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White House Staff Concerned About Kushner Security Clearance; Senate Dems Seek Review Of Kushner Security Clearance; Susan Rice: Testimony to House Intel Committee Delayed; Dollar Slumps In Wake Of Health Care Bill Collapse; Interview with Rep. Mike Quigley. Aired 9- 9:30a ET

Aired July 18, 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] JOHN BERMAN, CNN ANCHOR: We've got a lot of news. Let's go at it.

All right, good morning, everyone. I'm John Berman.

We have live pictures from Capitol Hill where Republican senators hope their breakfast this morning is better than their dinner last night because that came with a side order of a complete collapse of the plan to repeal and replace ObamaCare.

Done. Over. Finis. At least for now.

Doomed by the late night defections of two more Republicans. That, as the President was wining and dining other Republicans to win their support.

In fact, the news came shortly after the President reportedly told senators they would look like dopes if they did not pass something. We're told the President was caught off guard and he was annoyed.

Perhaps you can see that annoyance this morning in some of his new writings. He is pointing some fingers.

He says -- we were let down by all of the Democrats and a few Republicans. Most Republicans were loyal, terrific, and worked really hard. We will return, he says.

This as the President is now calling out Republicans to just repeal ObamaCare now and worry about replacing it later. An attitude now being adopted by the Senate Majority Leader. Quite a morning on Day 2 on Made in American Week.

M.J. Lee has the very latest for us from Capitol Hill. Good morning, M.J.

M.J. LEE, CNN NATIONAL POLITICS REPORTER: Good morning, John. Well, what a dramatic night. Mitch McConnell getting not one but two nails in the coffin last night on his Senate bill. Senators Jerry Moran and Mike Lee coming out at the same time to say that they will vote "no" on the motion to proceed.

What this meant, of course, was that McConnell could not even bring up his bill to proceed on the Senate floor. And he basically acknowledged that repeal and replace is not going to be successful.

Now, John, if that was Plan A, now we are moving on to Plan B. And here is Plan B.

McConnell wants to still move forward on the motion to proceed vote. And then if that is successful, he wants to bring up an amendment. That would be a 2015 repeal bill that would repeal but delay that repeal for two years. That went through the Congress in 2015. However, it was vetoed by President Obama.

Now, if the repeal and delay plan sounds familiar, it should because this is a tactic that Senate Republicans and House Republicans considered at the beginning of this year. But then they decided that there was no appetite even within the Republican conference to just pursue repeal without a replacement plan ready. And remember, President Trump himself also said that repeal and replace should happen simultaneously.

So there are a lot of questions right now as to whether McConnell can even get 50 votes to move forward on this new plan. I will say, though, some senators might be won over by this new plan, for example, Mike Lee. His aide telling me this morning that he will now vote "yes" on the motion to proceed.

Now, President Trump, of course, very frustrated. You can tell based on his tweets earlier this morning. He said -- you read one of the tweets.

The other tweet read -- as I have always said, let ObamaCare fail and then come together and do a great health care plan. Stay tuned.

Now, we are certainly staying tuned and watching, especially closely the Senate lunches that will happen in a couple of hours inside this closed-door meeting. We expect some senators to offer pushbacks to McConnell for his new plan.

And we should be getting a little more clarity on what McConnell wants to do in terms of the timeline. He says that he wants to have the vote in the next couple of days. We'll see if that actually comes this week.

Now, if we thought that last night was dramatic, we can certainly expect the next couple of days to be quite tumultuous, John.

BERMAN: Yes. The next couple of hours, quite tumultuous.

LEE: Yes.

BERMAN: M.J. Lee for us on Capitol Hill. This health care discussion, really the main event up there, but there is a bit of a sideshow with some implications here. House Republicans are about to unveil their new budget plan, and it might not be the salve that Republicans are looking for to sew some of their divisions.

CNN's Suzanne Malveaux joins us live from Capitol Hill. What do we expect, Suzanne? SUZANNE MALVEAUX, CNN NATIONAL CORRESPONDENT: Amazing, John, when the

budget becomes a sideshow here, but it is critically important. This is going to happen within an hour or so, the House Speaker Paul Ryan and others unveiling this budget.

And essentially, there has been an incredible amount of infighting between conservatives and moderates. The House Freedom Caucus members really pushing for much deeper cuts here.

But also what is critical to know is that they're using a budget tool called reconciliation to allow them to push through tax reform with a simple majority on the Senate side. So that is why this is so critically important.

But here are some of the numbers that we already know that will be revealed, what is in the budget here. On the House side, $621 billion dollars for defense spending, a real priority for this administration. $511 billion for nondefense spending.

And then look to see what they are actually cutting. This is where the Freedom Caucus wants some severe cuts, less spending here. $203 billion when it comes to cuts in mandatory spending programs like Medicare and Social Security over the next 10 years. The conservative members want that number to be even doubled, so we'll see what that looks like.

[09:05:04] Is this going to pass? What is the likelihood of this? Well, we will see the Budget Committee tomorrow actually take this up, take a look at it. If it gets through the Committee itself, it will go to the full House. But that is unclear, John, whether or not they really have the support.

They might have to wait a little bit. It could be a terrible embarrassment if they don't get those numbers and they would need Democrats. If they don't get this budget resolution, they would then need Democrats to actually pass through tax reform on the Senate side -- John.

BERMAN: Yes. And that hasn't been working out so well for them, so far. Suzanne Malveaux, thank you very, very much.

Joining me to talk about the health care thunderclap overnight, Matt Lewis, CNN political commentator, senior columnist at "The Daily Beast"; Caitlyn Huey-Burns, the national political reporter for RealClearPolitics; and Lynn Sweet, Washington bureau chief at "Chicago Sun-Times."

And, Lynn, it was an astute political analyst who said the Republicans would look like dopes if they did not pass the bill to repeal and replace ObamaCare. That analyst was President Trump, who also said, if the Republicans have the House, Senate, and the presidency and they can't pass the health care bill, they're going to look weak.

So is the President right? Do Republicans this morning look like, in his words, weak dopes? LYNN SWEET, WASHINGTON BUREAU CHIEF, THE CHICAGO SUN-TIMES: Well,

dopes is -- I'm not going to go into the loaded -- where it goes, but, John, clearly they have some explaining to do on why they couldn't get a strategy together to do the repeal and replace.

And this repeal is -- there's a big catch to it. It won't be effective for two years at the least. That's really keeping an eye on when that effective date is because it would get you past the midterm elections. In the meantime, it would let some of the lawmakers send out a press release saying we -- you know, we did something at least.

But the reason replace became part of repeal is that health care is a big deal to people, no matter what your ideology or ethnicity, your religion. And if you have a preexisting condition, all of sudden, policy becomes very personal.

BERMAN: So, Caitlyn, now, as Lynn was saying, they're going for repeal and delay or repeal only, but it's a little loaded what the Senate Majority Leader is trying to do here.

He wants to vote on a motion to proceed, and it's technical here, before they then vote on the full repeal. This is a tough vote for Republicans to take here, particularly some moderates. Even moderates who voted for the full repeal in 2015. What are the pressures they face?

CAITLYN HUEY-BURNS, NATIONAL POLITICAL REPORTER, REALCLEARPOLITICS: Exactly. So you have some of these tat were opposed to the bill in the first place that are concerned about, you know, repealing something and replacing it with something that would leave people without insurance, that would perhaps cut into part of the Medicaid program, which is also an interesting discussion among Republicans.

So the idea that if they couldn't go for the replacement plan, the idea that they're supporting a repeal plan without anything else to offer people, I think, is a very tough vote. Meanwhile, you have the more conservative members of the Senate who are wanting a full repeal.

And McConnell could be kind of putting pressure on all of them to say, look, let your vote know. And if you are conservative who has wanted full repeal, here is your chance to do it. And if they don't, that kind of puts them on the line here.

But I think Trump also -- the President also deserves -- will get some of the blame, a lot of the blame here, because he had positioned himself as a dealmaker. And you can argue about his utility during this whole process and the extent to which he let the Congress lead, but he said that he would get this done and didn't.

BERMAN: You mean the golf cart -- golf tournament on Sunday? We'll talk about the President in just a moment. Matt Lewis, I want to say something now because if I don't, I know you will.

On January 25th, you wrote: the Affordable Care Act is a mess. By trying to replace it, it might just create a bigger one and one that, this time, the people will blame on the Republicans. So after you take a bow for predicting this on --

MATT LEWIS, SENIOR COLUMNIST, THE DAILY BEAST: Thank you. Great questions.

BERMAN: -- on January 25th.

LEWIS: Will I make the big bucks?

BERMAN: What happened here? Was it the President playing golf instead of making deals? Was it the fact that it just could never happen with the competing divisions of the Republican Party?

LEWIS: Yes. Look, I think that this was basically doomed before it started for a variety of reasons. Once the public accepts the fact that health care is an entitlement, that it is -- you have a right to health insurance and health care, then the idea of having -- or a truly free market approach doesn't work.

And then it becomes, who can give us the most, right? And so it's hard for a conservative to win against a liberal or the ObamaCare idea that was, who can give us the most?

Fundamentally, once we get past that, Republicans never had a plan. The conservatives spent seven or eight years voting to repeal ObamaCare but never had a coherent idea on how to actually replace it.

And Donald Trump who actually did have somewhat of a nationalist ideology just outsourced it to Republicans. So this isn't even -- he is losing on something that wasn't even a Trumpian policy to begin with. It is a complete mess and debacle.

We are now in June and Republicans have passed nothing of substance. And they may have --

BERMAN: Yes. The worst part is we're in July.

[09:10:04] LEWIS: That's even worse.

BERMAN: I mean, you know --

LEWIS: When did that happen?

BERMAN: Yes.

(LAUGHTER)

BERMAN: I mean, seriously, it's so bad --

LEWIS: Six months in.

BERMAN: It's so bad it's not even June anymore. Lynn Sweet, you know, it's interesting because the President has said two things this morning.

On the one hand, he has said that he wants Republicans to just repeal ObamaCare now. On the other hand, he says, like he said all along, let ObamaCare fail. So are failure and repeal two different things?

SWEET: Yes, they are, and I want to go back to Caitlyn's point. The art of the deal is making something happen. Just doing nothing, you know, doesn't -- you don't need to be a president to do nothing.

Repealing may have the same aftershock effect of helping ObamaCare to fail because we will destabilize the insurance markets. If the free market was the answer to all insurance, we wouldn't have needed ObamaCare. If the free market was the answer to everything, you wouldn't have Medicare existing to insure seniors because the market place would have taken care of it.

So repeal and maybe this motion to proceed might let some lawmakers have a chance, by the way, to split their vote where they could have it both ways when it comes to campaign time, saying, well, I just voted for the motion to proceed so we can have an up or down vote on repeal, but then I voted against repeal. That is a tactic we have seen, you know, for -- used for a long time.

But, now, if you're looking for a stream of consistency in these tweets, you're looking in the wrong place.

BERMAN: Look, just to be clear, the CBO, the Congressional Budget Office, did score repeal only back in 2015. And they essentially said that in Year One, that 18 or 19 million people would lose their insurance. And 10 years out, there would be more than -- 2024, depending on how you measure it, even more than that people without insurance. So repeal only could come at a very high, a similar cost that had most moderates concerned about this to begin with.

Caitlyn, I want to play a game I like to call, you know, what does this mean for. So, you know, what does this mean for the President moving forward, do you think?

HUEY-BURNS: Well, for the President, you know, they -- his argument this whole time, again, was that he was able to change the way that things were done in Washington, that -- and Republicans, at the same time, were arguing getting behind this President, arguing that once Republicans had full control of Washington, they would be able to get their agenda passed.

To your point, it is now July. And Republicans are going to go home presumably next month at some point, we'll see, and without anything to kind of show for it.

This task, beyond the health care component, was a task of governance, a way to show that this party could govern. And so I think it falls on both Republicans and the President that they weren't able to get this done.

And what this bodes for legislations down the line. Tax reform is really hard. It's -- some argue that it's more difficult than ObamaCare.

BERMAN: So, Matt Lewis, one group that Caitlyn left out there is Democrats. So what does this mean for Democrats? What lessons should they take from this? Why should they, from a purely political perspective, look at this and say, hey, everything we're not doing has worked?

LEWIS: Well, I've heard -- I'll say a couple of things. One, I think we're now entering into this repeal phase, right? Remember the sequester? People forget about this.

The whole point of -- we got this sequester which, you know, ended up actually lowering the deficit, but the only reason it happened was because Republicans and Democrats couldn't come together and pass something better.

So the idea that you can play chicken, that Republicans could do that, and actually pass something in two years, I think, is dubious. I think that there's a danger, of course, for Democrats to just sort of say we're going to run against Donald Trump. I think you can do that in the midterms and win. Nancy Pelosi did that against George W. Bush.

But if you don't -- if you never have a coherent philosophy or policy, then you end up where Republicans are now. You're the dog who caught the car. So Democrats had better start developing a proactive sort of, you know, optimistic policies for America if they actually get in power.

BERMAN: Maybe -- just maybe -- Democrats and Republicans will work together and come up with some idea and maybe we will see some unicorns.

Matt Lewis, Caitlyn Huey-Burns, Lynn Sweet, great to have you here with us this morning. Thanks so much guys.

All right. Calls mounting this morning for Jared Kushner to be stripped or lose or never get his security clearance. Sources tell CNN White house staffers are worried that this could happen.

And two of his colleagues just killed the bill he helped put together. Republican Senator John Thune, a member of the Senate Republican leadership joins us to tell us what is next.

Plus, outrage builds over the shooting death of an unarmed woman in Minnesota. We're learning more about the police officer who shot her.

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[09:18:32]

JOHN BERMAN, CNN ANCHOR: All right, we do have some breaking news. CNN has just learned that the vice president of the United States, Mike Pence, will address the collapse of the Republican effort to repeal and replace Obamacare.

The vice president was actively involved in the negotiations lobbying on behalf of the administration. Perhaps the most visible senior member of the administration working to get some kind of a deal through the Senate. Again, that deal just collapsed on itself overnight. Now the president of the United States is calling for a full repeal of Obamacare and waiting on the ideas for how to replace it late later on.

We will hear what the vice president has to say. This could be very, very interesting. So stick around for that.

Meanwhile, new scrutiny this morning over Jared Kushner's participation in a meeting with Russian officials. This as CNN has learned that concerns about the security clearance held by the president's son-in-law, a top aide. Those concerns are growing inside the White House.

Senior Washington correspondent, Joe Johns joins me now with that. Joe, what are you learning?

JOE JOHNS, CNN SENIOR WASHINGTON CORRESPONDENT: Well, it's part of the fallout over that meeting last year that we have been talking about so much over the last week or so, Jared Kushner, obviously a member of the president's family, and also working here at the White House.

He also run the social media operation for the Trump campaign. Concerns about whether that operation may have been infiltrated by the Russians. He holds an interim security clearance at it stands right now.

Some on Capitol Hill, Democrats in particular, have been calling for that interim security clearance to be lifted.

[09:20:06]And CNN's Sara Murray reporting just last night that there are concerns among staffers here that Jared Kushner may not be able to get his final security clearance.

Of course, that is a question that can be asked and answered by the president of the United States. He gets to decide that none the less if the president makes that decision and allows that to be given to him, of course that could create political blowback on Capitol Hill. Back to you, John.

BERMAN: All right, Joe Johns for us at the White House. Joining me to discuss this, Democratic Congressman Mike Quigley is a member of the House Intelligence Committee.

Congressman, thank you so much for being with us. You have been talking about Jared Kushner's security clearance for some time. You said he should not be granted clearance. He should have his temporary clearance revoked. Is that still the case? Do you still believe that?

REP. MIKE QUIGLEY (D), ILLINOIS: Absolutely the case, and unfortunately, the more we learn, the more reasons there are to remove this. When there is a cloud over someone at this higher level, questions arise and that is why the clearance should be removed. I mean, how much leverage do the Russians have over any one of the Trump family, particularly Mr. Kushner? It is not just the meeting that's talked about with people who are involved with Russians.

It is additional allegations of his attempts to establish back channels to the kremlin using of all things Russian Embassy communications. This makes absolutely no sense. These are people who are either dangerously naive or part of a conspiracy.

BERMAN: So you're going back to some of the things that have been reported from back even during the transition. Just to be clear, you know, you are in the Intelligence Committee. You are privy to things that we cannot see.

You said just allegations which is all they are right now as far as we know. Do you have any reason to believe it is more than that? Have you seen proof that we haven't seen?

QUIGLEY: I think it is preferable at this point in time that the investigation continues to talk about the fact that they are allegations, but the fact that they are out there, that the meeting with the Russians with Trump Jr. was public and acknowledged by all those involved, I think it is enough of a cloud to raise.

At some point in time, maybe this gets cleared up. But in the meantime, they're involved with extraordinarily high level of information that they shoul not be able to have.

BERMAN: So let's talk about the subject of that meeting because the White House press secretary, Sean Spicer, talked about it yesterday. He said, "There was nothing as far as we know that would lead anyone to believe that there was anything more than a discussion about adoption and the Magnitsky Act. Do you believe that's the case sitting where you right now, Congressman?

QUIGLEY: Yes. Let's ask ourselves who was in the room, right, Mr. Manafort, Mr. Kushner, the campaign high officials. It's hard to believe that the campaign high officials are going to be worried about Russian adoptions.

It doesn't make sense considering who else was in the room, and the fact that Trump Jr. himself said if that's what it is, I love it, especially at the end of August. It defies all belief.

BERMAN: Well, the fact of the matter is in the e-mail exchange that setup the meeting, the word adoption was not mentioned. That was we do know for a fact, but just to clear something up here, did your committee have any information about this meeting before the details started to become public in the "New York Times" a week and a half ago?

QUIGLEY: Yes, again, I have to be careful not to talk about what was or was not briefed in the committee. Suffice to say it's a great interest to all those investigating the Russian involvement in the election process. BERMAN: Other than -- because we never heard anything about it prior to the middle of June or so. So it was news apparently to a lot of people. It would be curious if it was news to people who have been investigating this day in and day out.

Again, do you have any information about what was discussed inside that meeting other than the concerns about the people who are involved?

QUIGLEY: I think we have a pretty good idea who was involved in the meeting. There was a lot of other questions, was this the first or the last meeting, why were those people in the meeting, was anything exchanged?

Clearly, there are more questions than there are answers at this point in time. It all begs the question, were the candidates minions doing in private? What the candidate himself was doing publicly?

He was publicly saying what a great institution Wikileaks was. He was encouraging the Russians to hack into Mrs. Clinton's e-mails. So the question is, were they just following those public orders?

Obviously, the only way to get to this is if they are willing to testify in committee under oath.

BERMAN: So former National Security Advisor Susan Rice was scheduled to testify before your committee behind closed doors, I believe today, that was pushed back really for the third time, I think. What is it that you want to ask her and what is the difficulty in getting her before your committee?

[09:25:08]QUIGLEY: Again, I can't say who has or will be testifying. I think the questions that will be asked of Ms. Rice about if she comes to testify will be along the lines of whether there were masking and unmasking issues.

That is just what I'm surmising given what my Republicans on the other side of the aisle seemed to be interested in. But again, I can't attest to who has or will testify in closed sessions.

I'm just suggesting that if she does testify, my guess is that my Republican colleagues are interested in masking and unmasking issues if you read and heard what they've talked about before.

BERMAN: You said Republican colleagues, is there anything you're interested in asking her?

QUIGLEY: Well, obviously, when anyone comes to testify their knowledge as to what has taken place so far, and how it moves forward in the investigation, is of great interest to me. I'm just suggesting that Ms. Rice's testimony is of greater interest to the Republicans on the unmasking issue.

BERMAN: All right, Democratic Congressman Mike Quigley, thanks so much for being with us. Appreciate your time.

QUIGLEY: Thank you.

BERMAN: We got some financial news this morning. The dollar has sunk to a ten-month low after the collapse of the health care bill. Here to discuss with me, CNN's chief business correspondent, star of "EARLY START," Christine Romans.

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Good morning, John. This is a real world effect really of a legislative failure quite frankly. What you have around the world are these big questions now about where we go from here on health care reform, trade, budget, taxes, tax reform, and what comes next.

There are concerns about the president's legislative agenda and quite frankly there have been high hopes for all of those things to really boost corporate profits and that's one of the reasons you've seen the stock market doing so well.

So closely watching that here today, the dollar falling a little bit. Watching stocks open in about 4 minutes. The stock market could open a little lower, but stocks have been close to record highs driven by corporate profits.

Companies are making a lot of money. The investor class has very profited greatly under this administration, even as we have been waiting for these legislative things to happen.

So we have had stocks near record highs. We are watching these corporate profits. We heard from Goldman Sachs, Bank of America. We are waiting for United and IBM.

Because remember, John, it is how much money companies are making that is what is reflecting in the stock market. Not necessarily your job opportunities on Main Street, but what's happening on Wall Street, and that's been very, very good.

BERMAN: And you told me all along is that investors are looking at what happens in health care, because what they really care about is tax cuts and that's what they want and if Republicans can't get health care, they concerned they are not going to get their tax cuts.

ROMANS: They want tax cuts, tax reform, too, for the corporate sector and so if you start talking about tax cuts and not tax reforms then that changes the debate too.

BERMAN: All right, Christine Romans, great to have you here. Thanks so much.

A major blow to the president's agenda, now senators hours away from trying to figure out where to go from here. Just repeal Obamacare with no idea of how to replace? Do they have a backup plan? Stick around.

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