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RNC Chief Concerned Trump Could Impact Other Races; Macy's Closing Another 100 Stores by Early 2017; Clinton, Trump Court Middle Class in Economic Plans; Clinton to Release 2015 Tax Returns Tomorrow; Dem E-Mail Hack Bigger Than First Thought?; Aired 10-10:30a ET

Aired August 11, 2016 - 10:00   ET

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


(BEGIN VIDEO CLIP)

[10:00:01] DONALD TRUMP (R), PRESIDENTIAL CANDIDATE: He is the founder of ISIS. He's the founder of ISIS. He's the founder. He founded ISIS. And by the way, if she gets to pick -- if she gets to pick her judges, nothing you can do, folks. Although the Second Amendment people, maybe there is, I don't know.

HILLARY CLINTON (D), PRESIDENTIAL CANDIDATE: Words matter, my friends.

(END VIDEO CLIP)

CAROL COSTELLO, CNN ANCHOR: And good morning, I'm Carol Costello. Thanks so much for joining me.

We begin with the presidential race. Donald Trump gets a sobering reality check from the top of his own party. Sources telling us the RNC chair Reince Priebus has conveyed to Trump that the GOP is becoming increasingly concerned about the impact of Trump's sagging campaign on down ballot races. Many of those House and Senate contests have drawn tighter as Trump has charged into one controversy after another.

This reporting comes as "TIME" magazine unveils its new cover. It's emblazoned with a dripping orange caricature of Trump with the word "meltdown." Now the big question now how will Trump respond to this. We may find out soon. He's speaking in just about a half an hour in front of the National Home Builders Association in Miami Beach. And that's where we find Sara Murray.

Good morning.

SARA MURRAY, CNN POLITICS CORRESPONDENT: Good morning, Carol. Thanks for having me. So there is a lot of buzz of course today about the "TIME" magazine story and what we're hearing is that there was a conversation between Reince Priebus and Donald Trump about the way he's been conducting his campaign, that there is frustration on the part of Reince Priebus and other, you know, top Republican officials about how he's been handling this. And their goal was to sort of give the big picture overview to Donald Trump to make it clear that what he says does have ramifications for other people on the ticket, it does have ramifications for down ballot races and there are going to be moments when there are senators who are in tough re-election fights. They'll criticize him, they'll disagree with him.

But one of the things that the RNC is pushing back on today is the notion that Reince Priebus said to Donald Trump, look, if you don't get your act together, we're just going to funnel the resources to House and Senate races. So Sean Spicer who's one of the RNC officials took to Twitter today to say a story about Reince telling Donald Trump reallocating resources not true.

One thing we do know of course about Reince Priebus is he's not a guy who tends to sort of bust the door down and had very confrontational approaches. But he is the kind of person who can go in, who speaks to Donald Trump regularly and say look, here's the lay of the land, things are not going great for you, we are going to need to make some tweaks, we are going to need to make some changes.

If you think, though, that Donald Trump is paying attention to all of that, is letting it all sink in. Take a listen to what he had to say today on CNBC.

(BEGIN VIDEO CLIP)

TRUMP: Well, I know you're giving me too many areas. Look, I beat 17 people. I started with 17. I now have one person, who I think is pretty close to incompetent, Hillary Clinton. I think she's pretty close to incompetent.

(END VIDEO CLIP)

MURRAY: Now, Carol, this feels like this is what happens every time with Donald Trump. We get to a pivot, people talk to him, say he needs to get his act together. He does a teleprompter speech, he behaves for a day or two, and then he comes right back out and sets off another firestorm so says, I don't feel like I need to change.

Now we are expecting him to speak here in Miami in just a few minutes. He's expected to discuss the economy and we will see if he sticks to the script -- Carol.

COSTELLO: All right. Sara Murray reporting live from Florida today.

And by the way, minutes ago, as you heard, the chief Republican strategist Sean Spicer, he denies the "TIME" magazine report, saying the story about Reince telling Donald Trump about reallocating resources is simply not true.

All right, so there you have it twice. To talk more about this we're joined by CNN political commentator and former communications director for Ted Cruz, Alice Stewart, and CNN political analyst and Real Clear Politics political reporter Rebecca Berg. We're awaiting Bakari Sellers, who's a Clinton supporter, so we'll start with you, ladies, and thanks for being with me this morning.

So, Alice, all of this stuff that we're talking about with the RNC and Donald Trump, what do you make of that?

ALICE STEWART, CNN POLITICAL COMMENTATOR: Well, look, I reached out directly to Sean and the RNC and they reiterated what you and Sara both said, is that the talk and the reporting of reallocation of resources is simply not true. But that being said, look, the journalists who wrote this piece are very thorough. All of my candidates have been at the -- you know, seated across the table with them and they're very thorough journalists.

There are some things in the article that are concerning. And the fact that the RNC may have gone to Donald Trump and say look, you know, there's a -- you know, you need to be a little more cautious with what you're saying and get things back on track and on message, those are clear. And the poll numbers are not exactly where the Republicans want them. And I do believe that we've got less than 90 days to go.

And there is the chance to stay on message, stay focused, and put the attack directly on Hillary Clinton. And we can get things back on track and be victorious in November. But this getting of message and saying things that are not on the mark are -- is what's distracting voters and that's why we're having Hillary have such support.

COSTELLO: All right.

[10:05:07] STEWART: But I do trust the RNC when they say that some of the talk about reallocating resources not true. I do take them at their word.

COSTELLO: OK. So, Rebecca, Donald Trump yesterday seemed to stay for the most part on message. He said that President Obama founded ISIS and Hillary Clinton was the co-founder of ISIS. As you know, all of the polls are showing that Hillary Clinton is winning especially in key swing states and she's making gains among independents. Is that the way that Donald Trump should stay on message?

REBECCA BERG, CNN POLITICAL COMMENTATOR: Well, Carol, that's exactly what voters at this stage are suggesting he doesn't do. So use this very harsh rhetoric, speak off the cuff as he does so often.

There was a very interesting focus group this week done in concert with Democratic strategist and a Republican pollster, Neil Newhouse. And they polled -- talked to women voters, undecided mothers in Ohio and Arizona, two key states in this election, and the women were bothered consistently by not only Trump's rhetoric but also the way he seems to be, as they said, very petty, the way he seems to say things and not think about their meaning. So these are things that voters at this stage are actively thinking about.

I would also point to the recent Bloomberg Politics poll which found that voters' biggest concerns right now with Donald Trump, the statements they have been most bothered by were his insult of a disabled journalist, all the way back last year. And then most recently his attack on the Khan family who spoke at the Democratic convention, and of course their son was killed serving in Iraq and posthumously awarded a Gold Star and a Purple Heart.

And so voters are very concerned right now, undecided persuadable voters, with how Donald Trump is speaking, the phrasing he uses and the fact that he doesn't walk back those remarks or apologize for them. And so when he's using these very harsh language, I think he needs to be more aware and more careful of what he's saying.

COSTELLO: So something -- something that the Trump camp has cleared up, Alice, was whether Donald Trump would skip a debate, right, because he expressed concern that the debates were scheduled at the same time that some NFL games were scheduled. Rudy Giuliani was on "NEW DAY" this morning. And here's what he said.

(BEGIN VIDEO CLIP)

RUDY GIULIANI, DONALD TRUMP SUPPORTER: Donald Trump is going to participate in all three debates and the negotiations are going to be about, as they always are and have always been, about how we do it.

CHRIS CUOMO, CNN ANCHOR: So he'll do all three? These stories about he's only going to do one, you don't buy it?

GIULIANI: He's going to do all three debates.

(END VIDEO CLIP)

COSTELLO: OK, so Rudy Giuliani went on to say that he feel that these debates will be very important for Trump. So in your mind, Alice, how important might they be?

STEWART: Well, I think they're critical. I think there's certain phases at this stage of the game in the general election that are key milestones. The conventions being one where each of the candidates did get a bump. It seems Hillary's has continued quite a bit. When we get to these debates, they will be critical. And being able to show the contrast. Of course the first one in late September.

You all recall back in 2012, Romney knocked it out of the park in his debate and he didn't do so well in the following two debates. But that's because they're critical. It's an opportunity for the candidates to not only showcase their policies and their positions but show the contrast with their opponent. But also be personable and give a side to them that a lot of folks aren't able to see on the campaign trail.

And so these are critical. I do hope that he does participate in them and as Donald Trump always does, there's a lot of showmanship prior to the debates, will he or won't he participate, but I do think he should. They're critical. And it's a great opportunity for voters to make up their mind and see the candidates head to head on the issues and it's going to be certainly large audiences tuning in to that and I think it would be a mistake if he were to bow out of --

(CROSSTALK)

COSTELLO: Well, Rudy Giuliani says Mr. Trump will indeed participate in all three debates.

And Rebecca, you can't help but think that Hillary Clinton's and Donald Trump's styles are so markedly different. BERG: It's like they'll be debating in two different universes,

Carol. And I'm so excited to see how that plays out. And interested to see how that will play out. I would be very interested to be a fly on the wall during Hillary Clinton's debate preparation because how do you prepare for a debate with Donald Trump?

Alice knows very well actually how you debate Donald Trump, having worked for Ted Cruz during the Republican primary. It's a very big challenge because he speaks in generality. There are a number of falsehoods or exaggerations that he uses over the course of speaking. And so these are things that Hillary Clinton is going to have to look out for. And then of course he is very charismatic. People who like Donald Trump or entertained by Donald Trump even while he is, you know, using this very harsh rhetoric and saying things that can offend some people and are widely controversial.

[10:10:03] So it will be very interesting to see how Hillary Clinton prepares for these debates and also tackles Donald Trump's unique unconventional debate style.

COSTELLO: I know. Who plays Donald Trump for Hillary Clinton and who plays Hillary Clinton for Donald Trump? Interesting questions that we'll soon find out, I'm sure.

Thanks to both of you. Alice Stewart, Rebecca Berg, I do appreciate it.

Still to come in the NEWSROOM, bigger than we thought. That's the headline for the DNC's e-mail hack. Could the Clinton camp be in for more fallout?

(COMMERCIAL BREAK)

COSTELLO: Another major setback for retail giant Macy's. The company announcing last hour it will be closing 100 of its 675 stores. Those struggling stores disappearing by early next year.

CNN's Alison Kosik is here with more on that. Good morning.

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Good morning, Carol. So this is kind of par for the course for Macy's. Nothing new unfortunately but just because Macy's over the past six years has been closing stores.

[10:15:01] I want to show you how many. In six years, Macy's closed about 90. But in about a year, 100 stores will disappear. This beginning 2017. So that makes up 15 percent of its -- of all of its department stores are going to just close.

Moving once again very swift, although the stock price certainly doing very well. Investors are cheering this move. Macy's shares up 16 percent today because it means that the bleeding is going to stop and hopefully Macy's is going to gets control of the situation.

COSTELLO: What about the employees? KOSIK: The employees could very well lose their jobs. And no

guarantee that they're going to be placed at other stores. And many want to know why this is happening. Well, there are two reasons for that. One is changing tastes. A lot of people -- a lot of consumers are looking to go to fast fashion houses like Forever 21 and H&M where you can get the latest fashion at a lower price.

You look at case in point at the GAP, at Banana Republic. Banana Republic especially, it has more expensive fashions but the problem with places like Banana Republic is designers have to put out those designs a year in advance and those styles can change over a year. It's a real gamble. And that's part of the reason you're seeing these closures and department stores just aren't able to keep up with changing taste.

I'd be remiss if I didn't mention the elephant in the room, online competition, Amazon is eating almost everybody for lunch. That online effect. The ease at which you can order things online and shop online. That also is eating into Macy's profit as well.

COSTELLO: OK. So, Alison, I want you to stick around because I need another economic expert.

KOSIK: You got it.

COSTELLO: You've got it? So stick with me. Hillary Clinton will unveil her economic plan later today. Much of her message will be about helping the middle class. And she'll likely needle the billionaire for keeping his own tax return secret.

So let's dive deeper into Clinton's economic plan. Joining me now, Monica Mehta, a finance expert and managing partner for Southern Capital, and also Alison Kosik joins me again. And welcome to both of you.

So, Monica, you have looked over Hillary Clinton's plan and what she's going to talk about will sound great to middle class voters, right?

MONICA MEHTA, FINANCE EXPERT: Sure.

COSTELLO: She wants to make the largest investment in good paying jobs since World War II. She wants tuition-free college for the middle class and debt-free college for all. She wants to ensure workers share in the profits they create. So how can she accomplish that without raising taxes big time?

MEHTA: Well, she is raising taxes and she is raising taxes for a select group. And I'd like to add that what is interesting is that a lot of the policies you're seeing from Hillary Clinton aren't actually that far off from what we saw with Trump. He also wants to spend a ton on infrastructure. He also recognizes that the cost of child care has become a huge burden for families. It's 10 percent of the average household spent.

So there definitely is a focus on uplifting the middle class but they seem to have their own recipes for doing it. The Clinton's program is completely silent on these trade agreements which are a core base of Trump supporters and Bernie supporters take real issue with and that's cost the economy quite a bit and it's cost quite a few jobs, about five million from 1997 to 2014.

COSTELLO: So, Alison, outline some of the differences between the two's plan because I know Mr. Trump talks about getting rid of regulations. I don't think Hillary Clinton will be talking a lot about that today.

KOSIK: You're probably not going to be seeing that. But with Donald Trump you're certainly seeing him give a lot of tax breaks to businesses. So, for example, he's looking to lower the corporate rate to 15 percent from 35 percent. That's a huge boost, though, to small businesses. And that's really the engine of our economy, too. So many could see that as a plus. And you look at those three tax brackets, 12 percent, 25 percent, and 33 percent, for the highest paying -- for the highest earnings.

The problem with those tax brackets, though, at this point is we don't know which incomes those brackets fall into. New trade deals and tariffs, of course. Trump looking to completely just change, you know, the trade deals that are in place and place tariffs on goods that are coming from places like China because he feels that they are cheats, as he's called them.

As far as regulations, yes, he is saying if he becomes president, he is looking to put a temporary moratorium on all regulations because he thinks that extra regulations in this country are costing upwards of $2 trillion.

COSTELLO: OK. I want to focus now on college debt because Hillary Clinton, Monica, said that she wants to make college education free to middle class Americans. And she wants to pay for that by raising taxes on the middle class. So how much would she actually have to raise taxes on the wealthy, I mean, to do that?

MEHTA: Well, I mean, I don't know exactly what you'd have to raise for a single year but I think the number is there's $1 trillion of college debt outstanding. And it's a huge problem. It is an issue that seems to follow millennials around and it forced them to postpone huge milestones in life like getting married, moving out of your parent's house, buying a car. And it's something that has become such a setback for millennials that they really view debt differently than previous generations.

It is clearly a pain point that needs to be addressed and it is unclear what the details are in terms of how we're going to actually achieve this but it seems to be need focused which is a positive thing.

[10:20:07] COSTELLO: Which is a positive thing. OK, so Donald Trump's ideas to ease the debt burden for college students is to privatize the college loan system. So instead of borrowing from the government you would borrow from a private bank. Is that a good idea?

KOSIK: Well, it depends on how you look at it. I mean, if you're able to get a loan, sure. You know, you look at Hillary Clinton's plan that she was just talking about. Although on its headline, it sounds good and it's certainly helpful to those who are need based, it's really difficult to pay for something like that. I talked to one college professor a couple of months ago when her debt-free college plan came out and he was concerned how this was sustainable.

I mean, just to the bare minimum of he was wondering how do you pay the college professors at the university? How sustainable is it? And that's probably why in her plan not all states have to agree to have debt-free tuition. In addition, that's just the tuition. The room and board, that's not taken care of. And sometimes the room and board at some of these state colleges can be as much or more than the tuition. So although we're hearing debt free, sometimes it's not as great as it seems once you pull back the curtain and actually read the details.

COSTELLO: OK. I want to talk about tax returns because Hillary Clinton reportedly will release her 2015 tax returns tomorrow. Tim Kaine, her running mate, will release his tax returns for the last 10 years tomorrow. And they're doing this for a purpose, Monica. They want Donald Trump to release his tax returns. Should he? Will it work? Is it good strategy?

MEHTA: He has nothing to gain from releasing his tax returns. At some point, he needs to do it. But, you know, there is definitely an acute focus on why are you not releasing this information. So I think there's nowhere to go but down for him once that information comes out.

COSTELLO: So, Jeff Zeleny, I have him live now, he's going to be covering Hillary Clinton's big economic speech later today. Tell us more about how Hillary Clinton is trying to force the issue with Donald Trump releasing his tax returns.

JEFF ZELENY, CNN SENIOR WASHINGTON CORRESPONDENT: Good morning, Carol. She is going to say that she is going to release her 2015 tax returns as early as tomorrow we're told. Her returning mate Tim Kaine will also be releasing for a 10-year period. Now this is all an effort to, A, continue in a pattern what she has done for years. Her and former President Bill Clinton have long released their tax returns. Some three decades worth or so are on their Web site. And it is to make the point clear that Donald Trump has not yet released his tax returns.

You can argue if it's good or bad for Donald Trump politically to not release them. But he would be -- he is the first Republican presidential nominee, a nominee of either party to not release his tax returns going back to Richard Nixon here. So it is without precedent. And it does build the narrative of why isn't he releasing his tax returns?

The main thing that we would find out if he would release them is what tax rate he is actually paying. We learned a lot of information from that. But that is basically the main point here, how much in taxes is he paying, and that goes right to the heart of the economic argument that Hillary Clinton will be making here today in Warren, Michigan, that she is fighting for the middle class. Her policies would help the middle class. And she says his were not.

This is a bit of a bookend to the economic speech that he gave earlier this week in Detroit here. The point of this is to make clear that his business strength, his acumen that he is using to drive his political argument, is actually not as -- he's not fighting for voters, he's actually trying to protect himself here, so that's the political argument here, Carol, he's trying to make. But I don't expect him to necessarily respond to her argument and release his taxes. But she's certainly will make that call today and release her taxes tomorrow.

COSTELLO: I think you're right about that. I have to leave it there.

Alison Kosik, Monica Mehta and Jeff Zeleny, thanks to all of you.

In just a few minutes, Donald Trump will talk jobs himself. He'll talk about the economy. He's going to address the National Association of Home Builders. We'll take you there live next.

(COMMERCIAL BREAK)

[10:28:37] COSTELLO: And good morning, I'm Carol Costello. Thank you so much for joining me.

Donald Trump focusing his attention today on the battleground state of Florida. He's about to speak in Miami Beach. This is the first time we'll hear from Mr. Trump as we're hearing the RNC is concerned his behavior will impact other GOP races. We'll bring you some of Mr. Trump's comments live.

New fears for top Democrats in the wake of that Russian cyber attack. "The New York Times" is now reporting that the e-mail hack was bigger than anyone thought. And that could mean a slow drip of embarrassing information right up until November 8th.

CNN's Deborah Feyerick is here with more on this. Good morning.

DEBORAH FEYERICK, CNN NATIONAL CORRESPONDENT: Good morning, Carol. And of course the hack is bigger than anyone imagined and that's a big issue for the Democrats because they do feel that some of those e- mails might be released and do big damage to the elections. Now it does appear that the cyber attack against the Democrats was even bigger than initially thought. And having hacked the Democratic National Committee and DCCC, hackers would have had access to donors, fund raiser, virtually anyone of influence in the Democratic Party.

And the "New York Times" citing sources briefed on the investigation, reporting that the FBI has expanded what it is looking at. They're learning Democratic officials, their private accounts may have been hacked. The "Times" also reporting that on the list of those hacked, the Democratic Governors Association.

Now cyber security experts who investigated the hack do confirm that it is Russia, that they've identified both Russian national and military intelligence units based on a variety factors. But American officials believe that while they have a high level of confidence that it's Russia, so far.