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Police Contain Terror Network; Tillerson Comments on Leaks; Trump's Cuts Could Cost Jobs; White House Defends Budget. Aired 9:30- 10a ET

Aired May 26, 2017 - 09:30   ET

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

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[09:30:49] POPPY HARLOW, CNN ANCHOR: All right, breaking news out of Egypt. A group of gunmen have opened fire on a bus carrying Coptic Christians. They were en route to a monastery. We know at this hour that at least 26 people were killed, 25 other injured. And among the victims, women and children. Egypt's president, El Sisi, calling for an emergency meeting. The shootings being described this morning as a terrorist attack.

We also have new details this morning about the very moments leading up to the bombing in Manchester. The bomber, Salman Abedi, spoke with his brother in Libya just 15 minutes before the attack. Apparently his brother knew of his plans but lacked details about when and where. Meantime, British police are trying to contain, they say, the network they believe is behind Monday's attack, having conducted multiple raids at this point and making what they're calling several significant arrests.

Our international correspondent Muhammad Lila joins us now from Manchester. So they're - they're trying to contain, they say, this network. How big do they think it is?

MUHAMMAD LILA, CNN INTERNATIONAL CORRESPONDENT: Well, Poppy, that's a really good question and that wording is key. They're talking about containing the network that they believe enabled the attacker to get away with that plot. And the U.K. security minister referred to that word "containing," believing that the more they contain it, the more they pull up leads on who may have been involved in that network. Eventually, they will be able to take it down. Police are describing it as a very fast moving investigation.

Look, we're now into the fourth day after the attack and these police raids are still going on. The investigations began initially in the first few hours as a local investigation. Now we know it is a part of a much bigger international investigation, of course with ties to Libya. And the big news coming out of Libya is that there is a Libyan official who's part of one of the militia groups there. They were the ones that detained the suspect's brother. And they say that the suspect's brother admitted under interrogation that he and his brother were part of ISIS. He said that he was aware of the plot, except what he didn't know is exactly when it was going to happen. Also under interrogation the brother allegedly came out and said that he spoke with the attacker - his brother, the attacker, in Manchester just 15 minutes before the attack. So that is a crucial piece of evidence and a crucial testimony that investigators here will be very, very interested in.

Poppy.

HARLOW: And we've learned that British intelligence services are now handling - is this number right - handling more than 400 active terror plot investigations?

LILA: Well, that's right. And that's not entirely unusual given the size of the U.K. And what we don't know is whether those 400 active terror investigations are connected to this week's attack or if these were investigations that were taking place beforehand.

Now, in terms of the status of the investigation that's going on now for the attack, we know that police, so far, have made ten arrests. Two people have been released without charge. But there are still eight people currently in custody. And some of those people have been in custody for the last four days. So certainly officials here and security officials here believe that they are getting closer to solving the riddle of who was behind this plot. But I think the next few days are going to be key with information coming out very rapidly, both in Libya and here in Manchester.

HARLOW: Yes, and saying they're trying to contain the network.

Muhammad Lila, thank you for the reporting, out of Manchester.

Also this morning, a show of solidarity from Secretary of State Rex Tillerson. Here you see him in London. He is signing a book of condolences. He is writing in part that American's hearts are broken. A reporter, just moments later, asking him about the anger surrounding those leaks of intelligence here in the United States. Michelle Kosinski joins us now from London. She is traveling with the secretary of state.

What did he say in response?

MICHELLE KOSINSKI, CNN SENIOR DIPLOMATIC CORRESPONDENT: Hi, Poppy.

Well, this sounded like an apology. It wasn't in so many words, but he did use the word "regret." And this was extraordinary. I mean how often do you see a U.S. official of his rank, secretary of state, get out publically next to your counterpart and say, we have to take responsibility for this. Listen.

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REX TILLERSON, SECRETARY OF STATE: The president has been very strong in his condemnation and has called for an immediate investigation and prosecution of those who are found to have been responsible for leaking any of this information to the public. We take full responsibility for that. And we are - we, obviously, regret that that happened. This special relationship that exists between our two countries will certainly withstand this particular, unfortunate event. (END VIDEO CLIP)

[09:35:22] KOSINSKI: So he said all the right things there. I mean it was brief, granted. It's not as if it covered every possible angle of this. But he made the right sounds to say that we are going to try to stop this from happening again. We regret this. We are going to work together. And this was an opportunity.

I mean, when you look at the situation where they're both trying to prevent future attacks like this and dismantle terror networks around the world, you want to show solidarity. I mean that's really what they're talking about here. So this was a perfect time to very publically do that.

What that means moving forward, of course, we're just going to have to see because leaks have been endemic within this administration. I mean it really sounds like they're going to step up the process of trying to root those out. But - but keep in mind, when you look at this relationship, this comes basically only weeks after the administration had to again essentially apologize, although that was behind the scenes, when the administration was making allegations that British signals intelligence was participating in wiretapping the White House.

HARLOW: Right.

KOSINSKI: That was another embarrassment. I mean a rare statement from GCHQ, British intelligence, that called that utter nonsense.

HARLOW: Yes.

KOSINSKI: And now here the U.S. is again saying, OK, we shouldn't have let this happen. We're going to try to stop this from happening again.

HARLOW: All right, important context, you're right.

Michelle Kosinski, in London for us, thank you very much.

Still to come for us, the White House says its budget plan is a taxpayer first plan. Under the blueprint, though, thousands - thousands of those who supported this president the most in the election could lose out and lose their jobs.

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[09:41:13] HARLOW: All right, some major health insurance companies this morning say that uncertainty around the new GOP House health care bill is actually driving up their premiums. Blue Cross and Blue Shield of North Carolina, they're now predicting a 23 percent rate hike they say because of all of that confusion. This is happening as a criticism that continues over the president's Medicaid plan. The current blueprint could cause millions to lose their health benefits, it could cost thousands to lose their jobs. Our Miguel Marquez went to Kentucky to find out more. This is a state that the president won by 30 points.

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DR. ANTHONY YONTS, QUANTUM HEALTHCARE: And open up for me. Say ah.

MIGUEL MARQUEZ, CNN CORRESPONDENT (voice-over): Dr. Anthony Yonts, Hazard's Quantum Healthcare, in constant motion. Today, he employs 50 people. His practice, expanding.

YONTS: I would say 70 percent of our economy is driven by health care.

MARQUEZ (on camera): You think 70 percent of the economy. That's just - you living here, that's what you see?

YONTS: Yes, that's just looking at it and giving it the eyeball test. Health care is the driving economic force in our area right now.

MARQUEZ (voice-over): Kentucky, which expanded Medicaid and created its own insurance exchange under Obamacare, has seen both patients and the health care workers who serve them skyrocket.

DR. JONATHAN PERCY, NORTH FORK VALLEY COMMUNITY HEALTH CENTER: It takes a big team to run a clinic like this.

MARQUEZ: Dr. Jonathan Percy at University of Kentucky's Center for Rural Health in Hazard trains future doctors.

PERCY: We've seen a lot of clinics open lately. We've seen some new clinics that have come around. We've just built a huge new wing on the hospital.

MARQUEZ: All of that comes with jobs. Jobs now at risk if the Obamacare Medicaid expansion is eliminated by 2020 as Congress is now considering.

Since 2014, as states expanded Medicaid, some 1.1 million jobs were created nationwide. Eastern Kentucky, coal country, the fifth congressional district stands to lose more jobs than any other district in the entire country.

JASON BAILEY, EXECUTIVE DIRECTOR, KENTUCKY CENTER FOR ECONOMIC POLICY: By one study, we would lose 20,000 jobs in the fifth congressional district -

MARQUEZ (on camera): Twenty thousand jobs?

BAILEY: Twenty thousand jobs, which is about double the number of jobs we lost in the coal industry. So it would be the other shoe to drop on the economy of eastern Kentucky.

MARQUEZ: How good is it to be a nurse in eastern Kentucky right now?

JANET NOBLE, LICENSED PRACTICAL NURSE: I mean if you love taking care of people and that kind of environment, it's really good. I mean there's not - like I said, there's not a shortage of jobs.

MARQUEZ (voice-over): Nurses in high demand here and well paid, evidence of a driving health care industry everywhere. This mall, once a Walmart, now a super-sized medical center.

MARY MEADE-MCKENZIE, CEO, KENTUCKY RIVER COMMUNITY CARE: We're constantly growing.

MARQUEZ: Kentucky River Community Care now has 70 facilities, has hired more than 150 employees in the last few years and can't expand fast enough.

MARQUEZ (on camera): How big a piece of that is the fact that they can pay for it with Medicaid?

MEADE-MCKENZIE: Eight percent. I mean because, you know, for our programs, we have to look at revenue to expand.

MARQUEZ (voice-over): Health care jobs on the rise here. Ending the Medicaid expansion, another devastating blow.

Miguel Marquez, CNN, Hazard, Kentucky.

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HARLOW: A fascinating piece. A devastating blow in a state that was such a big supporter of this president.

Miguel, thank you for that.

Still to come for us, the White House budget director says compassion will be measured by how many people get off the government roles. But if those cuts hit his loyal supporters, will they stay loyal to President Trump?

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[09:49:02] HARLOW: All right, the president's budget director is insisting that the White House budget shows that Republicans, quote, "care about poor people." He also says they care about taxpayers and he has hailed this budget as a taxpayer-first plan. The proposal includes billions of dollars in cuts to Medicaid, the food stamp program, student loans and welfare really ramps up, as you know, military and defense spending. Many of those cuts, though, are going to hit, if it were to pass, many very loyal Trump supporters in states like Kentucky. So what is the calculus here?

Helping us understand, CNN Money senior writer Heather Long. She's traveled through these states and reported extensively on this. And CNN's senior economics analyst and former senior adviser to the Trump campaign on all things economy, Stephen Moore.

So nice to have you both here.

STEPHEN MOORE, CNN SENIOR ECONOMICS ANALYST: Hi, Poppy.

HARLOW: Good morning.

Let me begin with you, Heather.

I mean you've been there - we've been there together across Kentucky, all these rust belt states. You did a fascinating piece on CNN Money this week where you point out Beattyville, Kentucky, known as the poorest white town in America, huge Trump town, 57 percent of the households get food stamps, 58 percent get disability payments. What are they saying in reaction to the Trump budget?

[09:50:10] HEATHER LONG, CNN MONEY SENIOR WRITER: There was a lot of surprise, Poppy. I had a chance to speak with a number of voters in Kentucky in that town of Beattyville, and they couldn't believe it at first when I called them. I was the first person to tell them that this might be happening. And it was sad. A number of these people, particularly on disability. So if you're on disability, you tend not to get off because you have a physical ailment. It's difficult for you to work and you're reliant on the government payments, usually around $700 a month. And one woman said, I can't live without this. And I said, well, the president's trying to help people get back to work. And she said, look, I'm physically disabled. I can't do that. And -

HARLOW: But some of them did say to you, we know there's waste, we know there's fraud, some of this should go away, right?

LONG: That's a very good point, and certainly that's resonating. I think just about everybody in America can agree, we want people to work. We don't want people on government aid forever.

HARLOW: Right.

LONG: A lot of people particularly are focusing on the food stamp program. Forty-four million Americans were on food stamps last year.

HARLOW: Yes.

LONG: Nearly one in ten.

HARLOW: It's way up from, I think, 26 million before the financial crisis. It is way up and something that a lot of Republicans keep pointing to.

Stephen Moore, to you. Help me understand the president's calculus here because you were his senior economic adviser on the campaign. If you look at what the tax policy center says, they say nine of the top ten states that receive the most federal aid as a percentage of their budget voted for President Trump in 2016. Politically, I don't understand this from the president. Help me.

MOORE: Well, I think I have a good explanation. By the way, I did read Heather's piece and I thought it was excellent. I learned a lot from it.

But, look, I went to a lot of those same towns on the campaign trail in places like Kentucky, and Ohio, and Pennsylvania, and Michigan, that have become economically depressed, and the attitude that I heard from these people is, look, we don't want the welfare and we don't want all the government aid, we just want our jobs back. We want to help the economy. And I think that's one of the reasons that a lot of those working-class Americans abandoned the Democrats, because the Democrats' idea is, we'll just give you all these welfare benefits, and, you know, this -

HARLOW: But help me understand what the president's doing here politically to make cuts in his biggest supporting places.

MOORE: OK. Yes. Well, but, you're missing my point. The people want jobs. They don't want welfare.

HARLOW: OK.

MOORE: Now, a couple points here. One is that the - a government auditing - the federal government's own auditors found that there's $160 billion, billion with a "b," fraudulent payments in Medicaid, in food stamps, in disability in these programs.

HARLOW: Yes.

MOORE: We've got to start doing something about getting -- $160 billion - that's $1.5 trillion over ten years.

Second of all, we did - the main impetus of the - of the Obama - I mean, I'm sorry, the Trump budget, is to get people back into work. You have work requirements. Now you might think, oh, gee, that's such a harsh thing to do. We did that under Bill Clinton, a Democratic president, and we found that the work requirements had a very positive effect. People got into jobs.

HARLOW: Yes. It's a fair point. It's an important point.

LONG: Can I jump in?

HARLOW: Yes.

LONG: I do think Stephen's right, people want to go back to work. That's why they voted for Trump, hoping he would bring that economic growth. But the thing in the budget that's throwing a lot of people, including - and Republicans, is that the budget also includes dramatic 40 percent reductions in job training programs. So when I visit a lot of these places, these are low-skilled workers. Some maybe don't - barely have a high school education. They need training.

HARLOW: And - and a lot of those lower skilled workers, Stephen Moore, who the president really won over in all of this, are those working white class - working class, white, middle-aged males.

MOORE: Sure.

HARLOW: That's a lot of m's, a lot of alliteration this morning.

MOORE: Exactly. That's right.

HARLOW: But according to the Center on Budget and Policy Proposal, which I should note is a more left-leaning center -

MOORE: Right.

HARLOW: They point out that in those white households where the most educated member had less than a four-year college degree, they represented the highest share of households receiving food stamps in Trump key states, Iowa, Ohio, Wisconsin, Michigan, Pennsylvania. Again, speak to that and speak to Heather's point about cuts in these job training programs. How does it add up?

MOORE: Well, you're right, all of those states that you just had on the map were carried surprisingly by Donald Trump. They had been carried by Obama four and eight years ago.

Again, I'd go to my point where I traveled a lot of those areas. I saw the economic depression. I - for example, when we'd go to coal towns and they were just totally eviscerated, largely by Obama-era regulations that tried to destroy the coal industry. One good statistic that's come out just in the last month or so is we've created 45,000 new mining jobs just since Trump took office.

So, look, I think what we're saying, the Trump administration, we want to bring economic development and jobs back to these areas. We don't want to have, you know, 50 percent of the people on welfare. I mean, my goodness!

One last thing. You know, if you look at measures of happiness, you look at what's happened in a lot of these towns with high suicide rates, you know, declining life expectancy, a lot of alcoholism and drug use. What's happening is that people are just economically depressed. They feel like there's no future. And you don't create an economic future for people by putting everybody on welfare.

[09:55:12] HARLOW: That's true, you don't, but you also have to give them the skills for the jobs of the future.

MOORE: That's true. We do.

HARLOW: Jobs of the future, which means job training.

MOORE: Yes, I agree.

HARLOW: And dealing with this automation.

Mark Zuckerberg of FaceBook yesterday in his Harvard commencement called for a universal basic income.

MOORE: I saw that.

HARLOW: We'll see. We'll see what happens.

MOORE: OK.

HARLOW: It's an interesting theory.

Guys, thank you. So nice to have you on.

MOORE: Thank you.

HARLOW: All right, we are moments away from Hillary Clinton returning to a very familiar spot. Look at that picture back in the day, there she is, when she was the speaker at Wellesley from her graduation. Well, she will address the graduating class today and you will hear it here live. Stay with us.

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