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Trump's Inner Circle in Constant Contact with Russia; Senator McCain Responds to Russia Report; Netanyahu Arrives at the White House for Meeting with Trump; Aired 10:30-11a ET

Aired February 15, 2017 - 10:30   ET

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


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[10:32:33] JOHN BERMAN, CNN ANCHOR: Good morning, everyone. I'm John Berman.

POPPY HARLOW, CNN ANCHOR: I'm Poppy Harlow. So glad you're with us.

The head of U.S. Special Operations Command delivering a stunning and rare assessment of the political state of play. During a symposium in Maryland yesterday Army General Raymond Thomas said that the U.S. government is in unbelievable turmoil. He went on to say, "I hope they sort it out soon because we're a nation at war. As commander, I'm concerned about our government being as stable as possible."

BERMAN: And he's not the only one taking notice. Senator John McCain, who has had a somewhat rocky history with Donald Trump, said this.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), ARIZONA: I think there is significant dysfunction in the national security apparatus of the Trump administration. When you see that you don't know who's in charge, this Flynn situation, the whole environment is one of dysfunction in the Trump administration.

(END VIDEO CLIP)

BERMAN: I want to bring in CNN's political director David Chalian.

David, you know, Tony Thomas, John McCain, a lot of questions for the administration. When will we know and how will we know that this White House is in serious trouble? What signs are you looking for?

DAVID CHALIAN, CNN POLITICAL DIRECTOR: Well, define serious trouble. I would argue that they are already in some sort of trouble because they haven't been able to drive through their agenda items, the things that they want to tick through and accomplish, because it's clearly consuming all the oxygen, the distractions are, for them. So there's that kind of trouble. But when asked, serious trouble? Well, the one thing you're going to look for is when the bottom starts falling out, if it starts falling out, among their core supporters.

I mean, that's usually politically the place where presidents get hurt in a way that they have a very hard time returning. If Republicans, core base Trump supporters, all of a sudden start abandoning him, Republicans on Capitol Hill are going to be running for the doors from the administration real quickly as well. And that complicates those agenda items that I was talking about that they want to get through.

HARLOW: However, David, as Rebecca Berg mentioned on the program earlier this hour, until those approval numbers from Republicans for the president start going down, you're not going to see that pressure on people like Paul Ryan and some other Republican leadership to do that, to do things like call for a select committee to investigate Flynn, to do things like call for, like David Gergen said harkening back to Reagan, you know, a completely independent group, not including Sessions at all, to investigation all this. There is not the political pressure yet, is there?

[10:35:08] CHALIAN: I think that's probably true. There's not the political pressure from the base. There is some other political pressure. I mean, as John noted, yes, the history with John McCain and Donald Trump is indeed rocky. Lindsey Graham obviously no big Donald Trump fan either. But these are elder statesman of the president's party.

Remember, he was elected in part to break all this up, to disrupt this, to change the way things are done in Washington. It's a balance, though, about disruption versus chaos. And if the White House is consumed every day by questions about their own truthfulness, about warring factions, about dysfunction, they just aren't able to get out from their own way here.

And I will add this on the Russia story that I think is significant. Even if his base stays with him, there are probably enough members of his own party up on the Hill who do really believe, like Graham and McCain, and that may grow if revelations continue, who do really believe this has to be fully investigated. And if that's the case, it becomes the kind of daily story and drumbeat that the White House is going to have to put in an operation to handle just that story alone. That's not in place yet, as far as we can tell.

BERMAN: I was going to ask you that. Look, and John McCain, by the way, he also has an important job other than being a senator. He's the chairman of the Armed Services Committee. He can hold hearings. When you have hearings, when you have investigations, you simply do not know what the outcome can be, as many presidents have learned over time. It's different when it's your own party, but still it's a significant thing.

As for how the White House has been handling this, David, you just brought that up right there, you know, Sean Spicer yesterday -- I don't know if we have that sound, but Sean Spicer yesterday was asked by our old friend Jonathan Karl directly.

HARLOW: Yes.

BERMAN: If there had been any contacts with the campaign between the Trump campaign and the Russians, and Sean Spicer sort of dodged it. Let's play that right now. (BEGIN VIDEO CLIP)

JONATHAN KARL, ABC NEWS: Back in January, the president said that nobody in his campaign had been in touch with the Russians. Now, today, can you still say definitively that nobody on the Trump campaign, not even General Flynn, had any contact with the Russians before the election?

SEAN SPICER, WHITE HOUSE PRESS SECRETARY: My understanding is that what General Flynn has now expressed is that during the transition period -- well, we were very clear that during the transition period he did -- he did speak with the ambassador.

KARL: I'm talking about during the campaign.

SPICER: I don't have any -- there's nothing that would conclude me that anything different has changed with respect to that time period.

(END VIDEO CLIP)

BERMAN: David, that was eight hours before our big report came out. I mean, the White House is going to have problems if those are the answers that are given and the news keeps on contradicting it.

CHALIAN: Exactly. Now Sean Spicer is going to have to go out there at some point and correct the record, or at least say that they see the reports and they're looking into them. I mean, that is the other thing, is that -- as you know, in "The New York Times" story and our reporting, there is no evidence provided of a direct correlation between those conversations, those constant communications, and the DNC hack or the impact that the Russian government was looking to have on the U.S. election. But -- so that evidence doesn't exist.

But that to me begs the question then about, well, why won't the White House just come out and say, sort of put all the facts that they know out the table, everything that they have looked into? To me that's the challenge on Sean Spicer now, especially with those words out there.

HARLOW: Indeed. And we'll see. Let's hope, David Chalian, for everyone's sake, that the president is asked about this when he takes a few questions in that joint press conference with Netanyahu today.

BERMAN: What's your favorite color? Not questions like that.

(LAUGHTER)

BERMAN: I think there are some serious questions here.

HARLOW: Right.

BERMAN: David, great to see you.

HARLOW: All right. David, thank you very much.

Coming up for us, our Manu Raju, as he always does every morning for us, running around on Capitol Hill.

BERMAN: Yes.

HARLOW: Chasing down lawmakers to answer your questions. He just spoke with Senator John McCain, getting reaction to CNN's reporting that the Trump campaign had these regular constant communications with Russian officials before the election. He'll bring us that sound, next.

BERMAN: He may get another senator by the time the commercial is over.

HARLOW: You never know.

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[10:43:28] HARLOW: Moments ago on Capitol Hill, CNN caught up with Arizona Senator John McCain to get his reaction to the CNN reporting that during the campaign, the Trump administration was in constant communication with Russian officials.

Our Manu Raju joins us now from the Hill with more.

Look, this is the buzz of Capitol Hill this morning. What are you hearing?

MANU RAJU, CNN SENIOR POLITICAL CORRESPONDENT: Sorry, lost you there, Poppy.

HARLOW: Manu, I was just asking you, what are you hearing? I know, we're turning around the sound you had with John McCain, and we'll play that for our viewers in just a moment. But what's the overall reaction on Capitol Hill this morning to this new story?

RAJU: Yes. There's a lot of concern, not just from Democrats who you would expect to be concerned and very critical about how the Trump campaign appeared to have had contacts with Russian officials during the campaign, but also from Republicans as well. We had a chance to talk to a number of them, not just Senator McCain but also Senator Marco Rubio, Senator Cory Gardner, two Republicans who sit on the Foreign Relations Committee, which is meeting right now in the room right next to me, saying that there is a desire or need to get to the bottom of exactly what happened.

Marco Rubio, of course, is actually having dinner with Donald Trump tonight, but he says that everything that they are learning right now is something that the Intelligence Committee that he sits on really needs to explore very -- explore in detail. Now I asked Rubio, too, are you concerned that Donald Trump can get this right? Can he get past all this turmoil that is happening in his White House right now?

[10:45:02] And he did not say if he thought that could happen. In fact he said that he thinks that actually -- that perhaps this is more turbulent than any other new administration that we have been accustomed to. Now Senator McCain as well also raising a number of concerns. He

actually has supported calls for a bipartisan inquiry into Russia. Russia meddling in the past, that is something that a standalone panel that John McCain supports, that's something that actually the Senate Republican leaders and the House Republican leaders are resisting right now. They do not want to have a separate committee, instead they want to have this done in the standing committees of Congress including the House and Senate Intelligence Committee.

But McCain himself wants to have something separate, something that could have more prominence, something that could be independent of what is happening here on Capitol Hill. And we just got this sound from John McCain, where he talks about this in depth. Take a listen to what he had to say.

(BEGIN VIDEO CLIP)

RAJU: Do you think that anything that happened that current laws were broken during this period?

MCCAIN: I don't know. We only have the initial media reports of a very serious problem. We know that the Russians attempted to affect the outcome of our election. We know that, although we don't think they succeeded, but the latest information in the media requires questions to be answered.

RAJU: Do you think there's any evidence of coordination between the Trump campaign --

MCCAIN: Too early. I think it's too early. But it raises serious questions. And also my concern is also that with now no national security adviser, and the turmoil within the administration, it makes it very difficult for us to exercise the responsibilities to defend the nation. There's turmoil as far as national security is concerned.

(END VIDEO CLIP)

RAJU: Now one other piece of news, John McCain told me that he's leaning against supporting Mick Mulvaney to be the budget director. And if more than two Republicans vote against him, that could be enough to scuttle his nomination. That confirmation vote expected Thursday if they break a filibuster as soon as tonight -- John and Poppy.

BERMAN: Yes. John McCain may not get that White House social invite anytime soon based on some of his reaction.

HARLOW: But Marco Rubio having dinner tonight. That's interesting.

BERMAN: I didn't know. That was interesting.

Manu Raju, great to have you with us. Thanks so much.

All this is happening as the White House awaits the Israeli prime minister.

HARLOW: Right.

BERMAN: A news conference scheduled right ahead. We'll be right back.

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[10:51:31] BERMAN: All right. In just a short little bit, Israel's Prime Minister Benjamin Netanyahu arrives at the White House. This will be his first trip to the White House since the president took office. What's unusual is that minutes after the prime minister arrived they're going to hold a joint news conference.

HARLOW: Right. Before they actually have their meeting in private. It's going to be a major moment for a lot of reasons. Both the White House and Israel are facing turmoil right now.

Our Elise Labott joins us live in Washington. A number of issues on the agenda, primarily, though, Iran.

ELISE LABOTT, CNN FOREIGN AFFAIRS REPORTER: That's right, Poppy and John. Well, Iran is certainly the prime minister's number one priority, beating back Iran, not just on the nuclear issue but also countering Iran's other behavior in the region and trying to contain the fallout from the conflict in Syria where Hezbollah and Iran are using that territory possibly against Israel.

He also wants to get President Trump's help in terms of normalizing relations with his Arab neighbors, that's one of his many top priorities. But, you know, look, he also does not want to really talk about the two-state solution. And President Trump has talked about negotiating what he calls the ultimate deal and that he's going to put his son-in-law, Jared Kushner, in charge of that.

Now in recent days the administration has really been sending mixed messages on what that means. But, you know, even though this meeting is supposed to be really like a love fest, it's their first face-to- face encounter after eight years of what was really an acrimonious relationship between Netanyahu and President Obama, I think as they start to talk about issues of the peace process and what Trump might want to do and what he might need from Netanyahu in return, that relationship could grow tense pretty fast.

BERMAN: Elise Labott for us. We will wait that press conference. Thanks so much for that.

We'll be right back.

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BERMAN: Live pictures from the White House. President Trump meeting with retail CEOs.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: And we're going to around the room and we'll all introduce ourselves.

[10:55:03] Some of you I've read about on the covers of business magazines. And it's great to have you here. Thank you very much. I'm pleased to host all of you at the White House, the CEOs. You're some of the great CEOs of our country and the biggest of the retail industry, which is very important to the country in supporting millions and millions of jobs. Really one of the great job producers. Probably, would you say almost number one? Pretty close, right? It is number one.

There's a lot of confidence in our economy right now. There's a great confidence level. You've been seeing that in the stock market. You've been seeing that in businesses. And you've been seeing that on every chart that's taken. There's evidence also by the jobs report that just came out for January, 227,000 jobs added.

And my administration remains very focused on the issues that will encourage economic growth. That's what we're all about. We have a lot of plans moving back into various states, including the state of Ohio, the state of Michigan, Pennsylvania. We have a lot of companies moving back in, coming back into the country, bringing the jobs with them.

We're cutting regulations big league. We are really cutting them by massive amounts. The auto industry just left a week ago, they were here in the same room. And they are very happy with what we're doing. And everyone is. I think just about everyone. The financial industry, we're having a lot of different industries in. And we're cutting regulations in just about every industry. In fact I can't think of any that we're not.

If I do, we have a major story, OK? Because I think just every industry we're cutting, some more than others. You have a very, very big regulatory problem and we're going to take care of that because I want more jobs. We're doing that because we want more jobs. As you know, the overregulation costs our economy an estimated $2 trillion a year, which is incredible. $2 trillion. And it costs your businesses a lot of money, tremendous amounts of money, and time.

I've taken executive action to create a permanent structure of regulatory reduction by creating one-on-one. So basically for every one regulation, two are out. So we knock out two. So we put in one, but to put in one you have to knock out two. That's the least of it but it's an important symbol.

In addition to reducing government regulations, we'll also reform our tax code to help middle income families and American businesses grow and thrive. And tax reform is one of the best opportunities to really impact our economy. So we're doing a massive tax plan. It's coming along really well. It will be submitted in the not too distant future. And it will be not only good and simpler, it will be -- you're talking about big numbers of savings.

And we're talking also middle income and very much for business. And the business is for middle income because you're going to employ a lot of people. So we hope you're going to do that. We're going to provide tax relief for families. We're going to simplify very greatly the tax code. It's too complicated. We're going to bring down the number of alternatives. And I think it's going to be just a much, much simpler tax code. In fact H&R Block probably won't be too happy. That's one business that might not be happy with what we're doing. Other than H&R Block, I think people will love it.

We're going to lower the rates very, very substantially for virtually everybody, in every category, including, including personal and business.

And I just want to go around the room. I'd like you to introduce yourselves. And then I'll tell you a little bit more and you're going to tell me what you're looking for. But we want jobs. We want jobs brought back to the country. We want them brought back fast. We want you to expand your stores. And you'll tell me why you will or why you won't, and tell me why you won't, we'll tell you a little bit, right? Vice President Mike Pence. So go ahead.

JILL SOLTAU, PRESIDENT AND CEO, JO-ANN STORES: All right. I'm Jill Soltau. I'm with Jo-Ann and Craft Stores.

TRUMP: Good. Good.

ART PECK, CEO, GAP INC.: Art Peck with the GAP.

TRUMP: Good. Very good.

HUBERT JOLY, CEO, BEST BUY: Hubert Joly with Best Buy.

BILL RHODES, CHAIRMAN, PRESIDENT, AND CEO, AUTOZONE: I'm Bill Rhodes of AutoZone.

BRIAN CORNELL, CHAIRMAN AND CEO, TARGET: Brian Cornell with Target.

TRUMP: Tar-jay, right?

CORNELL: Thank you.

STEFANO PESSINA, CEO, WALGREENS BOOTS ALLIANCE: Stefano Pessina, Walgreens Boots Alliance.

GREG SANDFORT, PRESIDENT AND CEO, TRACTOR SUPPLY COMPANY: Greg Sandfort with Tractor Supply.

TRUMP: Yes.

MARVIN ELLISON, CHAIRMAN AND CEO, J.C. PENNEY: Marvin Ellison with J.C. Penney.

TRUMP: Right.

HARLOW: All right. So there you have it, the president meeting with major retail CEOs, talking about border taxes, also talking about job creation, saying if you don't create some jobs, you're going to hear from us. There you have it.

Thank you for joining us today. I'm Poppy Harlow.

BERMAN: I'm John Berman. "AT THIS HOUR WITH KATE BOLDUAN" starts right now.