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Three Missing Marines after Aircraft Crashes into Water; National Security Adviser H.R. McMaster Indicates President Trump Briefed on Military Options against North Korea; Some Democrats and Republicans to Propose Bipartisan Health Care Bill; Analysts Assess General John Kelly's First Week as Chief of Staff; Economists Examine Current State of U.S. Economy; CNN Hero Provides Comfort to Homeless Children. Aired 10-11a ET

Aired August 05, 2017 - 10:00   ET

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

(COMMERCIAL BREAK)

[10:00:09] UNIDENTIFIED MALE: This is CNN breaking news.

CHRISTI PAUL, CNN ANCHOR: Good morning. We're so grateful to have your company here in the Newsroom. I'm Christi Paul.

VICTOR BLACKWELL, CNN ANCHOR: I'm Victor Blackwell. Good morning to you.

PAUL: Three U.S. marines are missing right now off the coast of Australia. Twenty-three we know have been pulled from the water, as a search and rescue mission is continuing at this hour.

BLACKWELL: The Marine Corps says it started with an incident, which they are calling a mishap, involving an MV-22, the Osprey, trying to land on a ship. Joining us now on the phone from Washington, CNN Pentagon reporter Ryan Browne and on Skype from Oregon, CNN military analyst Lieutenant Colonel Rick Francona. Let's start with the reporting. Ryan, what do you know about what this is and how it happened?

RYAN BROWNE, CNN PENTAGON REPORTER: We don't know much at this point, Victor. We know that this was part of a routine operation, the MV-22 Osprey was attempting to land aboard the USS Bonhomme Richard, a ship that was operating out there on the east coast of Australia. And the plane appears to have gone down into the water. Immediately boats and aircraft from the Bonhomme Richard attempted to rescue the marines aboard. Twenty-three of the 26 have been rescued. Three are still missing. And operations are under way.

The Australian government has also offered support to the U.S. effort, but this is being U.S.-led and primarily by the crew aboard the Bonhomme Richard attempting to locate these three remaining marines. Of course the marines have had some aircraft tragedies in recent weeks, last month losing an AC-130 aircraft over the United States. So again, there is definitely an investigation that is going to be under way but not much known about what brought this aircraft down in this instance. PAUL: Colonel Francona, what do you -- what are your thoughts right

now about the possibility of finding these men in the next, say, hour or two?

LT. COL. RICK FRANCONA (RET), CNN MILITARY ANALYST: Time is critical. The sooner they can get these people out of the water, the better. Fortunately they are in the vicinity of a U.S. warship. I understand this took place right near its landing ship where it was trying to land. So with that resources available in the area they will put every effort they can into this. Getting 23 out of 26 is excellent. That's great news. That shows us good hope that we can get the other three. When you have that kind of resources in the area, there's a chance.

PAUL: All right, Lieutenant Colonel Rick Francona and Ryan Browne, we appreciate the two of you being here with us and your insights as well.

BLACKWELL: More breaking news now. National Security Adviser H.R. McMaster says President Trump has been briefed on military options regarding North Korea. This is what McMaster said to MSNBC.

(BEGIN VIDEO CLIP)

H.R. MCMASTER, NATIONAL SECURITY ADVISER: Are we preparing plans for a preventive war, right, a war that would prevent North Korea from threatening the United States with a nuclear weapon. And the president has been very clear about it. He said he's not going to tolerate North Korea being able to threaten the United States. Look at the nature of that regime if they had nuclear weapons to threaten the United States. It's intolerable from the president's perspective. So of course we have to provide all options to do that. And that includes a military option.

(END VIDEO CLIP)

BLACKWELL: Now, we are hearing this as the Trump administration is wrestling with how to respond to North Korea's escalating nuclear missile aspirations. The country fired at least two separate missiles that experts say put the U.S. in range of Pyongyang's nuclear weapons, those ICBMs we have been discussing.

PAUL: And also this morning in that interview with MSNBC, National Security Adviser H.R. McMaster praised John Kelly and what he brings to the role of White House chief of staff.

(BEGIN VIDEO CLIP)

MCMASTER: People of course see a retired marine corps general, and they recognize he has an extraordinary record of accomplishment within the military, but he also has a broad range of experience now outside the military in homeland security where he took over a very complex organization and made tremendous progress, advancing the president's agenda and our national interests as a cabinet secretary.

But also he's someone who has had extraordinary experience overseas in complex environments which entail operating with people from all departments and agencies with indigenous leadership, with allies. And he also has a lot of experience on the Hill as well. So in terms of experience level, demeanor, leadership ability, it's going to be great for all of us I think in terms of improving our ability to operate together as a team. Now, a lot of conventional wisdom was it's chaotic over there in the White House and everything else. I will just tell you, I am very proud of our national security team overall.

(END VIDEO CLIP)

PAUL: CNN White House reporter Kaitlan Collins is in New Jersey this morning near Bedminster where the president will be spending the next 17 days on a working vacation, as he's calling it. So Kaitlan, first of all, any reaction to this interview from the White House, and what is on the itinerary for the next 17 days for the president?

[10:05:13] KAITLAN COLLINS, CNN WHITE HOUSE CORRESPONDENT: We have not seen a reaction yet from the White House on this interview, but we did get a statement from the president overnight saying he has confidence in H.R. McMaster after there was some criticism from some rightwing circles this week over some decisions he has made as national security adviser.

But we did see him praise John Kelly there. We have really seen John Kelly create a sobering mood here in this very divided West Wing of the White House. We found out from "the New York Times" yesterday that John Kelly is going to great lengths to streamline the information that is getting to the president. He even cuts off rambling advisers in the middle of their sentences. He listens in on phone calls with cabinet secretaries and the president. And he even is booting staffers from high level meetings if they don't need to be there.

We saw him make changes right away when he ousted the 10 day old communications director Anthony Scaramucci because he didn't think he was disciplined enough. And we are seeing him really create a sense of order. Even the president's children, Ivanka Trump and his son-in- law Jared Kushner, are going through Kelly before getting to the president. So we're seeing all of that happen.

We will see if he's still able to keep a tight leash on the president this week while he's here on vacation in Bedminster. The White House is billing this as a working vacation and says the president's only here while the West Wing is undergoing some renovations. Christi?

PAUL: All right, Kaitlan Collins, appreciate it. Thank you.

BLACKWELL: Here to discuss, Ron Brownstein, CNN senior political analyst and senior editor for "The Atlantic," and Betsy Woodruff, politics reporter for "The Daily Beast." Good morning to you.

RON BROWNSTEIN, CNN SENIOR POLITICAL ANALYST: Good morning.

BLACKWELL: So Ron, let's start with this. I want you to listen to what NSA McMaster said about the president's meeting with President Xi of China and how they can work together to influence. (BEGIN VIDEO CLIP)

MCMASTER: Three things that came out of that are first of all, that North Korea, Kim Jong-un armed with nuclear weapons is a threat not only to the United States, not only to our great allies, Japan and South Korea, but also to China. So that's a big acknowledgment.

The second thing was that the goal, the goal of working together with them cannot be the so-called freeze for freeze, where we freeze our training and then they freeze their program, because they are at threshold capability now. Freeze for freeze doesn't work anymore. It's intolerable. So the goal is denuclearization of the peninsula. That's the second big thing.

The third big thing that came out of it is China acknowledged they have tremendous coercive economic influence here. They may not have a great political relationship with Kim Jong-un. Who does these days, right? But they recognize that they do have a great deal of agency and control over that situation.

(END VIDEO CLIP)

BLACKWELL: Ron, first to you. Any evidence that China is willing to use some of that influence? That's been the frustration of the president.

BROWNSTEIN: You know, we talked about this before. It is not unusual for presidents to come in and believe their personal relationships with leaders in other countries erases years of established interests and dynamics between great powers. The reality is that China does share an interest with the U.S. in that they do not want a full-scale crisis on the Korean peninsula, certainly a military crisis. They don't want it to escalate out of control. But neither do they want the North Korean regime undermined. And so there are boundaries in what they are willing to do. And certainly they have historically been willing to do -- to appoint but no further in terms of pressuring North Korea.

And I think as you see from the president's tweets intermittently, that has not changed. Whatever the quality of the relationship between the president and President Xi and how much he liked the chocolate cake at Mar-a-Lago, you have underlying national interests that put a boundary on what we can expect from China. And I think that all evidences are they are continuing to operate within those parameters we have seen them employ with previous presidents.

BLACKWELL: Betsy, we have heard from McMaster there kind of outlining the new strategy of this administration, not the strategic patience of the Obama administration. But Kim Jong-un has accelerated this effort to develop a nuclear weapon with more tests than his father, Kim Jong- il, and his grandfather Kim Il-sung. So is this effective?

BETSY WOODRUFF, POLITICS REPORTER, "THE DAILY BEAST": It's a great question. That's sort of the question of the hour, I think. And part of the challenge as the United States is putting together, its strategy to deal with an increasingly nuclear-capable North Korea, is that for China, their strategic interests are extremely complicated. We have seen the impact of the Syrian refugee crisis on Europe. For China, for President Xi, the prospect of the North Korean regime collapsing is a catastrophic one.

[10:10:03] It's important to remember as we are discussing these issues of North Korea denuclearization just the extraordinary amount of human suffering, human pain that takes place in the country of North Korea, endemic levels of poverty, endemic levels of oppression, malnutrition. If the regime were to collapse, China would have a refugee crisis and a humanitarian crisis on a scale that's almost beyond comparison globally.

So the challenge for them is, how do they balance their interests and the pressure they are receiving from the United States to keep the North Korean regime from flexing its nuclear muscles with, at the same time, China's interest in the regime continuing the way it's going and maintaining a certain level of stability there. The United States, especially given what McMaster said this morning, is potentially looking for some dramatic changes, but from China's perspective, dramatic changes could lead to regional chaos. That's just a major tension here.

BLACKWELL: So Ron, back to you, how much pressure are we seeing from this administration? We saw Mnuchin several weeks ago announce those sanctions against the Chinese bank and he was very clear saying that these are not against China. These sanctions are specifically against the bank. How far is this administration willing to go to avoid using these military options that the president now has?

BROWNSTEIN: Look, first of all, any military -- any talk about military action on North Korea has to wrestle with the fact of how closely, how close Seoul is, Seoul, South Korea, is to the reach of conventional North Korean military assets. Everyone who has looked at this over the years describes this as the land of lousy options because any kind of military option could produce a response that would be devastating on civilian and economic targets in South Korea. So there is that fundamental limit that other presidents have faced, and also the question of whether we really can take out their disbursed, hardened silo nuclear capacity. So there's that.

But I think with China, the reality has always been this is a relationship in which many things are at play at any given point. We have had a succession of presidents who have come in and promised to be tougher in one way or other on China and try to bend China more toward doing what we want them to do and always running up against the limitation that there are many irons in the fire at any given moment. And so here, you have seen the president talking with unusually explicitly about balancing his desire to confront China on trade with the need to stay in harness with China to leverage pressure on North Korea. And those are the dials they are turning back and forth, constantly trying to find a mix that will get the outcome that they want.

BLACKWELL: The president has said he had a ten-minute conversation with President Xi and realized that it wasn't so simple from his classification that maybe they didn't have as much influence as he originally said. Betsy Woodruff, Ron Brownstein, we have to cut it short because we have breaking news we are following this morning. Thank you so much for being with us.

WOODRUFF: Sure thing.

BLACKWELL: Christi?

PAUL: Can Democrats and Republicans ever get on the same page when it comes to health care? We are talking with two lawmakers coming up here. They're from opposite sides of the aisle, but they say they together can bridge this gap.

BLACKWELL: Plus President Trump taking credit for the latest jobs report, but are his policies helping the economy? We will ask our experts to weigh in.

PAUL: Also, the new sheriff in town trying to bring peace and order to the West Wing. How is John Kelly doing as he wraps up his first week as White House chief of staff?

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[10:17:45] PAUL: It was Donald Trump's signature pledge to voters during the 2016 campaign, repeal and replace Obamacare. That promise ran into some really stiff opposition, notably from congressional Republicans, once the president entered the White House. Now despite a stunning defeat in the Senate, Vice President Pence says this fight is not finished.

(BEGIN VIDEO CLIP)

MIKE PENCE, (R) VICE PRESIDENT: My fellow conservatives, let me be clear. This ain't over.

(APPLAUSE)

PENCE: This ain't over by a long shot. President Trump and I are absolutely committed to keep our promise to the American people. We were not elected to save Obamacare. We were elected to repeal and replace it.

(END VIDEO CLIP)

PAUL: Republican Congresswoman Martha McSalley of Arizona with us now as well as Democratic Congressman Kurt Schrader of Oregon, both members of the bipartisan Problem Solvers Caucus. That is a big title with a big job, no doubt about it. Thank you both for being with us. We appreciate it. We want to start with you, Representative McSalley. Does the compromise that you have all come up with meet the vice president's criteria? Does it repeal? Does it replace?

REP. MARTHA MCSALLY, (R) ARMED SERVICES COMMITTEE: Well, I served in the military before coming to Congress, and I think Kurt and I agree, plus other members of the Problem Solvers caucus, we are here to govern. We are here to address the issues facing our country and our constituents. And what we decided to do in this bipartisan problem solvers effort was see where we could agree.

There's a whole lot of discussion about where we disagree, but when it comes to stabilizing the individual market where about seven percent of Americans get their health care, and that's really what is collapsing, 40 percent of counties across the country only have one choice next year. Many increasing numbers have no choice. Premiums are going up over 100 percent in Arizona. Can we find some agreement on this very laser-focused issue on stabilizing the individual market and providing some relief to small businesses?

So we sat down. Kurt and I led the working group, pulled out the white board, and had a very rigorous discussion and debate about our solutions on this. And what we came up with is really a five point plan, is one that we're getting tremendous traction, 43 members of Congress all getting behind it. We have been talking to a lot of senators and others. We really believe that this is going to solve the initial crisis with time running out until 2018 and provide space to continue to discuss the future on a variety of other issues in this complex thing called health care.

[10:20:06] PAUL: OK, so Representative Schrader, where does this stand, then? You have come up with a plan. What's in the plan and where does it go from here?

REP. KURT SCHRADER, (D) OREGON: It's five basic points that were in a lot of the Republican plans, a lot of the Democratic plans that we have had out there for quite some time now, basically to make sure there's a stabilization fund to deal with the higher risk individuals that are skewing that individual marketplace that Martha talked about, make sure those cost sharing subsidies are in play for the very low income folks that just can't even afford a co-pay or even a small deductible.

Help small business. We're peeling back some of the employer mandate, give a little breathing room there. We actually have a lot more opportunity for innovation and flexibility as part of the key plan and some of the waiver processes, allowing plans to work across state lines, be more innovative.

And then we repeal the medical device tax that had, frankly, wide bipartisan support. I think it's looking good. The Senate, Lamar Alexander seeming to take up a work group on the individual marketplace. I know Martha and I are both reaching out to members on the House side, leadership on the House side, see if there's some energy for getting at least the most important thing done right now for health care, stabilizing those individual markets before October and November.

PAUL: OK, so that was my next question. Is there a time frame here, Representative McSally, for this? I do want to ask you, Representative McSalley, a letter that you wrote in the "Arizona Daily Star" just a couple days ago. You said "In 2010 the Democrats passed the most sweeping change to health care in my lifetime without one GOP vote. And for past few months the GOP was trying to do the exact same thing. Despite sincerely held differences in philosophies on many issues, most major legislation resulting in significant change impacting Americans is usually bipartisan at some level." Do you two believe that these 43 members of the problem solvers caucus have been able to craft a plan that will be bipartisan and that will successfully become law?

MCSALLY: Yes, I do believe that. And again, I think the big headline here is that Democrats and Republicans are able to come together from the bottom up and find some solutions that we can agree upon to address the issues that are impacting our constituents. The immediate crisis at hand is the individual market for 2018. Insurers are making their final decisions here in the next four to six weeks. We have got less choices, prices going up. We have got to provide some stabilization, and time is not on our side.

So we found this narrow issue, we solved the problem together, we really broke the fever, breaking through the gridlock to show we can set an example here of finding where we have common ground to solve this problem with very practical solutions, providing relief to families and relief to small businesses. This employer mandate is a big one, moving it from 50 employees to 500. This is going to start allowing small businesses to grow, hire more people, bring them on full-time while also stabilizing the individual market. So I think we set the example here, and I'm really proud to have worked with Kurt and our teammates in the Problem Solvers Caucus to really say, look, stop the bickering, stop the dysfunction. Here's a solution, let's move it forward while we still work on the other issues.

PAUL: Republican Party Schrader, back in March I know you sat down through a 27-hour debate as I read about this. You used descriptions about the Republican bill at the time as misguided, backwards, and dark ages. How quickly do you think what you all together had crafted can actually be implemented, because a lot of people are sitting at home wondering what is in store for them?

SCHRADER: I think it can occur pretty quickly, frankly. As I said, these elements were in a lot of the Republican plans, they have been in Democrats, they have been in the law, ACA, for quite some time, some controversy in the courts on the cost sharing reductions. It's time to end that uncertainty. That's the biggest thing the market is roiling with. If you look at the premiums have been projected, 20 to 25 percent of any increase is because of this uncertainty.

We can show as Congress that we are working together like the problem solvers have done historically, move this process forward. These are simple things I think that members grasp. It's not something new that they have to get their head around. Staff is also up to speed on this. I think we get back in September, this is the beginning of a very hopefully targeted discussion, like Martha talked about, on rescuing the individual marketplace. And there seems to be great unanimity that that is the biggest problem we are facing right now and the most immediate problem. So I'm optimistic if leadership gets on board that we can actually get this done in a very short period.

PAUL: I only have a couple seconds. But Representative McSally, how do you get that leadership on board? This has been such a contentious issue. MCSALLY: We think the first move should be in the Senate. We have

been reaching out on both sides of the aisle, had some very promising discussions. The committees of jurisdiction are moving out with some hearings and legislation in early September.

[10:25:05] We think the first move should be there. And we are continuing to have conversations with the administration and the leadership in the House. If we can get that support, make sure people understand there's wins here on both sides and this --

PAUL: And losses on both sides. There's a lot of give and take.

MCSALLY: Yes.

PAUL: All right, Congressman Schrader and McSally, we appreciate so much both of you being here. Thank you.

MCSALLY: Thanks for having us.

SCHRADER: Thank you.

BLACKWELL: The latest jobs report was a milestone for the Trump administration. One million jobs in six months during this administration. But are the president's economic policies contributing to that growth? We will ask our experts.

PAUL: Former Russian ambassador Sergey Kislyak opening up about his meeting with former national security adviser Michael Flynn. Next, what he says they talked about and what they did not discuss.

(COMMERCIAL BREAK)

[10:30:08] PAUL: Half past the hour. Good Saturday morning to you. I'm Christi Paul.

BLACKWELL: I'm Victor Blackwell. Good morning to you.

New this morning we want to let you know a Northwestern University professor and an Oxford University employee are in custody in California. Police across the country had searched for Wyndham Lathem and Andrew Warren, and they surrendered just last night.

BLACKWELL: Both are suspects in the stabbing death of a cosmetologist in Chicago, Trenton Cornell-Duranleau. He was found dead last week with multiple stab wounds at Lathem's Chicago apartment. On the day of his death, one of the suspects walked into this public library we see here near Chicago and made a $1,000 cash donation in the victim's name. The suspects are waiting to be sent back to Illinois, and we don't know yet if police have discovered a motive for this killing.

The July jobs report has been a major boost for the Trump administration as one million new jobs were added to the economy since the president took office. Now, let's look at July specifically. Unemployment fell to 4.3 percent, a 16 year low here. And the economy gained 209,000 jobs, strong number. Joining me now, Stephen Moore, CNN senior economics analyst and former

Trump adviser and Ken Rogoff, a professor of economics and public policy at Harvard. He was chief economist at the International Monetary Fund. Gentlemen, good morning to you.

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

BLACKWELL: Stephen, let me start with you and these numbers that we're getting. The president said on several occasions that he inherited a mess from the Obama administration, but let's look at the last three years of job growth during the Obama administration. In 2016, more than two million jobs, more than 2.6 million in 2015, the year before nearly three million jobs. Is a million jobs in six months turning things around or is he just keeping pace with 2016 numbers here?

MOORE: Well, this was a blockbuster jobs report. There's just no question about it. We not only saw a lot of new jobs created, we saw jobs almost throughout the economy in terms of different sectors of the economy, including manufacturing and food services and business services. So it was a great -- and the other thing that was really positive is about this report is we finally saw a little bit of wage growth.

I would make the case to you, yes, we had job growth under Barack Obama. What we didn't is any wage growth. I think that was one of the reasons Hillary Clinton lost the election. People don't just want jobs, they want higher paying jobs. So, look, when you combine the record high stock market with record low unemployment and record confidence in the economy right now according to every survey, yes, I think Trump deserves a lot of credit for this. And I think the economy has really finally started to shift into a higher gear.

BLACKWELL: Ken, you heard from Stephen there. What they are seeing is the end of the stagnant wages. Some wage growth. What do you see in the jobs report?

PROF. KEN ROGOFF, ECONOMICS AND PUBLIC POLICY PROFESSOR: Well, it was a great job report, and I agree with Stephen Moore completely there. But I think the economy is like a giant ship. It takes a lot of time to slow down or change course, and we are still in the Obama recovery. President Trump will get credit for it, but the fact is he's done very little so far in policy except I would say, importantly, in the regulation area, where it does encourage businesses. We can question some of the decisions he's made about the environment and such.

So it does -- there has been a boost in confidence. We don't see it in huge investment plans yet. We don't see it in really things that would really grow the economy in the long run. So I think the future lies ahead of what President Trump might or might not be able to accomplish.

BLACKWELL: So Stephen, how much does a president -- credit does a president deserve for the jobs created during their term? If we are coming off 75 months of continuous consecutive job growth from the Obama administration and now coming into six months, adding a million jobs, how much of this credit goes to the president that the Dow closes above 22,000 on any given day?

MOORE: Well, look, I think presidents do deserve credit for what happens on their watch. Now, Donald Trump has only been president for six months or so, so it's still early in the game. I agree entirely with Ken that when the rubber really hits the road is whether he can get his economic plan passed. He has done some of the deregulation. That's helped a lot in the energy sector, for example, where we are seeing the coal industry come back and a lot of drilling and mining jobs.

But I think that the big deal right now for the economy is getting this tax cut passed, especially given the failure Republicans had on Obamacare which has been a big negative for the economy. You got to get this tax cut bill done. I'm a big advocate of it. I worked on that plan with Donald Trump on the campaign. I think you will see a big increase in growth in jobs and wages if we get that tax cut passed.

[10:35:06] And if we don't get it passed, by the way, I think some of those record high stock market rallies, you are going to see maybe a sell-off if investors and businesses don't think the Republicans can get their act together.

BLACKWELL: So Ken, to you. Your degree of confidence that this tax reform can happen? When Reagan worked to reform taxes, it took years to do. He was far more popular than the current president. Is it possible, are you confident that this can happen?

ROGOFF: It's hard to be confident about anything in Washington these days, so no, I'm not confident. I do think that corporate tax reform, great idea. We have not just high corporate taxes, we have a bad system. It's part of why companies are keeping profits abroad.

The individual income tax, I just don't see that as being a boost for the average American worker. I don't think we are in that kind of economy that we were with Reagan. There is this grinding downward pressure on wages coming from globalization, mechanization, and running this play, we did it under Reagan, we did it under Bush, doing it again, I don't think it is going to lead to that much growth.

BLACKWELL: Stephen, quickly to you.

MOORE: I agree with -- let me just say, I agree with that. I think we both agree most of the real juice from this tax cut really comes on the business side where we have the highest corporate tax rate in the world. It is leading to businesses and factories leaving. Ken, I have been trying to urge the White House and Congress, focus on those business tax cuts. But you can't just do it for corporations. It also has to be for small businesses as well.

BLACKWELL: All right, Stephen, Ken, thank you both.

ROGOFF: Absolutely. Thank you.

MOORE: Thank you.

BLACKWELL: Christi?

PAUL: Still to come, "We only talked about the simple things." That is a quote from Russia's former ambassador to the U.S. describing his conversations with the former national security adviser. What were those simple things?

BLACKWELL: Plus, more military discipline coming to the West Wing. Will it work long-term? The national security adviser weighing in.

(COMMERCIAL BREAK)

[10:41:11] PAUL: Former Russian ambassador Sergey Kislyak says he talked about terrorism among a number of other issues when he met with former national security adviser Michael Flynn.

BLACKWELL: This was in an interview with Russian state media. Kislyak said their conversation was simple, transparent, and important to U.S./Russian cooperation. CNN correspondent Oren Liebermann in Moscow has more details for us. I think the newsworthy element here is what the former ambassador says they did not discuss.

OREN LIEBERMANN, CNN CORRESPONDENT: That's right. He says they didn't talk about sanctions. He says they didn't talk about Flynn's resignation, or he said he wouldn't talk about that. So he left quite a few questions there unanswered. And when the Russia 24, the state news or state-run Russia 24 interviewers tried to press him on that a little bit, he said I'm not getting into a private conversation.

As you pointed out, he said it was transparent, it was simple. He also said there were no secrets there, at least not from the Russian side. Now, we know the former Russian ambassador to the U.S., Sergey Kislyak, has had connections with Michael Flynn in the past. They have known each other for years. The part that we are interested in is the Trump transition. This is where Flynn talked to Kislyak. This is as Flynn himself comes under increased scrutiny from special counsel Robert Mueller.

Now, as all this is happening, it's Secretary of State Rex Tillerson who is in the Philippines, he's set to meet his Russian counterpart, Foreign Minister Sergey Lavrov. The two of them have both essentially said relations between the U.S. and Russia are at their worst, the worst they have been in years if not decades. The two seemed to have a good relationship, but whether they can do anything to improve relations between the U.S. and Russia, that seems at this point doubtful. They have said they will talk about North Korea, which is where the U.S. and Russia see eye-to-eye. They will talk about sanctions and talk about relations.

So what is Russian president Vladimir Putin doing in the middle of this? He seems to be taking this in a very nonchalant fashion. He is on an official trip to the Russian far east where Russian state media has put out video of him and pictures of him shirtless pike fishing there. So he doesn't seem too bothered by any of this of at the moment.

BLACKWELL: Because you just can't fish with a shirt. (LAUGHTER)

BLACKWELL: I have tried. It's impossible. You just can't do it. Oren Liebermann for us there in Moscow, thanks so much.

PAUL: You can't ride a horse without one, either.

BLACKWELL: You have to be shirtless with a horse ride.

PAUL: Mission impossible, that's how our next guest described the job facing new chief of staff John Kelly. Has the retired marine general's first week on the job at the White House changed his mind?

(COMMERCIAL BREAK)

[10:48:03] PAUL: National security adviser H.R. McMaster weighing in on changes in the West Wing this morning. He says new chief of staff John Kelly commands respect and reports of chaos have been overblown.

(BEGIN VIDEO CLIP)

H.R. MCMASTER, NATIONAL SECURITY ADVISER: People of course see a retired Marine Corps general, and they recognize he has an extraordinary record of accomplishment within the military. But he also has a broad range of experience now outside the military. A lot of the conventional wisdom was, gosh, it's chaotic over there in the White House and everything else. I'll just tell you, I am very proud of our national security team overall.

(END VIDEO CLIP)

PAUL: Chris Whipple is with us now, author of "The Gatekeepers, How the White House Chiefs of Staff Define Every Presidency." Chris, so good to have you back with us. This is not a typical presidency as we have seen. So the fact that you said the last time you were here, military leaders don't necessarily always make good chiefs of staffs. Do you think that General Kelly can change history?

CHRIS WHIPPLE, AUTHOR, "THE GATEKEEPERS": Well, you know, I read that Leon Panetta had suggested that Kelly go out and get a big bottle of scotch. I think he better really keep it close by.

Look, nobody doubts his military discipline and his ability to run a tight ship, and we have already seen some positive steps -- getting rid of Scaramucci, the door to the Oval Office has been closed more than it's ever been. He appears to be enforcing a chain of command with advisers going through him to Trump. All of that's good.

Now comes the really hard part. Among other things, the White House chief of staff has to be the so-called honest broker of information. He has to be the person who tees up on every side of tough decisions, verifiable information and options for the president. One of the big problems here is he's dealing with a president with no respect for facts.

[10:50:00] This is a president who lies repeatedly, who lies unabashedly. He doesn't just lie until he gets caught. He lies when he gets caught. That makes it really difficult to govern. And quite frankly, that's a herculean job for any chief of staff to deal with, even Leon Panetta or James Baker.

PAUL: I want to read you something from "The New York Times." It says "Mr. Kelly cuts off rambling advisers mid-sentence. He listens in on conversations between cabinet secretaries and the president. He's booted lingering staff members out of high level meetings and ordered the doors of the Oval Office closed to discourage strays. He fired Anthony Scaramucci," as you said, "and has demanded that even Mr. Trump's family check with him if they want face time with the president." When you read all of those things that he's trying to implement, surely the president has to agree to some of that as well.

WHIPPLE: Look, all of that's fine. But I read where he had said to his friends apparently that he wasn't going -- he was just going to manage down. He was going to manage the staff and not try to manage the president. Well, the truth is that the White House chief of staff has to do both. As Leon Panetta and James Baker found out, the White House chief of staff is the one person who can walk into the Oval Office, close the door behind him, and tell the president what he does not want to hear. Reince Priebus was unable to do that.

Just to give you some examples here, if the Russia scandal, if that darkening cloud finally does get to Donald Trump, one of the reasons will be White House chief malpractice. No competent chief should have allowed Donald Trump in a room alone with James Comey where he could obstruct justice as he apparently did. No competent White House chief should allow Donald Trump in a cabin on Air Force One with Donald Trump Jr., dictating a statement about meetings with the Russians, if that's what happened. So there are real consequences when the White House chief doesn't speak hard truths to the president.

PAUL: But now, we are just getting word here that White House Chief of Staff John Kelly as well as some other administration officials are with the president at Bedminster, where the president will be for the next 17 days, that in the next couple weeks they are going to have meetings with lawmakers, and that he has already this morning briefed the president on the MV-22 Osprey mishap off the coast of Australia. It seems as though President Trump is opening his arms to this man. Do you get that sense?

WHIPPLE: Well, look, I get the sense that it's been a much better run operation since Kelly replaced Priebus. There's no question about it. But again, that, in my opinion, is the easy part. Making the trains run is only a small part of the job. By the way, I think there have been some very good moves by Kelly but some rookie mistakes as well.

I don't think, you know, I don't think attacking the press is a good strategy going forward. It may amuse Donald Trump. It may excite the base. But I think that we have seen this play before. We saw this script executed by Richard Nixon when H.R. Haldeman was out attacking the press, if you remember, the effete corps of impotent snobs. It never ends well. There's already a kind of Nixonian flavor to this White House. And I think it was a real mistake at that last press conference, and I think Kelly really should have handled it better. PAUL: We will see what happens from this point on. Chris Whipple,

author of "The Gatekeepers, How the White House Chiefs of Staff Define Every Presidency," we appreciate your thoughts. Thank you.

WHIPPLE: Thanks for having me.

BLACKWELL: The FBI watched Twitter and Facebook on Election Day last year, tracking Russian fake news campaigns. The question that Democrats want answered, did the Trump campaign participate at all in this effort?

(COMMERCIAL BREAK)

[10:58:40] PAUL: At age 14, this week's CNN hero, Mariuma Ben Yosef was living alone on the streets.

BLACKWELL: After years of struggling she managed to stabilize her life. And for the past 32 years, now, she's dedicated that life to helping young people who need her in Israel, providing them not only a safe haven but something more -- family.

(BEGIN VIDEO CLIP)

MARIUMA BEN YOSEF, CNN HERO: To be homeless at a young age, it's very lonely. When you don't have your family, you will sense discord. I know exactly what they're going through. I want children to breathe. I want them to feel alive. I want them to feel secure, I want them to feel that they can be hugged and they will not be in danger. We can see it in the different way and win life.

(END VIDEO CLIP)

BLACKWELL: To see how Mariuma helps these young people win at life, go to CNNHeroes.com, and while you're there, nominate someone you think should be a 2017 CNN hero.

PAUL: And we hope that you make some great memories today. Thank you for sharing your morning with us. We always appreciate it.

BLACKWELL: Much more ahead in the next hour of CNN Newsroom. We turn it over to Fredricka Whitfield.

FREDRICKA WHITFIELD, CNN ANCHOR: Hello to you, good morning, now busy afternoon.

PAUL: Yes.

WHITFIELD: You all make the most of it. Thanks so much, good to see you.

BLACKWELL: Thanks, Fred.

WHITFIELD: All right, it is the 11:00 eastern hour. I'm Fredericka Whitfield. Newsroom starts right now.

And we begin with new major developments in the investigation into Russia's role in the 2016 presidential race.