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Russia Takes no Revenge; Sanctions against Russian Intelligence Services; Giuliani on Intel Report; Putin Waits for Trump's Reaction; GOP Leaders Say Punishing Russia Long Overdue. Trump Clash with Party; Boxing in Trump on Russia; Senate to hold Hearings Next week on Russian Hacking; Obama Meeting with Dems on Obamacare. Aired 2-2:30p ET

Aired December 30, 2016 - 14:00   ET

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

[14:00:11] FREDRICKA WHITFIELD, CNN ANCHOR: Hello, everyone, I'm Fredricka Whitfield, filling in for Brooke Baldwin.

We start with Russia's bizarre reaction to America's retaliation for hacks targeting the DNC during the 2016 race. Just hours after the U.S. hit Russia with some of the toughest sanctions ever imposed, Russia did what few anticipated - nothing. America forcing Russian diplomats, suspected spies, out of this country, shuttering two Russian compounds, one in Maryland, the other in New York, and hitting Russia's chief intelligence agencies with tough sanctions.

Russia deciding not to engage. President Putin issuing a statement which included an invite to the children of American diplomats in Russia to Christmas and New Year shows in the Kremlin. And then came this tweet from the Kremlin's Twitter account reiterating that festive sentiment that has left a lot of people scratching their heads. It's apparently from Putin who, quote, "offers his New Year greetings to President Obama and his family, also to President-elect Donald Trump."

Let's go live now to Moscow and CNN's senior international correspondent Matthew Chance.

So, Matthew, the U.S. just slammed some of the toughest sanctions of any country in the world on Russia. So what now is behind this kind of response coming from Putin?

MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: It's an interesting question. I mean it was a very unexpected response as you, as you indicated. We were expecting the Kremlin to do a tit for tat expulsion of 35 U.S. diplomats here in Moscow. That's what the Russian foreign minister advised apparently the Kremlin to do. But it was all very choreographed. It was all very, you know, kind of staged to try and show that Vladimir Putin was magnanimous, that he wanted to take the high ground, that he wouldn't engage with the Obama administration in its final few weeks. It's been characterized by the Russians as vindictive and unimaginative, diplomatically, the Obama administration, that is.

And Vladimir Putin was clearly reaching out to the incoming Trump administration saying, look, you know, I'm not going to do anything with the diplomats, I'm not going to expel anyone. I'm not going to play that game, effectively. But I am going to base our policy, our relationship with the United States on the policies of the incoming Trump administration. And so he's reaching out to Donald Trump, who takes office, of course, in a couple of weeks, or in three weeks, and saying, look, you know, we want to do a deal. We want to do a deal about a whole range of issues. And Vladimir Putin is trying not to let the Obama administration derail that - that hope and anticipation.

WHITFIELD: All right, Matthew Chance, and what more do we know about the kinds of deals that Putin would want to make with a President Trump?

CHANCE: Well, I mean, there's a whole host of issues, Fredricka, that have divided the United States and Russia over the past couple of years. It's no secret they've been at odds over Syria, for instance. They've on opposite sides of the conflict there with Russia backing Bashar al Assad, the Syrian president, and the United States backing anti-Assad rebels. It's no secret either that there have been tensions over Russia's annexation of Crimea in Ukraine. In fact, the U.S. has imposed sanctions against Russia because of that involvement in Ukraine. And, of course, the issue of NATO expansion has been a thorn in the side of relations between the two countries for some time. And what the Kremlin hopes and what many Russians who we've spoken to hope as well is that in Donald Trump there will be an American president that is a little more sympathetic to the Russian point of view and some of those divisions can be - can be narrowed.

WHITFIELD: All right, Matthew Chance in Moscow, thanks so much.

Let's go now to Athena Jones, who is with President Obama in Honolulu.

So, Athena, we know the president again condemned Russia's hacking, but what has been the reaction here in the U.S. to his sanctions?

ATHENA JONES, CNN CORRESPONDENT: Well, the White House hopes that these sanctions will have some impact. I can tell you that the White House is not responding to the non-response from President Putin. They're directing us to the State Department. The State Department official telling CNN, "we have seen President Putin's remarks. We have nothing further to add." So I don't expect much news on that front.

Meanwhile, Trump supporters, like former New York Mayor Rudy Giuliani, who has, of course, been one of Trump's most vocal supporters and defenders, are continuing to cast doubts on the conclusions reached by multiple U.S. intelligence agencies when it comes to Russia being behind these hack. Here's more of what he had to say on Fox.

(BEGIN VIDEO CLIP)

RUDY GIULIANI, ADVISER TO PRESIDENT-ELECT TRUMP: You get your own people to review it. There's no question that the intelligence that President Obama has been getting has either been incompetent or politicized. I would urge President Trump, when he becomes President Trump, have his own intelligence people do their own report. Let's find out who did it. And then let's bang them back really hard. Not some moving a couple of this ones around and that ones around. They're not - they're not hacking from those places. It's totally absurd.

(END VIDEO CLIP)

[14:05:21] JONES: Now it's interesting to hear Rudy Giuliani talking about Trump's own intelligence people. It's unclear what he exactly means by that. Is he going - is - does he expect a new administration to have all new intelligence operatives?

But I can also point out that members of Trump's own party disagree with him on this front. They're not raising questions about the conclusions reached by these intelligence agencies. You had folks like Speaker Ryan, Senate Majority Leader Mitch McConnell saying, look, these sanctions, they're maybe overdue, maybe late, but these are appropriate actions being taken. And you have folks like Arizona Senator John McCain, who have called for hearings next week on this whole cyber-attack issue. So this is a point where Trump seems to be at odds with members of his own party.

Fred.

WHITFIELD: All right, Athena Jones in Honolulu, thank you so much.

All right, so let's bring in our panel now. CNN military analyst, retired lieutenant General Mark Hertling, David Kramer, former deputy assistant secretary of state for Russia and senior director for human rights and democracy at the McCain Institute. Also joining me, John Nixon, former CIA senior analyst and author of "Debriefing the President: The Interrogation of Saddam Hussein."

All right, gentlemen, thanks so much for being with me.

JOHN NIXON, FORMER CIA SENIOR ANALYST: Thank you.

WHITFIELD: So, John Nixon, to you first. Russia took an unpredictable route. The predictable route would have been this, you know, tit for tat, perhaps matching sanctions, expelling people. What's your interpretation of why Vladimir Putin took this route?

NIXON: He - why should he - why should he not take this route? He - all he has to do is wait 20 days and then he has a new president of the United States to deal with and a president whom, for all intense and purposes, he's probably going to get along with great.

WHITFIELD: And so, David, in your view is, you know, the public message one that's very different than internally what may be taking place in Russia as it pertains to Vladimir Putin?

DAVID KRAMER, FORMER DEPUTY ASST. SECRETARY OF STATE FOR RUSSIA: Well, let's be clear, Putin is trying to come across as magnanimous, as reasonable, moderate, but he's the one who authorized the hacking in the United States. So what President Obama did yesterday was simply to retaliate for the Russian hacking. Had Putin responded to Obama's measures yesterday, he would have been escalating this situation, not retaliating for it. So I think Putin has certainly orchestrated this response today. What the foreign ministry tried to do was completely coordinated with the Kremlin. Let's not make any mistake, though, about whom we're dealing with

here. Putin is responsible for the hacking. He's responsible for the invasion of Ukraine. He's responsible for the civilian deaths from Russian bombing in Syria. This is a man who poses a threat to the United States, not someone who, in my view, is going to be a good buddy with the next president of the United States.

WHITFIELD: So then, in your view, has the U.S. gone far enough with the expelling of Russians with the promised sanctions, with the closing of the two compounds?

KRAMER: Well, I think the measures that were taken were good, but more can be done. For example, the head of the FSB, Alexander Bortnikov, was not included on the sanctions, whereas the head of the Russian military intelligence service, the GRU, was. So Bortnikov should be added.

I think we should also start going after their money. And people have argued for exposing the wealth of Putin and others. Some of that has already been done and it hasn't resonated inside Russia. I think what we need to do is to actually lop off some of the zeros in their bank accounts and then have them try to complain about losing millions, if not billions of dollars in ill-gotten gains and explain how they got that fortune in the first place.

WHITFIELD: So then, general, you know, John touched on this, Russia may be just buying time. I mean 21 more day before the swearing in of the next president. So, in your view, what would Russia's next move potentially be?

LT. GEN. MARK HERTLING (RET.), CNN MILITARY ANALYST: Well, let's take a look at this, Fredricka, from the standpoint of cyber warfare. Truthfully, Mr. Putin's action this morning play right into the game plan for what you do with cyber. There are three key words - mayhem, confusion and distrust. If you're using cyber, those are the things you want in the psychological domain to sew. You want to confuse the enemy. You want to make them have distrust in terms of what's going on. In this case, Mr. Putin had his defense minister go - come out and say, hey, we're going to expel folks, and then he came back as Santa Claus, Putin, and said -

WHITFIELD: Was that coordinated, in your view?

HERTLING: I'm sorry.

WHITFIELD: That was coordinated in your view?

HERTLING: Oh, I think - absolutely coordinated. It goes right into a cyber playbook. And then he comes out as Santa Claus Putin and says, oh, no, we're not going to do that. In fact, we're going to welcome children into the Kremlin and do great things. He's really done a couple of things, which is a very good military, I would say, statesman objective. He is playing toward Trump.

[14:10:07] And perhaps you haven't heard this, but Mr. Trump has a little bit of an ego, so he is playing to that ego. He is concerned about what might happen in the overt means of cyber warfare, what the U.S. might do for him, so he's backing off a little bit to see what occurs, how he can defend against it and then how he can counterattack.

And then he's also portraying himself as the more mature player in all this. He's not doing the tit for tat. He's trying to prove himself to be the hero in this action and pour more scorn on President Obama for taking this action. So he's playing, truthfully, one of the options I thought that he possibly would play when he was caught red-handed, as he has been doing for the last ten years in Europe in places like Estonia, Ukraine, and Poland.

WHITFIELD: All right, John, how do you see it?

NIXON: If I can - if I can add one thing to that.

WHITFIELD: Yes.

NIXON: I agree with both the previous speakers, but one thing also that I think Putin wants to do is by taking this sort of soft line, it can possibly exacerbate the differences and the tensions between the president-elect and the CIA. And that's something that he could eventually exploit to his benefit. And certainly I think from our standpoint, a wall of mistrust between the president and his intelligence community would be a very bad thing.

WHITFIELD: So, David, do you see that this potentially could undermine Donald Trump, particularly just three weeks away from his swearing in, even though next week he does say that he will be involved in intel briefings and at the same time Senator John McCain is saying he wants to begin hearings on this very matter.

KRAMER: Well, if you look at the reaction among some key Republicans in Congress, they have said that this is too little too late. In other words, they aren't saying that this step by Obama yesterday should not have been taken. They are arguing that it should have been taken much sooner and, in fact, much tougher. So the risk, I think that President-elect Trump faces when he assumes office is a growing divide between his views on Russia and his interests in buddying up and becoming pals with Putin and Republicans in Congress who do see Russia and Putin as a thread, the hacking as a major attack on the United States and the need for a much tougher position vis-a-vis Russia.

WHITFIELD: So, in other words, the pressure is on that Donald Trump, after swearing in, would have to take this further to satisfy all of those parties.

All right, David Kramer, John Nixon, General Mark Hertling, thanks so much, gentlemen, appreciate it.

KRAMER: Thank you.

NIXON: Thank you.

WHITFIELD: All right, next, was President-elect Trump boxed in on U.S./Russia relations just days before his inauguration as he and his advisers are saying? We'll have reaction from Mar-a-Lago.

Plus, protecting his legacy. New details on the president's plan to safeguard Obamacare. Can Democrats block a repeal by Republicans?

We're back in a moment.

(COMMERCIAL BREAK) [14:16:20] WHITFIELD: All right, welcome back. I'm Fredricka Whitfield.

The head of the House Homeland Security Committee says President Obama's sanctions against Russia for interfering with the 2016 election are, quote, "long overdue." Congressman Mike McCaul goes on to say in a statement, quote, "for many months, I have urged the administration to respond to the election-related hacks. I look forward to working with the incoming Trump administration to make sure that in the future our response to such aggression is timely, decisive and forceful enough to convince our adversaries not to do it again," end quote.

So let me turn now to CNN's Sunlen Serfaty in Palm Beach.

Good to see you, Sunlen.

So, President-elect Trump is spending the holiday there. McCaul and much of the Republican Party back President Obama's actions and do not question his reasons for doing it. But that's not the case for at least one top aide for Donald Trump. Talk to us about the former campaign manager and what she's saying.

SUNLEN SERFATY, CNN CORRESPONDENT: That's right, Fred, some pretty direct words from Kellyanne Conway, who, as you know, was former campaign manager, but also someone who stands ready to take over a top job in the incoming White House. And here she's really calling out the Obama administration for moving on these sanctions, suggesting that politics are at play here. Just really speculating that these sanctions were, in essence, a move to tie the hands of Donald Trump before he even becomes president on Russia policy and really an attempt to undermine his win in November. Here's what she said last night on CNN.

(BEGIN VIDEO CLIP)

KELLYANNE CONWAY, SENIOR ADVISER, TRUMP TRANSITION TEAM: Even those who are sympathetic to President Obama on most issues are saying that part of the reason he did this to today was to, quote, "box in" President-elect Trump. That would be very unfortunate if that were the - if politics were the motivating factor here. But we can't help but think that that's often true. Even "The New York Times" characterized it as such, that this may be an attempt to box him in to see what he'll do as president.

(END VIDEO CLIP)

SERFATY: Now, since these sanctions were put in place by the Obama administration yesterday, we have not heard that much from President- elect Donald Trump, who remains here at his resort in Florida. We only heard a really quick two-line statement from him yesterday. Notable in that statement he basically said it's time to move on and that really keeping in line with the posture that he's taken in recent days when asked for a response about these moves that were anticipated for quite a few days.

We do know, though, of course, Fred, that he will sit down at some point next week, likely in New York City, with intelligence officials to get a briefing, potentially presented with the evidence that they have, that they have reached this conclusion with confident that Russia is behind these hacks.

Fred.

WHITFIELD: All right, Sunlen Serfaty, thank you so much.

All right, let's dig a little deeper now. I have with me, CNN political commentator David Swerdlick. He is also an assistant editor at "The Washington Post, and CNN contributor Salena Zito, a reporter for "The Washington Examiner," and a columnist for "The New York Post."

Good to see both of you.

SALENA ZITO, CNN CONTRIBUTOR: Thank you.

WHITFIELD: All right, so, David, you first, is this about boxing in Donald Trump or is this more about President Obama getting things done in his last few days in office?

DAVID SWERDLICK, CNN POLITICAL COMMENTATOR: Well, it's probably a little bit of both, but for - for the Kellyanne Conway spin of Obama doing this to box in President-elect Trump, you have to accept the idea - which I don't - that President Obama had never taken aggressive action toward Russia previously. President Obama rallied our western allies in 2014 to impose very tight economic sanctions on Russia, which has hurt their economy, hurt their oil industry and those sanctions are ongoing in response to what the intelligence community says was meddling in our election, he's throwing on these additional sanctions that were announced yesterday.

[14:20:00] I think that President-elect Trump boxed himself in a bit, Fredricka, when - I think it was either two or three Sundays ago he was on Sunday shows sort of dismissing the intelligence community findings instead of saying what he could have easily said, which was, let's wait until all the facts are in. Instead he said, not much to it. Now he's sort of saying, let's move on with our lives. If he doesn't want to look weak on Russia or soft on Putin, he does at least have to hear this out and see how it plays out.

WHITFIELD: So, Salena, what do you think, did Donald Trump box himself in by dismissing intelligence, dismissing even what he said, you know, anything can be on computers?

ZITO: Well, you know, Trump has always shown to us throughout this campaign that he can be saying two completely different things at the exact same time and trying to make a point. So to me what he is saying by, you know, it's time to move on, he's saying that, you know, in terms of tying this Russian hack into the results of the election, it's time for the country to move on. I won. I won without the hack and let's put this behind us.

He's also telling us that he's not going to throw his intelligence community under the bus because he's meeting with them next week. I suspect he will craft a statement or, you know, come out and talk about it and saying, they're wonderful people. They're doing a great job. And, you know, and he'll combine them both and say, now it's time to move on from both. But I do not expect him to go against Congress and go against the Obama sort of executive order about the Russians. You know, he's going to accept it.

WHITFIELD: Oh, and, David, do you agree?

SWERDLICK: Fredricka, could I just respond to one thing?

WHITFIELD: Yes.

SWERDLICK: Yes, I do. Real quick, just to Salena's point. I agree with Salena that from the point of view of President-elect Trump, it does sort of sound like when he says let's move on, he's still sort of chafing at this idea that his election was tainted by Russian meddling. And, you know, he did win fair and square based on the facts that we know. The challenge, though, is that just because he won fair and square doesn't mean, a, that there was any meddling. And I don't think President Obama or anyone in government is actually claiming that the results were tainted in that sense, just simply that Russian action was taken and now our response is forthcoming.

WHITFIELD: Because his choice of words, Donald Trump's choice of words lately, whether it be via tweet or whether that, you know -

SWERDLICK: Yes.

WHITFIELD: That moment with Don King the other day. It's almost as if he's taking this very personally to acknowledge that there was any Russian involvement, acknowledging this intelligence, as opposed to looking at it in terms of a country, country security, meddling with democracy, instead is taking it very personally. How much of a problem is that going to continue to be if he doesn't accept intelligence? Doesn't accept, Salena, what the majority of Republicans on The Hill say they want to see happen next, more sanctions?

ZITO: Right, I think what's - right. What I think what's happening - we all know that Mr. - that President-elect Trump pays attention to social media, he pays attention to what's going on in the news media, even if he's not happy with everything that's said. And there have been a lot of pundits and there have been a lot of people that have insinuated that the two are wedded together. And so, yes, I think he does take it personally.

But I also think that this is a man that is - in the times that I've interviewed him, I've found to be incredibly curious and never having a problem with changing his mind, sometimes on the dime. I suspect it's going to be the same way about the intelligence community and I believe that you will see him within a week or so saying that he's on board, they're the greatest people in the world and he wants to move on from this.

WHITFIELD: Interesting.

SWERDLICK: (INAUDIBLE)

WHITFIELD: All right, also next week, while Senator McCain is, you know, pushing for those hearings on this Russia hacking, President Obama will be going to Capitol Hill next week. Perhaps a last-ditch effort to try to protect Obamacare. Remember, Donald Trump promised he would repeal and replace Obamacare right away. But with all of this now, you know, in - really taking center stage, David, do you see that that is far less a priority now for a Donald Trump after his swearing in?

SWERDLICK: No, I think it's a priority for the Trump administration and for Republicans in Congress to take some sort of action on the Affordable Care Act because they've been promising for so long that they would repeal and replace or at least amend or change or do something about it that their supporters say, you know, they want them to either get rid of it or modify it significantly.

What form that takes, though, I think, is where we get into the question mark, right? I mean the devil is in the details. If Republicans really move on the Affordable Care Act, what do they replace it with and how do they satisfy their constituents who, although they say they don't like the Affordable Care Act, tell poll after poll that they like certain key provisions of it. And I - that, I think, is what the president is going to discuss with his Democratic allies.

[14:25:14] WHITFIELD: And, Salena, what if the meat really isn't there in terms of what would replace Obamacare? If that promise cannot be met by a Donald Trump, what's at stake for him and his administration?

ZITO: Well, I think the smartest thing for Trump to do in terms of the Affordable Care Act is to do what Rahm Emanuel suggested to President Obama back when he was the chief of staff in 2009, is to do whatever he's going to do in piecemeal. Do it gradually. The American public is just used to us moving at a snail's pace and I think part of the problem with Obamacare is it was done so swiftly and it was such a big change that - and some of it did not turn out the way that they expected it to. I think the American people, especially a people that voted for him, would be satisfied with that approach. Part of their biggest problem with Obamacare is just the swiftness in which it happened.

WHITFIELD: And, David, is it really an issue of just rebranding?

SWERDLICK: So to Salena's point, I think politically Salena is right, a go-slow approach would probably help President-elect Trump. In terms of the math and the mechanics of how all the component parts of the Affordable Care Act work together, I think it will be a little bit bigger of a challenge for congressional Republicans and for President- elect Trump.

Tere's a reason why Republicans were sort of content to vote time after time in the House to repeal and replace knowing that they would be protected by either the Senate or a presidential veto. Now that they're responsible for any kind of fundamental change, rebranding is not just in theory, it's a real - it's a real thing.

WHITFIELD: All right, David Swerdlick and Salena Zito, thank you so much to both of you. Appreciate it.

ZITO: Thank you.

SWERDLICK: Thanks.

WHITFIELD: All right, up next, one day into the cease-fire deal in Syria between Russia, the Assad regime and rebels, the sides have agreed to put an end to the brutal war there, but will it hold? And later, two Russian compounds on U.S. soil have been effectively shut down with the Obama administration ordering all Russians to leave in the wake of the new sanctions. What goes on in those waterfront retreats? We will discuss.

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