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Kerry to Lay Out Obama Administration Middle East Peace Plan; Trump Tower Scare Sparks Security Cost Flap; Report: White House Set to Punish Russia for Hacks; Trump on Consumer Confidence Surge: "Thanks Donald". Aired 9-9:30a ET

Aired December 28, 2016 - 09:00   ET

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


[09:00:11] VICTOR BLACKWELL, CNN ANCHOR: Good morning to you, I'm Victor Blackwell in for Carol Costello this morning. Thank you for being with me.

Well, after days of tension and some sharp exchanges between the U.S. and Israel, Secretary of State John Kerry will map out the administration's plan for peace in the Middle East this morning. The speech is set to begin in just a couple of hours, and it comes after the U.S. refused to veto a U.N. resolution condemning Israeli settlements in East Jerusalem and the West Bank.

Well, that touched off days of diplomatic fallout and accusations of backroom dealings. Well, Secretary Kerry is expected to touch on all of that. But with just three weeks left in office, will his words have any real lasting effects? CNN Global Affairs Correspondent Elise Labott is following this story for us and joins us now from the State Department.

Elise, good morning.

ELISE LABOTT, CNN GLOBAL AFFAIRS CORRESPONDENT: Good morning, Victor. Well, you know, Secretary Kerry has been working on the peace process really since he took office four years ago. He had that kind of year- long effort to forge a peace deal between Israelis and Palestinians. That obviously didn't work and ever since then, he's been looking for an opportunity to lay out his vision for how the administration sees the Mid-East peace deal.

Obviously, this is taken into context of the vote last week at the U.N. Security Council. And I think what you'll hear from Secretary Kerry in a couple of hours is trying to put that all in context, why does the U.S. feel that the settlements issue is a huge obstacle to peace and how they see the possible deal going forward. Officials say everyone knows what the deal is, but that Secretary Kerry will try to put some meat on the bones about that.

He'll also announce, you know, what the administration has done so far but also, I think, answer questions and give a vigorous denial of charges that the United States was orchestrating the whole vote behind the Security Council as Israel alleges.

Take a listen to Deputy Spokesman Mark Toner yesterday at the State Department speaking to this issue.

(BEGIN VIDEO CLIP)

MARK TONER, DEPUTY SPOKESPERSON, UNITED STATES DEPARTMENT OF STATE: We reject the notion that the United States was the driving force behind this resolution. That's just not true. The United States did not draft this resolution nor did it put it forward. It was drafted initially and introduced, as we all know, by Egypt in coordination with the Palestinians and others.

(END VIDEO CLIP)

LABOTT: Now, obviously, Secretary Kerry leaving in a few weeks, this administration knows that it will leave office without this issue resolved, without a peace deal. And officials say they know that the chances for a resumption of negotiations or talks are very slim in the near future, but what Secretary Kerry hopes is that he can lay out his vision, how he sees this being resolved, because at some point, he hopes that the parties will be ready to get back to the table and this could form the basis for those talks. Victor.

BLACKWELL: All right. Elise Labott for us there at the State Department. Elise, thank you so much. And be sure to head to CNN.com, check out Elise's new piece, John Kerry's mission to save diplomacy. Again that's at CNN politics there on our web site.

Now, for more on Secretary Kerry's speech, I'm joined now by Jason Johnson, politics editor for theroot.com, professor also at Morgan State University; David Rohde, CNN global affairs analyst and national security investigations editor at Reuters; Frida Ghitis, CNN.com contributor and world affairs columnist at "World Politics Review"; and Ron Elving, Washington desk senior editor and correspondent at NPR.

Good morning to all.

JASON JOHNSON, PROFESSOR OF POLITICAL SCIENCE AND COMMUNICATIONS, MORGAN STATE UNIVERSITY: Good morning.

RON ELVING, WASHINGTON DESK SENIOR EDITOR AND CORRESPONDENT, NPR NEWS: Good morning.

BLACKWELL: Frida, I want to start with you. What are you expecting, the meat on the bones that Elise was just talking about? What are you expecting to hear from the Secretary this morning?

FRIDA GHITIS, WORLD AFFAIRS COLUMNIST, WORLD POLITICS REVIEW: Well, I think he's going to do two things. First, he is going to respond to the accusations that the Israeli government has made, that it was the United States that orchestrated this vote at the U.N. Security Council last week. And then the second thing he's going to do is he's going to essentially reveal the plan that he had put on the table about three years ago at the end of the talks that he tried to broker between Israelis and Palestinians.

And, you know, one thing that he will accomplish by doing that is that he will show that the United States is not focusing solely on settlements. And as we have seen, the Obama administration has had a single-minded focus on settlements as the core issue of the conflict between Israelis and Palestinians. So he will talk about other issues.

He will talk about security for Israel, which is a key concern for the Israelis when it comes to a possible deal with Palestinians. He would talk about the issue of refugees, about the issue of Jerusalem, about the possible borders of a state. So all the other about half a dozen issues that are part of this extremely complex conflict that is not limited to the matter of settlements.

[09:05:03] BLACKWELL: Ron, there was an official with the administration who said that the Secretary had wanted to deliver this speech some time ago, but it -- this is a reporting from "The New York Times" -- was held back by the White House so as to not anger Prime Minister Netanyahu. What has changed in the recent history that that is now not a major concern with abstaining in this vote at the U.N. Security Council and now giving this speech?

ELVING: The Israelis are already angry. The Israelis are as angry as they have been with us, possibly in the relationship that goes back nearly 70 years. So right at this particular time, it would seem the least propitious moment you could imagine to put forward an actual plan for resolving the Middle East, for resolving the Palestinian- Israeli conflict, but already at this point, the fat is in the fire.

We're at a point in this relationship where it's reduced to gestures. They're down to the last weeks of the Obama administration. Some of these gestures in recent days have been quite rude, and John Kerry wants to set the record straight from the standpoint of the Obama administration.

BLACKWELL: So, David, is this, from your perspective, just a gesture? The Obama administration is watching the clock like the rest of us. They know they've got three weeks left.

DAVID ROHDE, NATIONAL SECURITY INVESTIGATIONS EDITOR, THOMSON REUTERS: Yes, I think it's a lot about John Kerry personally. I traveled with him and wrote a long profile of him in the beginning of his tenure as Secretary of State. He passionately believed in a Middle East peace deal. He couldn't do it. Some people said he was delusional.

And I think the administration waited. They didn't want to create this issue during the presidential election of the U.S., and I don't think this speech will have much impact. It's sort of Kerry's swan song. He'll try to set the record straight, but the relations are just, you know, at rock bottom between Obama and Netanyahu at this point.

BLACKWELL: Jason, let's talk about the domestic audience for this because, after the abstaining from that vote in the U.N. Security Council last week, there were both Republicans and Democrats in Congress who were taken aback by that decision.

Let me read for you a statement from Democratic House Rep. Steny Hoyer, and let's put it up on the screen.

"Now, it is my understanding that Secretary Kerry, in the last few days of his administration, intends to outline the parameters of an agreement between Israel and the Palestinian authority. This flies in the face of the United States' long-standing position that such a formulation should be reached only through negotiations by the parties and not by the United States, the United Nations, or any third party. I urge Secretary Kerry and the administration not to set forth a formula which will inevitably disadvantage Israel in any negotiations."

So how much of this is about the domestic audience, not just speaking to Prime Minister Netanyahu?

JOHNSON: Yes, Victor, you're exactly right. A lot of this is about domestic posturing. It's about dusting off one's legacy before handing this off. Netanyahu knows that all of these negotiations, anything moving forward with the Middle East peace process is going to be done with President-elect Donald Trump and possibly Tillerson as Secretary of State, so nothing that John Kerry says matters.

But for people who are lobbyists and concerned and members of Congress, they want to make sure that, as many people have said, they're setting the record straight. But I also think this, you cannot ignore the fact that the relationship between the Obama administration and Netanyahu has been terrible.

Remember, Benjamin Netanyahu gave a speech in front of a joint session of Congress directly against the suggestion of Barack Obama, so, you know, this is everybody sort of laying out their feelings because they know that things are about to change dramatically once Trump is in office.

BLACKWELL: So quickly to you before we go to the next story, do you expect that we will hear a response from the President when he returns to Washington? This is obviously from the Secretary of State, a member of his Cabinet, but this animus, some have called it, is from the Prime Minister of Israel. At his level, should we hear from the President?

JOHNSON: Yes. Well, I think you're going to hear comments from both. I think President Obama is probably going to back John Kerry. John Kerry didn't write this in a vacuum. I'm sure the President-elect Donald Trump is going to say something, and I'm sure Netanyahu is going to say something.

But the reality is this, the United States gives the vast majority of its foreign aid to Israel. There is but so much that Netanyahu can say right now because he's at risk of that funding being cut back once Trump is in office because he has said that he doesn't want to continue paying for the world's problems.

BLACKWELL: All right. Jason Johnson, David Rohde, Frida Ghitis, Ron Elving, all of you, stay with us. We've got a lot more to talk about in just a moment. Now, to the President-elect, Donald Trump expected to resume meetings

at his Mar-a-Lago resort today as he looks to fill the remaining openings for his staff in his Cabinet. Those meetings come in the wake of a security scare at Trump Tower. The NYPD, look at this, gave the all-clear after a suspicious package turned out to be just a bag of toys. But the fallout, I wonder, is it real here? A Twitter war over the cost of protecting the incoming first family.

Joining me now from Trump's Palm Beach estate is Senior Washington Correspondent Jeff Zeleny.

Jeff, good morning. And tell us, what is this all about because they've been going back and forth overnight over the cost of securing this building?

JEFF ZELENY, CNN SENIOR WASHINGTON CORRESPONDENT: Good morning, Victor. They have indeed. After that brief security scare you just saw there yesterday at Trump Tower, it heightened, already, conversation that has been going on between the City of New York about the cost of Donald Trump's transition. And not surprising, given this campaign, it played out in Twitter as well.

[09:10:15] Sean Spicer, the incoming White House Press Secretary tweeted this. He said, "I'm back at work here at Trump Tower after a false alarm. Thanks NYPD." Well, then the Mayor's Press Secretary tweeted this back. He said, "No problem. We'll send you the bill." Of course, that touched off an escalation back and forth about the cost of this.

And the Mayor's Office has estimated this is going to cost them $35 billion -- million, excuse me, since the election through the time of him taking office in some 23 days here. They have asked the federal government for some money but they have not yet been promised all of that, only a sliver of that.

But it is one of the issues here that is sort of underlying this service here, about the unease that some in New York have about Donald Trump. Now, he is here in Mar-a-Lago at his resort behind me here. He is going to be having more meetings, I'm told, throughout the day.

And he has two Cabinet positions that are yet to be filled, the Veterans Affairs Department Secretary and the Secretary of Agriculture, as well. Those two positions could be filled by the end of the week, and that will round out his formal Cabinet. Also, he has some other White House staff appointments coming up.

But, Victor, just a couple moments ago, Donald Trump continued his own escalation of a very unusual, extraordinary back and forth with President Obama on Twitter as well. This follows what President Obama told David Axelrod in a podcast a couple days ago saying he could have indeed won the election had he been running against Donald Trump.

This is what Donald Trump just tweeted again, as I said, a few moments ago. He said, "I'm doing my best to disregard the many inflammatory President O's statements and roadblocks. I thought it was going to be a smooth transition. Not." So starting the day off with that. Again, the soon-to-be 45th President going after the 44th President, all on social media here.

Victor, you wonder how these conversations will continue between the two because up until now, they have had an open dialogue, talking on the phone several times, meeting, of course, once in person at the White House after the election. But with 23 days to go before Donald Trump is sworn in, it seems to be an acrimonious relationship between Mr. Trump and Mr. Obama. Victor.

BLACKWELL: Yes, that statement is sticking with the President-elect but it's all an academic exercise because we will never really know who would win that race because --

ZELENY: We will not.

BLACKWELL: -- they didn't run against one another. All right. Jeff Zeleny for us there along the intercostal there at Palm Beach. Thanks so much.

Well, still to come, a report. President Obama is ready to make Russia pay for interfering with the presidential election. What he is planning to do, that's next.

(COMMERCIAL BREAK)

[09:16:14] BLACKWELL: Welcome back. I'm Victor Blackwell in for Carol Costello this morning.

The Obama White House reportedly getting ready to punish Russia for interfering in the U.S. elections. "The Washington Post" says expected announcement as early as this week. Now, this comes as some top Republican lawmakers brace for a showdown with Donald Trump.

The issue here: whether or not Russia actually interfered in the 2016 race. Well, in recent weeks we know that Donald Trump has dismissed allegations of Russian hacking, and questioned U.S. intelligence agencies in the process.

But, in an interview with CNN's Jim Sciutto, Senator Lindsey Graham minced no words about his views on Russia's involvement and the next steps the U.S. will take in response. Watch.

(BEGIN VIDEO CLIP)

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: There are 100 United States senators. Amy Klobuchar is on this trip with us. She's a Democrat from Minnesota. I would say that 99 of us believe the Russians did this. And we're going to do something about it. Along with senator McCain, after this trip's over, we're going to have the hearings and we're going to put sanctions together that hit Putin as an individual, and his inner circle, for interfering in our election.

(END VIDEO CLIP)

BLACKWELL: Well, the senator mentioned there, many of his Senate colleagues agree with him. Among them, as he mentioned, John McCain. Now, for his part, the Arizona senator tells CNN he was, quote,

"shocked" to hear that the president-elect disregarded the findings of the CIA and the FBI. But McCain added there could be one thing that changes Trump's mind.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), ARIZONA: I think he will be when presented with the overwhelming evidence, change his view.

(END VIDEO CLIP)

BLACKWELL: All right. With me again, Jason Johnson, David Rohde, Frida Ghitis, and Ron Elving.

Jason, let's start with you.

What is that I guess assumption from Senator McCain based on? Donald Trump has the information. He's been briefed and still he says he's not convinced that Russia's responsible for the DNC and the Podesta hacking.

JASON JOHNSON, THEROOT: Right. Victor, this is a fantasy assumption on the part of John McCain. Donald Trump does not care. He has selected someone for secretary of state who is in Vladimir Putin's pocket. He allowed himself to work through the campaign with the assistance of hackers, of WikiLeaks who were working in conjunction with Vladimir Putin and what remains of his sort of information state that he's got.

You know, Donald Trump doesn't care about any of this. All he cares about is the fact that he's in power. But I think people who actually care about America and care about sovereignty and don't want the country run by a Manchurian candidate should actually step forward and said we need to investigate why this happened and do something about it.

But I also say this very quickly, sanctions now don't matter. President Obama should have made an Oval Office statement about this during his campaign and invited both Trump and Hillary Clinton to come to the White House and discuss this issue. To talk about it now, after the election, is almost pointless.

BLACKWELL: Let me get to the meat of the sanctions in a moment but, Ron, an illegal hurdle that the White House has to get over, making this proposal for sanctions fit into a previous executive order. Explain that for us.

RON ELVING, SENIOR EDITOR AND CORRESPONDENT, WASHINGTON DESK, NPR: That's right, Victor. Going back to 2015 there were tools that were put in place for the executive to use to retaliate if a foreign power were found to be in some way or another hacking into our military computers, or in to something like infrastructure, power grid, and also into the computers of American businesses to obtain economic information that would advantage say a Chinese corporation. Since then, there have been negotiations with the Chinese on exactly that kind of a case.

So, that does not necessarily cover any of those circumstances I just described. What we're looking at in 2016, and the hacking of the campaign. Now, a lot of people get confused about whether or not the hacking took place on Election Day, in the actual mechanics and apparatus of conducting the vote.

[09:20:01] That's not what's being alleged. What's being alleged is that throughout the campaign, the Russians were getting involved, hacking the Democratic Party, possibly hacking others as well, but using the information from the Democratic Party through WikiLeaks to change attitudes towards Hillary Clinton.

BLACKWELL: All right. Frida, let me come to you and what Jason just raised there. What works in these sanctions, because there were sanctions that were leveled when the little green men started to show up on the Crimean Peninsula? Still, Russia annexed Crimea. What works as a deterrent for Russia in the future or potentially Iran or China?

FRIDA GHITIS, CNN.COM CONTRIBUTOR: Well, sanctions have had an impact on the Russian economy. But as you rightly say, they have not deterred the Putin government, they have not deterred him from continuing not only to interfere in America's elections, which is what the U.S. intelligence security services all believe, but also to interfere throughout Western Europe. Putin is determined to undermine democracy across the western bloc.

So, what Obama is doing now to some extent is trying to block off Trump, to pressure him when he comes in to office, because when it comes down to it, the only thing that matters really now is what happens after January 20th. So, if Obama imposes these new sanctions now, he may make it more difficult for Trump to move forward without making a move that will show him more clearly to be aligning himself with Putin.

And this whole Russia issue is going to be something very interesting to watch during the Trump administration because Trump as we know is very close to Putin emotionally, at least, but there are some in his cabinet, in his proposed cabinet, who are not. So we will see some kind of a disagreement here between the -- the nominated defense secretary who is very skeptical of Russia, and his -- his department of state leader, his state secretary.

So, we could see a conflict between State and Defense over the future course of relations between the United States and Russia, and Trump will have to make a decision between the two and then, we will see what path the relations take.

BLACKWELL: David to you. I mean, it would be one thing to take no action in response to what the government calls overwhelming evidence that Russia's responsible for those hacks. It's another thing to roll back the previous president's actions.

Is that something -- and I shouldn't say is it something, to what agree is that the consideration that the President Obama moves forward with these potential sanctions?

DAVID ROHDE, CNN GLOBAL AFFAIRS ANALYST: He is putting Trump in a box. Will he roll back these sanctions? But this is going to happen again. It's a huge problem cybersecurity. We just had Chinese hackers indicted here in New York for hacking a law firms and profiting from it.

You know, a colleague of mine at "Reuters", Joe Menn, wrote a long story how for years the U.S. government has studied hacking and trying to prepare for what's upon us today but they thought of simply hacking into sort of power grids. There was no preparation in the U.S. government for a disinformation campaign. The Russians executed it perfectly. And Trump will have to grapple with this when he takes office.

BLACKWELL: All right. David Rhode, Frida Ghitis, Ron Elving, Jason Johnson, thank you all.

All right. Still to come, Princess Leia may have been her most famous role, but Carrie Fisher was also a role model for many. Her life as an author and an advocate, that's next.

(COMMERCIAL BREAK)

[09:26:57] BLACKWELL: So, will today be the day? The markets open in about two minutes, three minutes now. And right now, futures are ticking up as we wait to see if the Dow could finally reach that elusive 20,000 milestone. That's after an historic close on Tuesday.

Meanwhile, December, a landmark month for consumer confidence, reaching its highest point since 2001. And the president-elect is congratulating himself for that story, tweeting, "Thanks, Donald."

CNN's Cristina Alesci is joining us now.

He's taking credit for it.

CRISTINA ALESCI, CNN BUSINESS CORRESPONDENT: He is. What he's doing is he's taking a little-known number that Wall Street uses as a data point along with many others and introducing it to a much wider audience with no context.

So, what is consumer confidence? First off, let's take a look at that. It's essentially a gauge of how -- what consumers feel about their own economic prospects, about business conditions, and yes, going forward, outlook-wise they see wages going up, they see more jobs available, they see stocks going up.

But, what Donald Trump doesn't mention is that although we've had month to month fluctuations on this number, the general trend since the recession has been positive. So, this is not an unusual thing to see. Consumer confidence has been trending in this direction for quite some time.

The other issue is here, you know, now that he's out there taking credit for this number, you know, the big question is, can he actually implement the policies that are driving this consumer confidence?

BLACKWELL: Yes.

ALESCI: What are those policies? Lower taxes, less regulation, more spending on infrastructure.

There's a big question mark as to whether or not he's going to be able to pull those off and consumers also are turning on the TV and watching us talk about the Dow possibly hitting 20,000.

BLACKWELL: Yes.

ALESCI: So you don't know exactly what's driving the consumer confidence. It could be the election. It could be that consumers are seeing their own personal wealth increase, or they feel better about the economy because markets are doing so well.

BLACKWELL: So, there's a possibility he has some claim to credit for it, but not solely?

ALESCI: Exactly. Exactly.

There's a confluence of factors that go in to consumer confidence. The big question will now be, will he be able to do what he says he's going to do?

BLACKWELL: Yes.

ALESCI: And part of the reason that investors gave him so much credit, and pushed market prices higher is because Congress is now controlled by one party. So, investors see that as a sign that the gridlock will be relieved in Washington, D.C., and will actually be able to get these policy changes enacted.

Now, though, that's been baked in. So, the question is, has the market gone too far, too fast? Has all the good news been baked in, and what's the risk on the downside?

BLACKWELL: All right. Well, you know, sometimes, Congress will find a way to lock it up again.

ALESCI: Exactly.

BLACKWELL: Cristina Alesci, thanks so much.

ALESCI: Of course.

BLACKWELL: Good morning to you. I'm Victor Blackwell, in for Carol Costello. Thank you for being with me.

Reaction now is pouring in after actress Carrie Fisher's death.