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Source: Possible Breakthrough In Health Care Talks; Price: Everyone Should Have Health Insurance; Judge Criticized By Trump To Hear Key Deportation Case; China on High Alert; USS Vinson Nears Koreas; Military Maneuvers Underway; Breakthrough on Health Care Talks. Aired 1-1:30p ET

Aired April 20, 2017 - 13:00   ET

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

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[13:00:17] WOLF BLITZER, CNN ANCHOR: Hello, I'm Wolf Blitzer. It's 1:00 p.m. here in Washington, 9:30 p.m. in Tehran and 1:30 a.m. Friday at Pyongyang. Wherever you're watching from around the world, thanks very much for joining us.

We're tracking developments on several front s right now from the tension with North Korea to a surprising twist involving a federal judge here in the United States criticized by President Trump for being, "Mexican." But we begin with a possible, I repeat, possible breakthrough in the move to try to resuscitate health care reform here in the United States. A source says the breakthrough is in discussions between the Conservative Freedom Caucus and House moderates.

On another front, Republican Congressman Tom Cole of Oklahoma sums it up this way. "Differences have narrowed and this thing is very much alive." House Republicans will talk legislative priorities on a conference call this Saturday. We've now learned, we would expect health care repealing and replacing Obamacare the effort to revive that legislative effort to be one of those topics.

Our national politics reporter MJ Lee is joining us now with details. MJ, walk us through the behind the scene efforts under way right now to revive this health care reform.

MJ LEE, CNN NATIONAL POLITICS REPORTER: Well, Wolf, what we are seeing is some potential movement on health care. What we know is that leaders of the Tuesday group and the House Freedom Caucus have been talking throughout the Easter recess to see if they can get to an agreement so that they can revive the health care bill that failed about a month ago.

Now, sources tell us that they have largely been talking about the issue of whether some states can opt out of certain insurance regulations and also something to calm the nerves of nervous moderates. Moderates have been urging other colleagues to make sure that some protections in Obamacare, including protections for people with pre-existing conditions, that those are preserved. So these are the conversations that are happening right now. And as you mentioned, there is a House wide conference call expected to take place on Saturday. This is a call that often takes place as members are coming back from recess. So, it is a potentially busy weekend as members prepared to come back to Washington after the Easter recess.

BLITZER: Some Republican lawmakers, as you know MJ, they're optimistic and others are remaining deeply skeptical. What are their main concerns right now because the timing seems awkward?

LEE: That's right. We are seeing a range of reactions. I spoke to Congressman Tom Cole earlier today and he said that the members that he has been speaking with, and he as a supporter of the bill I should say, that they sound cautiously optimistic. But he did note that leadership in particular, that they are weary of moving too fast and basically putting a bill forward that they know would not necessarily have the 216 votes.

And I have to say the reality, Wolf, right now is that the deep division that exists in the House conference between the moderates and the conservatives, those divisions are still there. We have some conservative members who have said that they simply will not accept anything less than a full repeal of Obamacare and then there are the moderates who are weary of taking away some of the protections in Obamacare, so these conversations need to continue and these differences need to be hashed out before we potentially see a vote anytime in the near future.

BLITZER: Very quickly, MJ, assuming they're trying to get a vote before the 100-day mark of the Trump presidency comes up, will the Congressional Budget Office, for example, have enough time to score or report on how much this revised legislation would actually wind up costing and what its impact would be and how many millions of Americans might lose their health insurance?

LEE: Yes. There are certainly many obstacles for such a quick turn around. And no word yet from Hill sources on whether we would see a new CBO report. But the other thing to keep in mind, Wolf, about next week is that Congress is going to be very much focused on funding the government next week and it's unclear that especially for some of these Republican lawmakers who have these open wounds still (ph) from the fact that this bill failed a month ago it's unclear whether they want to spend the energy, the time and the political capital to once again take a stab at health care.

So again, unclear if this is going to be something that we actually see in full action next week. We will let you know if we get any further reporting on this.

BLITZER: It will be interesting to see if they do have a vote before the Congressional Budget Office to come up with a final report. MJ Lee, thanks for the reporting.

The Health and Human Services Secretary Dr. Tom Price would have to oversee the rules resulting from any changes to health care here in the United States. Our chief medical correspondent Dr. Sanjay Gupta met with Secretary Price this week to discuss some of the proposed changes in the health care law. Listen to this.

(BEGIN VIDEOTAPE)

SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: So let's get down to some of the numbers then, because one of the things that's different about these tax credits is that they are not income based. They are age based.

[13:05:06] Why do I need, as someone who makes over $100,000 a year, why do I need the same tax credit as a guy who's making $20,000 a year?

DOCTOR TOM PRICE, HHS SECRETARY: The tax code ought to be agnostic as to where you earn your coverage.

GUPTA: Still. Why not income based versus age based? Why do I need the same tax credit as someone who's living near the poverty line?

PRICE: Yes. And, in fact, as you may know, that's the way that the bill they worked on years before defined the tax credit based it on income. But when I looked at the folks who said to -- how you ought to provide this is that income is not a determinant of health status. In fact -- or the cost of the coverage that one receives.

(END VIDEOTAPE)

BLITZER: Dr. Gupta is joining us to talk a little bit more about his interview with Secretary Price. Sanjay, what does Dr. Price see as the best way to keep people from falling through the cracks of any new Republican backed health care law?

SANJAY: Well, it seems what he's most focused on is making, you know, health care plans as affordable as possible for people so they buy and have more choice and can afford a lower priced plan. The concern is, and this is something that came up in the interview, is that you can create a plan that's very, very cheap, but it really is not doing anything for you. These so-called skinny plans, for example, you have health insurance, but it doesn't cover inpatient care for example.

So if you get in an accident or you get some illness, it may not cover what is the most crucial part of your hospitalization. So, yes, he wants to get people covered, but the real -- and that's how he says he's going to keep people from falling through the cracks. The question is, are they going to be good enough plans when someone actually needs it.

BLITZER: Dr. Sanjay Gupta reporting for us. Sanjay, thanks. As usually, we're also following another looming battle for the White House. This one with an ironic twist. The federal judge Gonzalo Curiel, the very judge President Trump repeatedly criticized during the presidential campaign has now been assigned a very high profile deportation case.

Remember, when candidate Trump called Judge Curiel a hater, questioned his Mexican heritage while he was hearing a lawsuit against Trump University. Trump then defended the racially charged attack right here on CNN.

(BEGIN VIDEOTAPE)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I have had horrible rules. I've been treated unfairly by this judge. Now, this judge is of Mexican heritage. I'm building a wall, OK, I'm building a wall.

I am going to do very well with the Hispanics. The Mexicans --

JAKE TAPPER, CNN CHIEF WASHINGTON CORRESPONDENT: So no Mexican judge could ever be involved in a case that involves you?

TRUMP: No, he's a member of a society where, you know, very pro Mexico and that's fine. It's all fine. But I think.

TAPPER: Except that you're calling into question --

TRUMP: I think he should recuse himself.

(END VIDEOTAPE)

BLITZER: That exchange with our Jake Tapper. Judge Curiel was born in Indiana by the way.

CNN's Jessica Schneider is joining us from here Washington. Rosa Flores is joining us from Chicago. Jessica, President Trump's comments were described at the time by the House Speaker Paul Ryan as textbook racism and now they're back in the spotlight. Up date us on the latest.

JESSICA SCHNEIDER, CNN CORRESPONDENT: Yes. You know, Wolf, you said it at the controversy and the backlash over then candidate Trump's remark were wide ranging at the height of the campaign. It was Speaker Ryan, Majority Leader Mitch McConnell, even stunt Trump ally Newt Gingrich, calling the comments inexcusable. So let me break it down for you.

Donald Trump, those comments now back at forefront, he first began his rant t what unexpectedly in May, 2016, calling Judge Curiel biased, hostile and then made the leap to say that Judge Curiel was being unfair because he was Mexican, even though Judge Curiel was actually born in Indiana. Candidate Trump reasoned that since he wanted to build a wall with Mexico if he became president which of course he did, Judge Curiel would be biassed and therefor can do his job as a federal judge. And that when he was pressed by our Jake Tapper who asked isn't the definition of racism saying someone can't do their job because of their race, Donald Trump replied, no, I don' think so at all.

Well at that time, Judge Curiel was presiding then over the class action Trump university fraud case, that case settled in January. But now Judge Curiel will handle this high profile immigration case. At this point, though Wolf, it is just dealing with some demands for disclosure from immigration officials, but we'll see if this time around President Trump unleashes yet again. We'll see. BLITZER: Well, Rosa, tell us a little bit more about the case that Judge Curiel will be overseeing right now, what it could mean for the President's immigration crackdown.

ROSA FLORES, CNN CORRESPONDENT: Well, this lawsuit is a FOIA lawsuit, Wolf. And so, it's over the dispute of the release of deportation processing documents. I'm going to give you the background. The dreamer involved here is a 23 year-old Juan Manuel Montes Bojorquez. He claims that he was wrongfully departed on February 18th, but DHS says that they do not have any record of that happening.

[13:10:02] And so, what his attorneys are asking the federal government to do is to turn over those specific documents. Now here's one thing that DHS and Bojorquez's attorneys do agree on. And that is that he was later detained on February 19th and deported on February 20th. They don't contest that. However, his attorneys are saying he should have never been deported because he had DACA protection.

Now we know that DACA is a protection that is given to dreamers, individuals who were brought to this country as children, and so that's the dispute. That's why these two worlds collide now, Wolf, because it's a FOIA lawsuit, this individual is asking the federal government to release the documents of his deportation.

BLITZER: We'll have more on the illegal aspects of this case, that's coming up later this hour. Rosa and Jessica, guys, thanks very much.

Still ahead, rising tensions on the Korean peninsula right now. A defensive military drill by the U.S. and South Korea putting North Korea on a higher state of alert. And the photo of North Korea's nuclear site that is surprising everyone. We have details that's coming up.

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[13:15:04] BLITZER: Breaking news this hour. We've just learned that China has put some of its military forces on high alert as a reaction to rising tensions with North Korea. The move comes as North Korea has increased threats over the possibility of a preemptive strike and as a U.S. carrier strike force prepares for deployment near the Korean Peninsula.

Our Pentagon correspondent, Barbara Starr, is joining us.

What more, Barbara, are you hearing about these Chinese military preparations along the border with North Korea?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, Wolf, a number of Chinese aircraft, fast attack bombers, cruise missile planes, have been put on alert. They've been either put on higher alert or brought up to a full readiness standard through increased maintenance.

But why is this so significant? Because this, the Chinese -- the U.S. believes the Chinese are doing to be ready for a so-called North Korean contingency. What contingency are they talking about? Are they talking about a U.S. military attack? Are they talking about refugee flows? This is exactly what the U.S. military does not like to see, rising tensions for not very clear reasons. And this is the kind of thing that can lead to military miscalculation in a region. This is why many people say being unpredictable about what you're doing with your military force may not be what you want to do in a time of high tension. That perhaps being very clear about where your aircraft carrier is and what it is doing is a much better way to go.

What would the Chinese do with these aircraft? Would they attack the U.S.? Would they attack South Korea? Would they fly into North Korea? Nobody knows. Nobody knows what contingency they're really preparing for. But it's all due to rising tensions and I think it's fair to say there are many in the U.S. military who want to see this thing cool down.

BLITZER: Yes. It's also interesting that the Chinese -- that China has suspended, at least for now, all flights on Air China between China and North Korea.

Barbara, as you know, the USS Carl Vinson, the aircraft carrier and the accompanying warships in that strike force, they're expected to arrive along the Korean Peninsula when? Their deployment certainly is taking some time because it was moving originally in the opposite direction, closer towards Australia. Tell us about that, when we expect this carrier battle group to be near the Korean Peninsula and also about this new photo of North Korea's nuclear site. There's some surprising elements there.

STARR: A couple of things there, Wolf. The latest word we're getting is the carrier strike group will be sometime next week, which is just a few days away, in the area of the East Sea, the Sea of Japan, between the Korean Peninsula and Japan. Very important because this is the same piece of water where U.S. naval ships have operated during times of high tension in the past according to U.S. officials, so they believe that the North Koreans, the Chinese, the region will understand the message there. There will also be U.S. submarines there. They will be able to conduct covert surveillance missions against North Korea. Covert surveillance, very important right now, because the U.S. continues to believe that very thing you were talking about, that North Korea could conduct its sixth nuclear test, underground nuclear test, at any time.

But the latest commercial imagery showing North Koreans at the site on the surface up top apparently playing volleyball. No one can exactly say why. We are told this volleyball is something that they have engaged in before. It would indicate the test certainly wasn't imminent when they were at the site playing volleyball. But U.S. military satellites, U.S. intelligence assets continue to watch around the clock. They still believe a test could come at any time, Wolf.

BLITZER: Yes, I'm always impressed that the detail that those satellite images can pick up. A volleyball game at that nuclear site, clearly something that's intriguing. Thank you very much, Barbara Starr at the Pentagon.

Adding to all the tensions on the Korean Peninsula, some major military maneuvers teaming the U.S. military and a thousand U.S. troops with South Korean forces right now.

Our Paula Hancocks is on the scene for us with the forces taking part in what's called Operation Max Thunder.

Paula.

PAULA HANCOCKS, CNN INTERNATIONAL CORRESPONDENT: Wolf, this is Max Thunder. This is a massive air exercise between the U.S. and South Korea. There's more than 80 aircraft involved in this. And you also have some 1,500 plus personnel that are part of this. It is routine. It is annual.

We hear from the lieutenant colonel that this has been months in planning. It's not a specific time frame. But, of course, it is an interesting time frame given what's happening on the peninsula at this point. We understand from the people involved in this, they don't have a specific enemy in mind when they're carrying out these drills. But bear in mind, North Korea is saying that the U.S. has pushed the situation on the peninsula to the point where nuclear war could break out at any moment.

[13:20:17] Now, North Korea doesn't like these drills. They do not like to see this kind of -- what they see as a dress rehearsal for an invasion. The U.S., though, says that this is defensive in nature. And we also know that China doesn't like seeing these military drills. They have suggested that these drills should be halted and then potentially North Korea would suspend its nuclear missile program. It's not a new suggestion and it's not a suggestion that Washington would accept.

Wolf, back to you.

BLITZER: Thank you, Paula. Paula Hancocks on the scene for us in South Korea.

Coming up, is there a possible breakthrough as far as health care is concerned here in the United States? We'll ask our next guest, Congressman Trent Franks. He's a member of the House Freedom Caucus. He's standing by to join us live, you see him right there, right after this quick break.

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[13:25:27] BLITZER: Possible breakthrough between Republicans right now as they move ahead with a compromise agreement on repealing and replacing Obamacare, an effort that clearly failed last month. Joining us now from Phoenix, Arizona Republican Congressman Trent Franks. He's a member of the House Armed Services Committee. Also a member of the House Freedom Caucus.

Congressman, thanks for joining us.

REP. TRENT FRANKS (R), FREEDOM CAUCUS MEMBER: Thank you.

BLITZER: Let me get your quick fix right now on where repealing and replacing Obamacare stands. The House speaker, Paul Ryan, says the finishing touches, his words, are being put on a revised piece of legislation. We know the Freedom Caucus -- and you're a member of the Freedom Caucus -- fiscal conservatives, and the more moderate so- called Tuesday Group, they have been talking. As far as you know, congressman, where do those discussions stand right now? Do you think some compromise could emerge as early as next week, ready for a final vote on the House floor?

FRANKS: Well, it's my opinion that that is the case, Wolf. I -- I'm convinced that the good news is that whatever comes out of this negotiation I believe is going to result in a better bill than we would have had before. So any reticence that some of us might have had I think is going to ultimately pay dividends.

BLITZER: So you're upbeat that something could be revived?

FRANKS: I am. The greatest challenge that we have with the health care issue is that we've had to do it through reconciliation because of the 60 vote no debate rule in the Senate. And that means we have to go through the Byrd (ph) rule. And I don't want to get esoteric here, but ultimately that means to repeal and replace the full blown version of that is not possible. We have to do something less than that. And that's very frustrating to some of us. So we're doing the very best that we can. But I really think the big story is the rules of the Senate making it almost impossible for us to get something to the Senate floor in this very politically polarized environment.

BLITZER: Yes, well, those are the rules. You've got to live with the rules.

Let's talk about North Korea, congressman.

FRANKS: Yes, sir.

BLITZER: We've just learned that China has put some of their military forces on higher alert. This as tensions clearly continue to heat up on the Korean Peninsula right now. What's the latest information you're getting? How tense is that situation?

FRANKS: Well, Wolf, let me just say that there is a moment in the life of nearly every problem like this when there is an opportunity for it to be seen and clearly understood and still time to deal with it effectively. And that moment happened back when Wendy Sherman was negotiating this deal with North Korea. She was the architect of the North Korean nuclear deal. And they paid the ransom, but they did not secure the hostage. And, ironically, North Korea had already gone nuclear when they did the same thing with Iran.

And I'm frustrated deeply because this is a serious situation now and it seems that my friends on the left are more interested in expressing their feelings than they are the outcome of these deals and that the number one qualification for negotiating a deal is somehow having catastrophically failed at it in a previous instance. And so this is a very serious situation that we're starting to face now. And the president of the United States has far fewer choices than the last one did eight years ago. And the options that he has are far more dangerous than they were. BLITZER: Because you make a fair point that the North Korea nuclear

deal negotiated during the Bill Clinton administration, and clearly that didn't work out the way that everyone hoped it would work out. What you're suggesting now is the nuclear deal worked out during the final year or so of the Obama administration could end up the same way.

But only yesterday Rex Tillerson, the secretary of state, and --

FRANKS: Wolf, that's exactly what I'm suggesting.

BLITZER: And the State Department, they said that so far, congressman, so far the State Department concluded in their 90 day review that the North -- that the Iranians are complying with the agreement. They're doing all sorts of other bad things.

FRANKS: Yes.

BLITZER: But with the nuclear deal, they're complying. And so what are you suggesting?

FRANKS: Well, why wouldn't they, Wolf? That nuclear agreement puts them on a firm, clear path to becoming a nuclear armed nation. There's no reason for them not to comply with it. And that's the unfortunate aspect of it all.

And, of course, you know, there are two components to every threat. That is the intent and the capacity. We are now seeing a situation where some of the most dangerous people on earth are beginning the capacity to do us harm. And we're relying on their intent not to. And Iran is on a very frightening path and I hope the president can do things necessary to interdict that path because otherwise we're going to see --

[13:30:09] BLITZER: So what are you suggesting, congressman? What are you -- what can -- what can he do?

FRANKS: I'm -- yes, I'm suggesting --