mean, I give you my word on that.

What I didn't like is the reporter wrote a story, like 15 years ago about, you know, having to do with the World Trade Center...

TAPPER: Right.

TRUMP: ... and about the dancing on the streets, which was a good story for me, in terms of making my point, he tried to take back that story. I said he was graveling. Graveling, you know what graveling means. OK?

TAPPER: Yes.

TRUMP: And I said, the (ph) reporter -- I didn't know who the reporter was, but I said a reporter was graveling. I'm just imitating a reporter. I was not imitating -- I would never -- who would ever do that? If somebody had a disability who would mock a disability? I would never -- I'm a smart person. I went to the Wharton School of Finance, like smart, good student, my uncle, professor at MIT, and all that stuff, who would ever mock somebody, especially in you're running for office? I would never do that.

(CROSSTALK)

TRUMP: Let me explain this to you.

TAPPER: Yes.

TRUMP: The word gravel is exactly what I did. I won't even do it again, because I don't want to do it again. But the word gravel is exactly what I did.

Because he wrote a story, all of the sudden, when I was using that story, he took it back. So I said, he graveled. He was graveling. I have no idea, I had no idea. And when I watch it, I say, wow, it really does look like that, but what I was doing is showing somebody that was graveling.

(CROSSTALK)

TRUMP: I give you my word on that.

TAPPER: If you could go back, you'd do it differently?

TRUMP: I will -- I would have not done it because it's confusing. Some people believe me when I said -- I mean, I swear to you, that's true. I had no idea.

TAPPER: OK.

TRUMP: Now I may have met the guy but I didn't -- how many reporters -- you've known me for a little while. How many reporters do I deal with? Hundreds of reporters a day.

TAPPER: Yes.

TRUMP: I go out last night -- I mean, there were hundreds of reporters --

(CROSSTALK)

TAPPER: ... you acknowledge it looked specific. But I want to move on --

TRUMP: I'm just telling you, I was talking about a person graveling.

TAPPER: OK.

TRUMP: In this case, a reporter graveling and trying to take something back. That's what I meant by it. I swear to you, that's true.

TAPPER: OK.

TRUMP: He said I met him in the 1980s, that's ridiculous.

TAPPER: Let's talk about the financing of your campaign. You said that you will self finance your primary campaign. You are getting some donations, you're not particularly asking for any but you are getting some.

TRUMP: Let me say this, little donations...

TAPPER: Right.

TRUMP: ... where people send them in, because honestly to send them back would be insulting to the people, and then (ph) for a small amount of money.

TAPPER: I get that.

TRUMP: And it doesn't amount to that much.

TAPPER: If you get the nomination, a general election campaign might require a billion dollars...

TRUMP: Yes.

TAPPER: ... to run against the Democratic candidate, would you be willing to enter the public funding program, the public financing program or would you spend a billion dollars or more?

TRUMP: I don't know yet. I haven't thought of it. I'm thinking about this one.

[09:40:00]

I'm financing many own campaign, when I get there, it's a different story because the party gets involved and other people get involved. So, it's a little bit of a different story --

TAPPER: Are you reluctant to spend a billion dollars of your own money?

TRUMP: Well, I have a lot more than a billion dollars if I want to do that. I don't know. I haven't made that decision yet.

TAPPER: I would think Ivanka --

(CROSSTALK)

TRUMP: I have (INAUDIBLE) too (ph). Ivanka might not like the idea.

(CROSSTALK)

TRUMP: None of my kids would like the idea.

TAPPER: Yes.

TRUMP: But I haven't made that determination. I will tell you this, people love the fact that I'm self-funding my campaign.

TAPPER: Oh sure, I get it. Yes.

TRUMP: They love the fact -- I had -- last week in Iowa, and in New Hampshire, I had a standing ovation just when I said, by the way, I'm self-funding my campaign. I had a standing ovation.

People love the fact that I'm putting my own money in. That means that unlike Bush, whose totally controlled by these people and unlike Hillary and honestly, Marco and everybody -- and by the way, Ted Cruz, he's got a lot of people putting big money in, probably maybe Goldman Sachs, we'll have to ask them. I mean, they have loaned him a million dollars. So, they certainly have control over him.

TAPPER: Do you think that Ted Cruz and all the other people you mentioned are more likely to do the bidding of their donors because they got money from them? I mean, is that the direct charge.

TRUMP: Yes, yes. Oh yes. Well I mean look, psychologically, yes. That is the way it is. Somebody gives them money, not anything wrong, just psychologically, when they go to that person, they're going to do it.

TAPPER: They owe them.

TRUMP: They owe them. And by the way, they may therefore vote negatively toward the country. That's not going to happen with me.

TAPPER: Would you take the next step? And if you become president try to have some sort of campaign finance reform so big money is out of politics?

TRUMP: Well, I think you need it because I think PACs are a horrible thing.

First of all, everybody's dealing with their PAC. You know, it's supposed to be like the secret thing.

TAPPER: Right.

TRUMP: They're all dealing. Bush had an event where he had an event for his -- whatever and an event for his PAC. Right? For his campaign.

TAPPER: Right.

TRUMP: The ballrooms were right next to each other. And the events were simultaneous. OK. You tell me they're not dealing with each other? So I think PACs are very bad. I think they're very dangerous. And you have to come up. I do think there has to be transparency, but PACs are very bad.

TAPPER: I have never, before seen, and I don't think it has ever happened, that there has been a State of the Union address in which a candidate, you, were, was implicitly criticized, and then a response from the other party in which the same candidate, you, was implicitly criticized. It really was historic. What was it like to watch?

TRUMP: My great honor. It was my great honor. Because I'm angry. And they both said I was angry. And I get along very well with Nikki, you know Nikki said, we're friends. And we are friends. I supported her. But, I am angry.

And when she said there's an anger that we shouldn't have. I said, well, I disagree with one thing. There's an anger that we should have.

Our country is going to hell. Whether it's ISIS, and we can't beat them, our military is really in bad shape, it's not prepared, it's not, you know, it's got a lot of problems, and I guess monetary problems and other problems. But, when General Odierno (ph) left, he said it's the least prepared that he's ever seen it, and he went a lot further than that because he went back a long way before his term.

I would say this, people have to be very angry. And the reason I have these massive rallies where we had the other night, 15,000 people, and 7,000 people couldn't get in to the arena, you saw that, I mean, it was everybody was there. But I have many of them. People can't (ph) -- we're only judged by the size of the arena. These people are angry. And these are good people. These are great people. They aren't angry people, but they're angry at the way our country is run.

You see the 10 wonderful sailors where they're on their knees with a gun to their head and their hands up in the air, and you see that with Iran, and they're only giving them back because they want their $150 billion...

TAPPER: Right.

TRUMP: ... that's due in two days. I think it's disgraceful what's happening in the country. Whether it's health care, whether it's the way we treat our vets, which is terribly. Whether it's the borders which are like a leaking sieve (ph). And people are angry --

(CROSSTALK)

TAPPER: Do you take the insults or the -- how everyone interpret it, from President Obama and from Governor Haley -- take it as a badge of honor?

TRUMP: I take as the truth. They said I was angry. They said that the people that are with me are angry, and you will see, I mean you're going to see the people voting. They're going to be voting soon. You're going to see what's happening. People are angry.

And you know, they're really angry at incompetence. We have people that are grossly incompetent running our country. Every country is eating our lunch. China on trade, Japan on trade, Mexico on trade, and at the border. Everybody's beating us. We don't win anymore. And people are tired of it.

(END VIDEOTAPE)

TAPPER: Coming up, the bromance is over. Those were the words of Donald Trump after Ted Cruz went after his -- quote -- "New York values," at this the week's Republican debate. More of our interview with the Republican front runner, next.

(BEGIN VIDEO CLIP)

TRUMP: I don't know what he was thinking about. I think he came across it badly (ph).

(END VIDEO CLIP)

[09:45:00]

(COMMERCIAL BREAK)

TAPPER: Welcome back to STATE OF THE UNION. I'm Jake Tapper.

The Republican race to win Iowa is getting so hot you might not even notice the snow. And one Tea Party favorite is warning Donald Trump to back off after Trump unleashed the string of attacks this weekend bashing his closest rival, Ted Cruz. Radio host Mark Levin telling Trump in this open letter to -- quote -- "cut the crab," or -- quote -- "lose lots and lots of conservatives."

I asked Donald Trump about his newly tense relationship with Ted Cruz when we sat down in Iowa on Friday.

(BEGIN VIDEOTAPE)

TAPPER: You defended New Yorkers after Senator Cruz said that you embodied New York values.

[09:50:04]

You were insulted. The Governor Cuomo said he was insulted. Some New York pundits including -- from "Fox" and "Fox Business" channel said they were insulted.

There are some observers out there who think that when Ted Cruz talks about New York values he's invoking something else. He's talking about in their view ethnics, Jews.

What do you think he means?

TRUMP: I'm not sure that he knows what he means to be honest with you. I thought it was very -- he should have never said it. I thought it was very insulting to a lot of people, including Maria who was asking the question. I thought it was very, very insulting.

And I immediately thought of the World Trade Center and the bravery of New Yorkers and the genius of New Yorkers to be able to that that whole section and rebuild after the tragedy. The worst thing that ever happened to our nation in terms of an attack worse than Pearl Harbor because Pearl Harbor they were attacking the military. Here may are attacking civilians. Having breakfast and being in offices.

And frankly, you had two 110, you know, story buildings fall down. Thousands of lives -- death and the smell of death. The smell of death and to see what happened, that resurrection, that whole thing take place New York has gotten tremendous credit for it and for him to be criticizing New York -- you know, you're thinking about the firemen running up the stairs knowing they may never be able to come down. I mean, those buildings were in bad shape. The first one comes down and the second one they're running up the stairs and the policeman and everything else. I thought it was disgraceful that he brought that up.

TAPPER: Do you think he was going after something, a dog whistle of sorts talking about ethnic people or --

TRUMP: You (ph) know (ph), you probably would have to ask him. I don't know what he was thinking about.

I think he came across bad (INAUDIBLE). Some people gave him pretty good reviews on the debate. I think he came across very strident and not a nice person. And people don't like that. TAPPER: The issue about his constitutional eligibilities for the

office, he brought up an extreme example, an extreme interpretation of natural born citizen, one that wouldn't even allow Marco Rubio to be president.

I know that you have been talking about this challenge has something that legal experts and Democrats might invoke. What do you think though? Do you think that Ted Cruz is constitutionally eligible? Do you think Marco Rubio is?

TRUMP: So, it's a very, very simple subject in one way. When I say simple it's simple in that it's a cloud. You can't have a cloud. You can't pick a candidate that may have a 5 percent, 10 percent, 20 percent chance.

By the way, since that happened, there have been lawsuits filed. You know that. It has been filed. And I said lawsuits are going to be filed. The Democrats are going to file lawsuits. They filed lawsuits.

Now, he's got a problem. He was born in Canada. He was a Canadian citizen until 15 months ago, I mean, if you can believe that.

TAPPER: He had dual citizenship. Yes.

TRUMP: Yes. But he was a Canadian citizen and --

(CROSSTALK)

TAPPER: He said he didn't know.

TRUMP: He didn't know -- well, he didn't know about his financial papers either. You know, how are you going to be president if you don't know about a million dollar loan from Goldman Sachs? And you said it's something you don't know about. Now he doesn't know that he was a Canadian citizen. I mean, that's in a way -- maybe worse than all of the other things we're talking about.

TAPPER: You think that --

TRUMP: Here's the other thing. We have a man that didn't know about his financial statement. We have a man who signed an agreement saying that you know everything. You know, signing -- you're signing a note --

(CROSSTALK)

TAPPER: Yes. (INAUDIBLE) papers. Yes.

TRUMP: I have 100 pages, almost 100 pages and billions and billions of dollars that I'm talking about. I'm signing. And he's got a very small amount of money, relatively. And he makes a mistake. I don't know that's a pretty big mistake to make.

Number two and very importantly, you can't run with a cloud. Now, Laurence Tribe from Harvard and many other lawyers say, got a problem. Some are even stronger on the issue than Laurence Tribe. They say you have to be born on the land. You have to be born on the land in the United States.

John McCain was different because he was born on a military base. Both of his parents were as you know were --

TAPPER: Do you think the same cloud hangs over Marco Rubio?

TRUMP: No, I don't think so. No, it's a different -- it's a very different thing.

TAPPER: Because he was born in the United States.

TRUMP: He was born here. It's different. He was born on the land. Ted was not born on the land. And there is a very strict reading that you have to be born on the land. Laurence Tribe actually said that based on Ted's views, he would have to be born on the land.

(CROSSTALK)

TAPPER: Right --

(CROSSTALK)

TRUMP: ... Ted appointing judges to the Supreme Court that (INAUDIBLE) exactly. So, it's a real problem for him.

TAPPER: What do you think? What's your opinion? Do you agree with Larry Tribe?

TRUMP: I'd be honest. It doesn't matter what I think. There's a doubt. You can't have a doubt.

How can you pick --

TAPPER: But you're running for the highest office of the land. You are running for president.

TRUMP: I'm just saying this, look -- yes, I know, but the point is it doesn't really matter. There is a doubt.

I'd tell you what I think. I think there's a big doubt. It could go either way. It could go his way. It could go this way.

But how do you put -- as Republicans, how do you nominate somebody -- let's say he does great and I don't think he's going to do that great. And I don't think he's going to win. I think I'll win. But supposing he did and we have somebody out there that's being challenged. Already two lawsuits are being filed.

[09:55:01]

So, we have somebody that's being challenged -- I don't think so. It doesn't work.

TAPPER: Mr. Trump, thanks so much for your time. TRUMP: Thank you very much.

TAPPER: Appreciate it.

TRUMP: Thank you.

(END VIDEOTAPE)

TAPPER: A quick note CNN will have full coverage of the Democratic debate beginning at 11:00 p.m. Eastern this evening.

Will Hillary and Bernie's face off change the race? CNN's top political analyst will break it down tonight, 11:00 p.m. Eastern.

Thanks for spending your Sunday with us. You can catch me here every Sunday and weekdays on "THE LEAD" at 4:00 p.m. Eastern. And go to CNN.com/SOTU, STATE OF THE UNION, for extras from the show.

I'm Jake Tapper in Washington.

"FAREED ZAKARIA GPS" is next.