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Yates To Speak Out For First Time Since Trump Fired Her; Senate GOP Won't Even Consider House Health Care Bill; White House: May Not See Health Care Solution Until After 2018; Sources: Obama Warned Trump Against Hiring Flynn; Aired 11-11:30a ET

Aired May 8, 2017 - 11:00   ET



KATE BOLDUAN, CNN ANCHOR: Hello, everyone. I'm Kate Bolduan. The Russia investigation back in the spotlight in a major way. Just a short time from now, one of the major players in the probe of Russian meddling in the 2016 election breaks her silence.

The former acting attorney general, Sally Yates, the same Sally Yates, of course, who refused to enforce the president's travel ban and lost her job because of it.

She will be testifying along with the former director of national intelligence, James Clapper, before the Senate. And while we don't know, of course, what Yates is going to say, we do know that expectations could not be higher.

Her testimony is expected to contradict how the White House has described her warnings about the president's national security adviser, Michael Flynn, and his contact with Russian officials.

And this morning, the president has something to say about all of it and tweets in part, blaming Obama with this one. Let me read it for you, "General Flynn was given the highest security clearance by the Obama administration, but the fake news seldom likes talking about that."

President Trump also targeting the witness with this one -- "@SallyYates under oath. If she knows how classified information got into the newspapers soon after she explained it to White House counsel."

With that, let's get to CNN's chief national security correspondent, Jim Sciutto. A lot of expectations riding on this one, Jim. What are you watching for today?

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: Well, listen, you have two witnesses here, James Clapper and Sally Yates, who have become something of lightning rods for the GOP's reaction to the Russia investigation.

Sally Yates being accused, really, of being an Obama appointee, kind of a shill for the Democratic Party in terms of her role in this, Clapper as well. This is despite the fact that both of them are long- term civil servants.

They both served Republican and Democratic administrations, so you have that. But we do know that Yates in particular is going to deliver a testimony that contradicts the White House narrative here, specifically on General Flynn.

She's going to say that on January 26th, she warned the White House, gave a forceful warning about Flynn's contacts with Russia, saying that he was lying when he said he did not discuss sanctions in those contacts with the Russian ambassador.

It was only 18 days later that Flynn was fired and at the sign, White House spokesman, Sean Spicer says, well, when Flynn came by, it was just sort of a friendly heads-up. She's going to say, no, in fact, this was quite a forceful warning.

In terms of Director Clapper, he's expected to focus on really the substance of these hearings, and that is the investigation into Russian hacking of the U.S. election, calling it egregious. He's done this in other public comments before, kind of trying to draw the conversation back to where this all started.


SCIUTTO: That a foreign power intervened in the U.S. election and caused great damage, not so much with the result. They didn't know who was going on win, but at least damage in terms of confidence in the process.

BOLDUAN: A lot riding on this, a lot of eyes on this one today. Jim, thanks so much. Great to see you. We'll talk much more about this, implications, what we could be hearing today or not in a moment.

But while the Senate is hearing testimony from Sally Yates and James Clapper, the Senate also has another big task at hand at this very moment, the health care bill.

House Republicans passed their version last week. You'll recall, of course, that the president and GOP leaders took a victory lap at the White House directly afterward. Well, right now, it's looking like the Senate could be scrapping that whole thing and starting from square one.

CNN's Phil Mattingly is live on Capitol Hill with much more. So, Phil, where is this all headed? I mean, for a lot of folks, hearing they could be starting over, that's a pretty big deal.

PHIL MATTINGLY, CNN CORRESPONDENT: Yes, especially when you think about what the House went through, how arduous that entire process was. And look, their proposal, which they passed by the slimmest of margins last week, sent over to the Senate, isn't exactly being welcomed with open arms.

It's more being taken, looked at briefly and then being tossed to the side. I think what needs to be understood here is that Senate Republicans have always planned on making major wholesale changes to whatever the House sent over, if the House was able to do that.

Now that they've done that, the Senate has made very clear, they're going to go behind the scenes, take their time and work through a proposal that they believe can get 51 senators. And there are a lot of very complicated dynamics at play.

Not the least of which is that some of these Republican senators come from Medicaid expansion states, even though they're run by Republican governors.

And when you think about it like that, when you look at what the House proposal does, not just to Medicaid expansion specifically, but also in the willingness to allow states to opt out of certain things, you have a lot of governors very concerned. Kate, take a listen to what Ohio Governor John Kasich had to say this weekend.


GOVERNOR JOHN KASICH (R), OHIO: The $8 billion, it's not enough to fund -- it's ridiculous! And the fact is, states are not going to opt for that. See, I think the fundamental issue here are the resources. I don't want to give you exactly the numbers, but it's about half the resources in this bill that were in Obamacare.

Now, I can tell you that we can do with less resources, but you can't do it overnight and you cannot give people a $3,000 or $4,000 health insurance policy.

[11:05:09]You know where they're going to be? They're going to be living in the emergency rooms again.


MATTINGLY: OK, that perspective is shared by a number of senators, Rob Portman, Ohio senator in the Senate Republican working group on this. You have Dean Heller from Nevada, Shelly Moore Caputo from West Virginia, Lisa Murkowski from Alaska.

All of these states have very, very important parochial issues as it comes to Medicaid expansion. Then you have a lot of people concerned about the structure of the tax credit, very conservative members, very concerned that the House bill didn't go far enough when it came to trying to attack and dismantle Obamacare regulations.

All of this is going to need to be addressed in a major way, and that means, Kate, to your original point, there will be a lot of scrapping and starting over here, despite the struggle we witnessed over the course of the last six weeks over in the House.

BOLDUAN: Yes, and as you laid out perfectly, Phil, everything you laid out also indicates this isn't going anywhere very fast. This is a slow and arduous process as they work out these details and try to. Great to see you, Phil. Thank you.

With me now to discuss this and much more, Errol Louis, a CNN political commentator and political anchor for Spectrum News, and also Betsy Woodruff, a political reporter for "the Daily Beast." Guys, it's great to see you.

Errol, first to you. You have the victory lap, kind of the party at the White House last week with the president and Republicans. They acknowledged then it was a momentary victory lap. They knew that, obviously, they know how it works and it needs to head over to the Senate.

But now you have a victory lap, but also a key senator, Susan Collins, saying, forget that, we're starting from scratch. For our viewers, listen to what Susan Collins had to say.


SENATOR SUSAN COLLINS (R), MAINE: The House bill is not going to come before us. The Senate is starting from scratch. We're going to draft our own bill. I think we will do so and that we will come up with a whole new, fresh that solves the legitimate flaws that do exist with the ACA. I would like to see us put together a bipartisan group to solve this problem.


BOLDUAN: Starting from scratch. What does that really look like at this moment, Errol?

ERROL LOUIS, CNN POLITICAL COMMENTATOR: Well, what it would look like is a long, arduous process that will go well beyond the real deadline here. Because look, to the extent that Susan Collins is talking about dealing with health care itself, the approach she just outlined makes a lot of sense.

The hard politics of the moment, however, which really sort of links this to tax reform and the need to come up with hundreds of millions, of billions of dollars in savings in order to enact some of the tax cuts that the White House and the Republican majority would like to see done -- to get that done, you've got to really slash and burn Obamacare.

There's just no getting around it. Now, that call is really a leadership call. It's not going to be Susan Collins who makes that call. It's going to be really much more Mitch McConnell's decision about how to strategically deal with those two sort of big goals of the majority.

BOLDUAN: Speaking of Mitch McConnell, yes, Mitch McConnell will have the largest say in how quickly this moves, how this goes. He's also, Betsy, he's one of the members of this working group of 13 senators that are going to be working through all of this, but what does it say that Susan Collins, who will be a key voice in this, other senators like Bill Cassidy who have been really skeptical of the efforts so far, they're not part of this working group in the Senate?

BETSY WOODRUFF, POLITICAL REPORTER, "THE DAILY BEAST: It suggests that this working group, whatever final product it produces, could potentially have a hard time selling that more broadly to the Senate Republican conference. Remember, Bill Cassidy beat a powerful incumbent in 2014 in the midterms in large part because he pitched himself as a medical doctor --

BOLDUAN: That's a great point.

WOODRUFF: -- who understood health care policy and could craft a replacement to the Affordable Care Act if he was elected, but now we see him getting frozen out and he's been very open and candid about criticizing the process, about suggesting that the House bill and even some of the ideas getting, you know, bandied about in the Senate aren't going to necessarily to lead anywhere.

So, the fact that Cassidy and Collins aren't involved in this means that it's going to be a long process, it's going to be a tough process, and hard to game out or guess how this all plays out.

BOLDUAN: It absolutely is. Timing, though, I mean, we're all kind of talking about timing in a very abstract sense. It's going to be long, it's going to be hard, and that means when you look at the calendar, who knows where that could end up.

And Republicans are not necessarily putting a date on it, even though you point out the most important part, that they do want to link it to the savings for tax reform. But Democrat Chris Coons, who was on MSNBC this morning, he had his idea of how the timing would going to go. Listen to this, Errol.


SENATOR CHRIS COONS (D), DELAWARE: My guess is that Leader McConnell is going to take some time here. And while he may ultimately pass a bill in the Senate, I think he will send it to conference with the House. That conference will go on a very long time, and we won't actually see a final product until after the '18 elections.


BOLDUAN: Until after the 2018 midterm. Who does that help and who does that hurt then politically? Because yes, health care is real and health care reform is a real conversation that impacts everybody, but it has real political implications --

LOUIS: It absolutely does.

[11:10:00]It helps a couple of dozen -- if that timetable were to play out, it would help the couple dozen or so Republican members of Congress who are in districts that Hillary Clinton won, who maybe didn't want to be associated with some of the harsher side of the reform package that just passed the House.

It enables them then to sort of put up the visual of standing with the president in the Rose Garden, sort of clapping and smiling and saying we're doing the people's business without actually enacting any of the harm yet, until the other side of the midterm elections.

BOLDUAN: Yes, and if it's lingering out there, maybe, I don't know, in a strange way it gives both sides the ammunition for whatever they want to push in the 2018 election. Someone else adding their voice to the health care debate right now, Betsy, is former President Barack Obama. He was accepting a Profile in Courage Award at the John F. Kennedy Presidential Library and during his speech, he said this. Listen.


BARACK OBAMA, FORMER U.S. PRESIDENT: I hope that current members of Congress recall that it actually doesn't take a lot of courage to aid those who are already powerful, already comfortable, already influential, but it does require some courage to champion the vulnerable and the sick and the infirmed, those who often have no access to the corridors of power.


BOLDUAN: I think it would be no surprise to anybody if President Obama doesn't like the health care bill that came out of the House, but who do you think President Obama's speaking to there?

WOODRUFF: Well, I think he's talking to vulnerable House Republicans at that point. I mean, the reality is, one of the biggest political challenges to Republican leadership in pushing for a health care replacement plan is that they know a number of their members are going to lose their seats over it.

Members of the House know this. Talking to Republican aides and operatives over the weekend, people are aware, it's extremely obvious. So, the question becomes, are House Republicans, potentially Senate Republicans, willing to actually lose their seats because they care so much about repealing and replacing the Affordable Care Act?

When President Obama was doing health care reform years ago, there were Democrats who knew they were going to lose their seats, but the vision, sort of the goal is theoretically a bit more compelling for them.

In Virginia, the Democratic gubernatorial primary, Tom Parrella, who is sort of the Bernie Sanders-aligned contender, has actually been emphasizing on the campaign trail that he lost his House seat because he voted for the ACA. Can House Republicans say the same thing? It's not necessarily equal. It's tough.

BOLDUAN: Yes, that's an interesting point. I do remember being at some rowdy town halls for him and we all saw how that all turned out. A lot we didn't see this time around. Great to see you, guys. Thank you so much.

WOODRUFF: Sure thing.

BOLDUAN: Coming up for us, the acting attorney general that President Trump fired getting ready to speak out for the first time under oath. Is the president already, though, trying to discredit Sally Yates before she even speaks? And why?

Plus, the sales pitch and a big apology. What Jared Kushner's sister told Chinese investors that forced the family business to apologize and has a lot of folks again talking about another potential conflict of interest? We'll discuss.

And this father lost his son to an overdose, and he said he voted for President Trump because he trusted Trump wouldn't let it happen to another family. Well, this man now says he feels betrayed. We're going to get his reaction to the possibility that the White House is planning massive cuts to the drug czar's office. That father joins me live.



BOLDUAN: Here's some breaking news from our Jim Acosta over at the White House. Jim Acosta reporting from his sources that back on November 10th, an important date, that is when President Obama sat down with then President-elect Trump for their very important private meeting.

In that meeting, Jim Acosta is learning from his sources, President Obama warned President Trump against hiring Michael Flynn as his national security adviser, warned him personally and directly during that meeting in the oval office on November 10th.

Errol Louis is still here with me. Jeffrey Toobin, a CNN senior legal analyst is here with me as well. What does that mean to you? How significant is that?

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: Well, you know, you can always tell what's going on with President Trump because he tweets exactly what he's thinking.

BOLDUAN: Like this morning.

TOOBIN: And he's very uncomfortable that Congress is looking into this whole Michael Flynn thing. He essentially threatened Sally Yates, which is something presidents are not generally supposed to do, you know, essentially threatened her by saying that she, you know, implying that she released classified information.

BOLDUAN: Here's the tweet for our viewers. This morning, he wrote, "@sallyyates under oath if she knows how classified information got into newspapers soon after she explained it to White House counsel." But now we learned it wasn't just Sally Yates who warned the White House, it was President Obama who warned the White House, or President Trump."

TOOBIN: Apparently. And another thing you'll notice President Trump was saying is that, well, it was the Obama administration that gave him a security clearance. It was President Obama who fired Michael Flynn from the Defense Intelligence Agency.

So, you know, this attempt to put Michael Flynn on the Obama administration suggests that Trump is really feeling very uncomfortable about Flynn, the subject of Flynn being raised.

And again, it all goes back to this issue of whether Flynn and other people involved in the Trump campaign were working with Russia to defeat Hillary Clinton.

I mean, that question is what hangs over all these hearings. We don't know the answer to it, but there's more and more evidence that justifies further investigation.

BOLDUAN: And with Flynn, it was were sanctions, were relief of sanctions discussed or implied during conversations with Russian officials. Errol, as this was coming through, you're recalling that was that very important meeting everyone was waiting for between the two, the two presidents.

LOUIS: Sure, that's right. The shock of the election outcome had really not even settled in, right? Remember, the election was on November 8th. Two days later, in the oval office shaking hands with President Obama with all kinds of different sort of bad blood between not just the two parties.


LOUIS: But the two men still up in the air, you know? The whole birther campaign was still, you know, sort of unresolved, never really discussed. There was that great sort of iconic shot of a lot of the Obama transition team folks standing there with their arms folded, in the driveway of the west wing, watching as the Trump entourage came into the west wing.

[11:20:12]And so, if during that conversation the president, then President Obama said explicitly, do not hire this man, this is a problem, I fired him for a reason, this is going to cause you grief, it would be very interesting then to see why the incoming president decided not only to sort of have him involved but to really sort of elevate him and defend him, even beyond the point when we now know he had had meetings with the Russian ambassador.

TOOBIN: And remember, Trump did not just appoint Michael Flynn to some job. He made him the national security adviser, which is the single most important national security job in the White House, and perhaps in the United States government, with access to every bit of classified information in the entire federal government --

BOLDUAN: A position that doesn't requires confirmation from Congress, also why it's an important position to point out.

TOOBIN: also. And someone who really is in the president's ear every single day. So, the idea that President Obama felt so strongly about Michael Flynn that he personally warned the president-elect about it, you know, suggests that there's something there that really should not have made him -- not have allowed him to get as far as he did.

BOLDUAN: Yes, I mean, giving personnel advice so directly, especially about one specific person, is a pretty amazing thing. Stand by. I want to talk not just about the breaking news, but how this breaking news could possibly impact the hearing today that everyone's waiting for, with so much expectation surrounding the hearing of Sally Yates, the former acting attorney general, who warned the White House about Michael Flynn and that he was misleading the White House. Well, now we have not just Sally Yates, but according to Jim Acosta's great reporting and sources, President Obama also warned the president about Michael Flynn. We'll be right back after this.



BOLDUAN: Continuing to follow breaking news out of Washington that President Obama warned President Trump about Michael Flynn. This information coming from Jim Sciutto, great reporting. He's hearing from former Obama officials that during -- as we're looking at pictures right here from this November 10th meeting, right after the election.

President Obama, according to Jim's sources, warned President Trump about Michael Flynn, against hiring Michael Flynn, in that private oval office meeting.

Let's get over to the White House. Joe Johns is following all of this. Joe, as we're looking at these pictures and this video, remind us of this meeting, the dynamics going in and what they said coming out.

JOE JOHNS, CNN SENIOR WASHINGTON CORRESPONDENT: They came out with glowing words for each other. It was November 10th of last year, two days after the election. It was a surprisingly long meeting.


JOHNS: It lasted about 90 minutes or so. President Obama indicating that he wanted to do everything he could to make sure the Trump administration succeeded. This was the first time the president and the president-elect had met.

And now we learn that among the things they discussed in that lengthy meeting, 90 minutes time, was apparently the fact that Michael Flynn ought not be hired as national security adviser, though we all know Donald Trump was certainly loyal to him, given the fact that Michael Flynn had traveled with the administration -- had traveled, I should say, with the campaign, worked for the campaign, and had gained Donald Trump's trust.

So, the President Trump, went ahead, named him as national security adviser, and we know the rest of the story. He ended up being fired by President Trump because he had not disclosed certain information to the vice president, all of this coming as the acting attorney general also goes to Capitol Hill to talk just a little bit more about Michael Flynn -- Kate.

BOLDUAN: It's pretty amazing turn of events, Joe. Let me know if you hear any reaction from the White House. We're very interested to see what they have to say about all this. Let's get to chief national security correspondent, Jim Sciutto, for a little more perspective. Pretty amazing stuff, Jim. JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: It is, Kate. You know, there's been a lot of buck-passing on General Flynn, you may have noticed. Not the first time it's happened in Washington. But even this morning Donald Trump tweeting that, hey, the Obama administration who gave him his security clearance.

Listen, fact is, particularly for the most senior national security officials, when they are picked for top administration jobs, there is additional vetting that's a responsibility of that administration, not to mention the fact that Flynn was fired as head of the DIA in 2014 by the Obama administration.

But you have that, you know, the vetting of him is the responsibility of the incoming administration. But in addition to that, we already heard that Sally Yates is going to testify today to say that she delivered a forceful warning on January 26th that the White House canceled about Flynn saying that he could be compromised because he lied about speaking to the Russians during the transition.

That's January 26th. Now we know that President Obama, a month and a half before that, November 10th, two days after the election, when he sat down face-to-face with Trump, at a time, as Joe Johns was saying, when their relationship was at its peak, you might say -- you remember Trump coming out of the meeting saying we could work together, we were on a level.

We now know that in that meeting, President Obama said listen, you shouldn't hire General Flynn, there's some smoke around there, in effect. So, he got multiple warnings, the Trump administration did, yet went forward with it and it took them a number of weeks before they did fire him.