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Rocky First Call between Trump and Australia's Prime Minister; Reports: High Civilian Casualties in Yemen Raid; Trump Speaks At National Prayer Breakfast; Trump: "Freedom Of Religion Is A Sacred Right"; Trump: U.S. Has "Most Generous Immigration System". Aired 9- 9:30a ET

Aired February 2, 2017 - 09:00   ET

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


[09:00:00] CAROL COSTELLO, CNN ANCHOR: I'm Carol Costello. Thanks so much for joining me.

The Trump White House rattling nerves among friends and foes alike as America's foreign policy takes on a more combative tone.

We are closely watching two live events also this hour. On the left side of your screen, President Trump attends the National Prayer Service in Washington. He is expected to speak any moment. When he takes to the podium, of course, we'll take you there live to the Hilton in Washington, D.C.

At the bottom of the hour, Trump's new Secretary of State, Rex Tillerson, will speak to a crowd of employees at the State Department. The agency has been rocked by dissent and resignations over Trump's new policies like that travel ban, and the diplomatic tension is only growing.

Today, we have more details on the President's newest clashes with important allies, Australia and Mexico, and that nuclear deal partner, Iran.

And there are reports of high civilian casualties in the Yemen raid that killed a U.S. Navy SEAL. It was the first counterterrorism mission ordered by the new Commander-in-Chief. Today, we know much more about what went wrong.

We are covering a lot this morning, of course, all the developments. It's very busy, but let's begin with the newest diplomatic concerns. CNN's Jeff Zeleny at the White House with that.

Hi, Jeff.

JEFF ZELENY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Hey, good morning, Carol. Secretary of State Rex Tillerson, certainly, is getting a full agenda here as he is now confronting with what President Trump dealt with last week with world leaders, these courtesy calls turned confrontational.

(BEGIN VIDEOTAPE)

ZELENY (voice-over): New tension between President Trump and a major U.S. ally. Sources say the President grew angry during a phone call with Australia's Prime Minister last Saturday, President Trump calling the Australian refugee agreement a "very bad deal." That resettlement deal reached by the Obama administration will transfer refugees currently living in detention centers on islands off of Australia to the U.S.

HON. MALCOLM TURNBALL, PRIME MINISTER OF AUSTRALIA: I'm not going to comment on the conversation.

ZELENY (voice-over): Prime Minister Turnbull repeating to President Trump that according to the deal, nearly 1,300 refugees have to pass U.S. screening requirements. But sources say Mr. Trump kept insisting it was a very bad deal, remarking one of these refugees will be the next Boston bomber.

TURNBALL: I always stand up for Australia in every forum.

ZELENY (voice-over): The Prime Minister saying the conversation ended courteously, but a source says President Trump abruptly ended the call. Notably, the read out of the call provided by the White House on Saturday showed no sign of a contentious meeting, instead saying, "Both leaders emphasized the enduring strength and closeness of the U.S.-Australia relationship."

As news of the contentious call broke on Wednesday, Mr. Trump tweeted, "I will study this dumb deal," in the same tweet calling the refugees, illegal immigrants. But White House Press Secretary Sean Spicer confirming the deal will ultimately go through.

SEAN SPICER, WHITE HOUSE PRESS SECRETARY: The President, in accordance with that deal, to honor what had been agreed upon by the United States government and in ensuring that that vetting will take place in the same manner that we're doing it now, will go forward.

ZELENY (voice-over): And more on yet another diplomatic dust-up with a U.S. ally, after the Mexican President canceled their in-person meeting. CNN is learning President Trump offered to help Mexican President Enrique Pena Nieto with drug cartels in Mexico during their Friday phone call.

According to an excerpt of the transcript provided to CNN, Mr. Trump said, "You have some pretty tough hombres in Mexico that you may need help with. We are willing to help with that big league, but they have to be knocked out and you have not done a good job knocking them out."

Meantime, national security advisor Michael Flynn offering a stark warning to Iran after their recent ballistic missile test launch.

LT. GEN. MICHAEL FLYNN (RET), UNITED STATES NATIONAL SECURITY ADVISER: Iran is now feeling emboldened. As of today, we are officially putting Iran on notice.

ZELENY (voice-over): "On notice" has some lawmakers worried the administration will dismantle the Iran nuclear deal.

SEN. ANGUS KING (I), MAINE: I hope that it doesn't include trying to undo the nuclear deal. I think that would be a grave mistake. But we'll have to just wait and see what General Flynn meant.

ZELENY (voice-over): As others call for a collaboration on policies.

SEN. BEN CARDIN (D), MARYLAND: I think the Trump administration needs to work with Congress.

(END VIDEOTAPE)

ZELENY: Again, Carol, this is something that is certainly going to be in the inbox for new Secretary of State, Rex Tillerson, who is going to be addressing his employees at the State Department later this hour.

But we are still watching for the President who will be speaking any time at the National Prayer breakfast. And that is a bipartisan gathering of Republicans and Democrats. All presidents go to it. But, of course, a lot of the President's supporters, the evangelicals that brought him here to the White House, are eager to see their new President, Carol.

COSTELLO: Yes. Interestingly enough, right now, Mark Burnett, the film and T.V. producer, is making a speech, and he's going to introduce the President of the United States, Mr. Donald Trump. And he's known for, you know, being the executive producer of "The Apprentice," and "Are You Smarter Than a 5th Grader?"

He was part of "Shark Tank" and, of course, he did that very popular miniseries, "The Bible," right? Very religious person. He's married to Roma Downing. She was in "Touched by an Angel."

ZELENY: Right.

[09:05:03] COSTELLO: So he is making his speech right now. And as you mentioned, this prayer breakfast is designed to be a sort of forum for the political, social, and business elites to assemble and build relationships. So what do you expect the tone of the President's speech to be?

ZELENY: Well, Carol, I think the tone of the President's speech, certainly, will be different than the tone he that had in some of those conversations and phone calls with foreign leaders. I think it will be very grateful, and he will be reaching out.

And again, there are a lot of Democrats in that audience as well, a lot of Senators. This is one of those rare moments in Washington, and there really are not that many of them, where people from both sides of the aisle, Republicans and Democrats, Independents and others, come together at this National Prayer breakfast.

I am told it will be, you know, a bipartisan tone, a gracious tone. But interestingly, the President met with Mark Burnett yesterday here at the White House, a private meeting as well. And he is there introducing him as you said, Carol.

COSTELLO: Exactly. But, you know, the past few days have been so contentious, especially between Republicans and Democrats on Capitol Hill. So I think that Democrats, at least, are very curious to see if Donald Trump will speak in a conciliatory tone.

ZELENY: Sure. I think they're always wondering that. But, you know, at this setting, at this National Prayer breakfast, I am told by an administration official that the President is not going the use this speech as an attempt to unveil any new policies or proposals. He's going to thank some people in the room and, again, show his leadership.

Now, as President, he has to do several things at one time, of course. And I would not be at all surprised if some of those Democratic senators he is meeting with this morning or seeing this morning, if he may ask them for their support for his Supreme Court nominee. That seems like it's been a long time ago, Carol, but only a couple days ago he made that nomination.

But that is something that really is next up here in Washington, will his nominee be confirmed? So the President, whenever he is in these settings, coming face-to-face with Democrats, he can certainly use this as an opportunity to, you know, perhaps try and convince them or persuade them or twist an arm or two.

COSTELLO: OK. We'll have to wait because Mark Burnett's introduction apparently is a long one.

ZELENY: OK.

COSTELLO: So let's turn our attention to another potential diplomatic hit to U.S. diplomacy. Reports of high civilian casualties in the anti-terror raid in Yemen that left one U.S. Navy SEAL dead. CNN's Ryan Browne is at his post at the Pentagon. He has more information about that raid.

Good morning.

RYAN BROWNE, CNN PENTAGON REPORTER: Good morning, Carol. That's right. Reports came in last night from the U.S. military, saying that there was indeed a high likelihood that civilian casualties did occur during what's called the site exploitation mission, which is an attempt to gather intelligence on al Qaeda in Yemen.

The mission kind of went awry in a few ways. The Navy SEALs and their UAE Special Forces allies were detected by the al Qaeda fighters there, despite using a moonless night as some cover, which is actually why the operation took place under Donald Trump's presidency even though it was planned during the Obama administration.

Now, this is an intense firefight featuring small arms, grenades, heavy weapons, and air strikes. And one of those air strikes against a building where the Navy SEALs were taking fire from was likely the source of some of these civilian casualties. Now, reports on the ground put that north of a dozen.

The military is still conducting its formal investigation, its formal assessment, and we're waiting on that as well. But it's a high likelihood that there were civilian casualties during this operation, which also saw a Navy SEAL fatally wounded, three additional SEALs wounded, three other service members injured when their aircraft, a MV-22 Osprey, crashed in an attempt to rescue the wounded. That aircraft was subsequently destroyed in a U.S. air strike.

Now, officials, obviously, are not happy about how things went down. However, they are saying that information gleaned during the raid, including computer hard drives on al Qaeda, is already providing intelligence on the terror group, helping the U.S. military and intelligence services prevent future terrorist attacks down the road against the U.S. and its allies.

Now, this group is considered one of the most formidable of the al Qaeda affiliates, having directed the attacks in 2015 against the Charlie Hebdo newspaper offices. So gaining this intelligence was considered an objective desirable enough to take the risk of putting boots on the ground, Carol.

COSTELLO: There are some pretty grisly pictures released of the civilians that were killed, including pictures of dead children. Those are now online. And I know that's a concern because ISIS uses those kinds of pictures for propaganda reasons.

BROWNE: That's right. And I think one of the things -- the military is still conducting its assessment, but there were local reports on the ground, and the military has acknowledged, that there is a likelihood that children were killed. And this is something that, of course, could feature in the propaganda.

[09:10:06] Now, the military pushes back a little bit, saying, you know, it's typical for al Qaeda and ISIS to use human shields, and that they keep children and families close to them in order to kind of provide a little bit of a human shield in order to try and deter the United States from conducting an operation. But, clearly, U.S. intelligence, at the time, was not aware that these children were there and that these family members were there. So the investigation is ongoing, but it's definitely something of concern.

COSTELLO: All right. Ryan Browne, thanks for your reporting. So we've got a lot to discuss.

With me right now is Democratic Senator Sheldon Whitehouse of Rhode Island. Welcome, sir.

SEN. SHELDON WHITEHOUSE (D), RHODE ISLAND: Good morning, Carol.

COSTELLO: Good morning. So President Trump will speak at the National Prayer breakfast at any moment now. What do you expect to hear from him?

WHITEHOUSE: I have no idea. This has been the most rash, reckless gong show of a new presidency that anybody has ever seen. He could go anywhere and do anything and offend anyone.

COSTELLO: Sir, the President is speaking right now. I hope you'll stand by. Let's listen.

(BEGIN VIDEOTAPE) DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Thank you, Mark. So nice.

(APPLAUSE)

TRUMP: Thank you very much. Thank you.

(APPLAUSE)

TRUMP: Thank you very much. It's a great honor to be here this morning, and so many faith leaders -- very, very important people to me -- from across our magnificent nation, and so many leaders from all across the globe.

Today, we continue a tradition begun by President Eisenhower some 64 years ago. This gathering is a testament to the power of faith and is one of the great customs of our nation. And I hope to be here seven more times with you.

(APPLAUSE)

TRUMP: I want very much to thank our co-chair, Senator Boozman and Senator Coons and all of the congressional leadership. They're all over the place. We have a lot of very distinguished guests. And we have one guest who was just sworn in last night, Rex Tillerson, Secretary of State.

(APPLAUSE)

TRUMP: Going to do a great job.

(APPLAUSE)

TRUMP: Some people didn't like Rex because he actually got along with leaders of the world. I said, no, you have to understand, that's a good thing. That's a good thing, not a bad thing. He's respected all over the world, and I think he's going to go down as one of our great, great secretaries.

We appreciate it. Thank you. Thank you, Rex.

(APPLAUSE)

TRUMP: Thank you as well to Senate Chaplain Barry Black for his moving words. And I don't know, Chaplain, whether or not that's an appointed position? Is that an appointed position?

I don't even know if you're Democrat or if you're Republican, but I'm appointing you for another year. The hell with it.

(APPLAUSE)

TRUMP: And I think it's not even my appointment. It's the Senate's appointment, but we'll talk to them. Your son is here. Your job is very, very secure, OK?

(LAUGHTER)

TRUMP: Thank you, Barry. Appreciate it very much.

I also want to thank my great friend, Roma. Where is Roma? Beautiful Roma Downey. The voice of an angel.

She's got the voice -- every time I hear that voice, it's so beautiful. Everything is so beautiful about Roma, including her husband, because he's a special, special friend. Mark Burnett, for the wonderful introduction, so true. So true.

I said to the agent, I'm sorry. The only thing wrong -- I actually got on the phone and fired him myself because he said you don't want to do it, it will never work. It will never, ever work, you don't want to do it. I said, listen.

But I really fired him after it became the number one show. It became so successful and he wanted a commission, and he didn't want to do the show.

(LAUGHTER)

TRUMP: That's when I really said it. But we had tremendous success on "The Apprentice." And when I ran for President, I had to leave the show. That's when I knew for sure I was doing it.

And they hired a big, big movie star, Arnold Schwarzenegger, to take pace my place, and we know how that turned out. The ratings went right down the tubes. It's been a total disaster. And Mark will never, ever bet against Trump again. And I want to just pray for Arnold, if we can, for those ratings, OK?

(LAUGHTER)

TRUMP: But we've had an amazing life together, the last 14, 15 years, and an outstanding man. And thank you very much for introducing me. Appreciate it. It's a great honor.

(APPLAUSE)

[09:15:01] TRUMP: I also want to thank my dear friend, Vice President Mike Pence, who has been incredible.

(APPLAUSE)

TRUMP: And incredible wife, Karen. And every time I was in a little trouble with something where they were questioning me, they'd say, but he picked Mike Pence. So he has to know what he's doing. And it's true. He's been, you know, on the scale of zero to 10, I rate him a 12. OK? So, I want to thank you. Thank you very much, I appreciate it.

But most importantly today, I want to thank the American people. Your faith and prayers have sustained me and inspired me through some very, very tough times. All around America, I have met amazing people whose words of worship and encouragement have been a constant source of strength. What I hear most often as I travel the country are five words that never ever fail to touch my heart. That's "I am praying for you." I hear it so often. I am praying for you, Mr. President.

No one has inspired me more in my travels than the families of the United States military, men and women who have put their lives on the line every day for their country and their countrymen. I just came back yesterday from Dover Air Force base to join the family of Chief William Ryan Owens as America's fallen hero was returned home, very, very sad but very, very beautiful, very, very beautiful.

His family was there, incredible family, loved him so much. So devastated, he was so devastated, but the ceremony was amazing. He died in defense of our nation. He gave his life in defense of our people. Our debt to him and our debt to his family is eternal and everlasting. Greater love has no man than this. That a man laid down his life for his friends. We will never forget the men and women who wear the uniform. Believe me. Thank you.

From generation to generation their vigilance has kept our liberty alive. Our freedom is won by their sacrifice and our security has been earned with their sweat and blood and tears. God has blessed this land to give us such incredible heroes and patriots. They are very, very special. And we are going to take care of them.

Our soldiers understand that what matters is not party or ideology or creed, but the bonds of loyalty that link us all together as one. America is a nation of believers. In towns all across our land, it's plain to see what we easily forget, so easily we forget this, that the quality of our lives is not defined by our material success, but by our spiritual success.

I will tell you that, and I tell you that from somebody that has had material success and knows tremendous numbers of people with great material success, the most material success. Many of those people are very, very miserable, unhappy people. And I know a lot of people without that, but they have great families, they have great faith. They don't have money, at least not nearly to the extent and they're happy. Those to me are the successful people, I have to tell you.

[09:20:01] I was blessed to be raised in a churched home. My mother and father taught me that to whom much is given, much is expected. I was sworn in on the very bible from which my mother would teach us as young children. And that faith lives on in my heart every single day. The people in this room come from many, many backgrounds.

You represent so many religions and so many views. But, we are all united by our faith in our creator and our firm knowledge that we are all equal in his eyes. We are not just flesh and bone and blood. We are human beings with souls. Our republic was formed on the basis that freedom is not a gift from government, but that freedom is a gift from God.

It was the great Thomas Jefferson who said, the God who gave us life gave us liberty. Jefferson asked can the liberties of a nation be secured when we have removed a conviction that these liberties are the gift of God. Among those freedoms is the right to worship according to our own beliefs. That is why I will get rid of and totally destroys the Johnson amendment and allow our representatives of faith to speak freely and without fear of retribution. I will do that. Remember.

Freedom of religion is a sacred right, but also a right under threat all around us. And the world is under serious, serious threat in so many different ways. And I've never seen it so much and so openly since I took the position of president. The world is in trouble, but we're going to straighten it out. OK? That's what i do, I fix things. We're going the straighten it out. Believe me.

When you hear about the tough phone calls I'm having, don't worry about it. Just don't worry about it. They're tough. We have to be tough. It's time we're going to be a little tough, folks. We're taken advantage of by every nation in the world virtually. It's not going to happen anymore. It's not going to happen anymore.

We have seen unimaginable violence carried out in the name of religion, acts of wanton -- this minorities, horrors on a scale that defy description. Terrorism is a fundamental threat to religious freedom. It must be stopped and it will be stopped. It may not be pretty for a little while. It will be stopped.

We have seen -- and by the way, general as you know James "Mad Dog" shouldn't say it in this room, Mattis. Now, there's a reason they call him "Mad Dog Mattis", never lost a battle, always wins them and always wins them fast. He's our new Secretary of Defense. We'll be working with Rex. He's now in South Korea, going to Japan, going some other spots. I'll tell you what. I've gotten to know him really well. He's the real deal. We have somebody who's the real deal working for us and that's what we need. So, you watch. You just watch. Things will be different.

We have seen peace loving Muslims, brutalized, victimized, murdered and oppressed by ISIS killers. We have seen threats of extermination against the Jewish people. We have seen a campaign of ISIS and genocide against Christians where they cut off heads. Not since the Middle Ages have we seen that. We haven't seen that, the cutting off of heads.

Now, they cut off the heads, they drown people in steel cages, haven't seen this, haven't seen this. Nobody has seen this for many, many years.

[09:25:00] All nations have a moral obligation to speak out against such violence. All nations have a duty to work together to confront it and to confront it viciously if we have to. So I want to express clearly today to the American people that my administration will do everything in its power to defend and protect religious liberty in our land.

America must forever remain a tolerant society where all faiths are respected and where all of our citizens can feel safe and secure. We have to feel safe and secure. In recent days we have begun to take necessary action to achieve that goal. Our nation has the most generous immigration system in the world, but these are those and there are those that would exploit that generosity to undermine the values that we hold so dear. We need security. There are those who would seek to enter our country for the purpose of spreading violence or repressing other people based upon their faith or their lifestyle. Not right.

We will not allow a beachhead of intolerance to spread in our nation. You look all over the world and you see what's happening. So in the coming days we will develop a system to help ensure that those admitted into our country fully embrace our values of religious and personal liberty and that they reject any form of oppression and discrimination. We want people to come into our nation, but we want people to love us and to love our values, not to hate us and to hate our values.

We will be a safe country, we will be a free country, and we will be a country where all citizens can practice their beliefs without fear of hostility or fear of violence. America will flourish as long as our liberty, and in particular our religious liberty is allowed to flourish. America will succeed as long as our most vulnerable citizens and we have some that are so vulnerable, have a path to success. And America will thrive as long as we continue to have faith in each other and faith in God.

That faith in God has inspired men and women to sacrifice for the needy, to deploy to wars overseas and to lock arms at home to ensure equal rights for every man, woman and child in our land. It's that faith that sent the pilgrims across the oceans, the pioneers across the plains and the young people all across America to chase their dreams. They are chasing their dreams. We are going to bring those dreams back. As long as we have God, we are never, ever alone, whether it's the soldier on the night watch or the single parent on the night shift, God will always give us solace and strength and comfort. We need to carry on and to keep carrying on. For us here in Washington, we must never, ever stop asking God for the wisdom to serve the public according to his will. That's why -- thank you.

That's why President Eisenhower and Senator Carlson had the wisdom to gather together 64 years ago to begin this truly great tradition, but that's not all they did together. Let me tell you the rest of the story, just one year later, Senator Carlson was among the members of congress to send to the President's desk a joint resolution that added "Under God" to our pledge of allegiance. It's a great thing. Because that's what we are and that is what we will always be, and that is what our people want, one beautiful nation under God.

Thank you, God bless you and God bless America. Thank you very much. Thank you. Thank you.

CAROL COSTELLO, CNN: All right, you just heard President Donald Trump address the crowd at the (Felton) in Washington D.C.