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Secretary Mattis Warns North Korea on Massive Military Response; Interview with Representative Vicente Gonzalez; Congress Returns to Jam-packed Agenda; Aired 6-7p ET

Aired September 3, 2017 - 18:00   ET

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


[18:00:00] TOM SATER, AMS METEOROLOGIST: Let me just explain it, we're going to have the possibility of a Florida landfall or a Carolinas landfall. We'll know more in the next couple of days, that would be on 9/11.

We have one saving grace, Ana, and that it gets pulled up and just skirts the coast and pulls it away. So again, that's what we're hoping for right now. But anything goes we'll know more in about two more days. It does not look good, category 4 or 5.

ANA CABRERA, CNN ANCHOR: All right. Does not look good. Fingers crossed.

Tom Sater, thank you so much.

You are in the CNN NEWSROOM. Top of the hour. I'm Ana Cabrera in New York. Thanks for joining us.

Tonight, a defiant North Korea says it has just tested a hydrogen bomb. Its most powerful nuclear test ever. And the U.S. responds with a fresh direct warning to the Kim Jong-un regime.

North Korea claims it detonated an advanced hydrogen bomb that can be mounted on a long-range missile. It is the country's sixth nuclear test, the first since President Trump took office. Defense Secretary James Mattis did not mince words during a statement he made outside the White House this afternoon where he warned any North Korean threats to the U.S. or its allies will be met with a, quote, "massive military response." Watch.

(BEGIN VIDEO CLIP)

JAMES MATTIS, DEFENSE SECRETARY: We had a small group National Security meeting today with the president and the vice president about the latest provocation on the Korean peninsula. We have many military options. And the president wanted to be briefed on each one of them. We made clear that we have the ability to defend ourselves and our allies, South Korea and Japan, from any attack. And our commitments among the allies are ironclad.

Any threat to the United States or its territories including Guam, or our allies will be met with a massive military response. A response both effective and overwhelming. Kim Jong-un should take heed in the United Nations Security Council's unified voice. All members unanimously agreed on the threat North Korea poses and they remain unanimous in their commitment to the denuclearization of the Korean peninsula. Because we are not looking to the total annihilation of a country, namely North Korea. But as I said, we have many options to do so.

Thank you very much, ladies and gentlemen.

(END VIDEO CLIP)

CABRERA: He took no questions. And with that, he returned to the White House.

The U.N. Security Council is now going to hold an emergency meeting tomorrow morning at 10:00 Eastern to discuss North Korea's latest provocation.

CNN has every angle of this story covered. We have Ian Lee in Seoul, South Korea, Athena Jones outside the White House, and Barbara Starr at the Pentagon with more on the possible U.S. military options. But let's start with Athena outside the White House.

Tell us about President Trump's new economic threat.

ATHENA JONES, CNN WHITE HOUSE CORRESPONDENT: Hi, Ana, I want to get to that and right away, but first, we just got a readout from the White House of the president's most recent call with Japanese Prime Minister Shinzo Abe. And I want to read to you from it just a little bit.

The two leaders condemned North Korea's continued destabilizing and provocative actions and confirmed the two countries' ironclad mutual defense commitments and pledge to continue close cooperation.

That word "ironclad" is a word we heard from Defense Secretary Jim Mattis as well. The statement goes on to say, the president reaffirmed the commitment of the U.S. to defending our homeland, territories, and allies using the full range of diplomatic, conventional and nuclear capabilities at our disposal.

And as you mentioned there, the president also -- you heard Jim Mattis talk about military options. The president has sent out several tweets today responding to this latest test by North Korea. The most recent of those tweets talks about another option, an economic option. He said in that tweet, "The United States is considering, in addition to other options, stopping all trade with any country doing business with North Korea."

That tweet echoes what the president's Treasury secretary, Steve Mnuchin, said on FOX News. Mnuchin said that he's drafting a package for the president's consideration that would go as far as cutting off all trade and other business with countries that are doing business with North Korea. The idea here of course being to isolate North Korea economically in addition to the diplomatic pressure and the sanctions that have been placed on North Korea.

The key issue here, though, Ana, is that China is North Korea's biggest trading partner, its main trading partner. 90 percent of the trade, it accounts for 90 percent of North Korea's trade. And so that's a pretty big threat, to say that the U.S. is considering cutting off its own trade and business with a country like China.

China is one of the U.S.'s largest trading partners, total trade totaled $650 billion last year -- Ana.

CABRERA: Think about all the goods we get from China. Thank you, Athena Jones.

Barbara Starr is with us now. And experts have said it's nearly impossible to verify with certainty North Korea's claims that it detonated this hydrogen bomb.

Barbara, how would the U.S. go about that trying to confirm it?

[18:05:06] BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, one of the things they've typically done in the past is there are spy planes, U.S. military spy planes with very highly classified, very technical sensors on board that basically do air sampling. It will happen a few days after the test because the plume, if you will, if there's a radioactive plume, it has to move up into the atmosphere and it has be in international airspace where these planes can get to it.

This is one of the key methods that they have used in the past to determine what type of explosion was conducted because it helps them, when they get the air sample, they can then determine what radioactive material, what isotopes are actually in the air. But, and this is a big but, what we are learning is right now today at least the prevailing winds in that area are headed north. And that might carry any air samples north into China, into Russia.

There would be international sensor networks there that could report some of the activity. But it might not let the U.S. get exactly what it would like to get. Still, they are looking at seismic activity. And the conclusion is this was the biggest test that the North Koreans have conducted so far.

CABRERA: Barbara, that statement we played from the Defense Secretary James Mattis was brief, it was direct, he was specific. What's your read? And the fact that it came from the Defense secretary.

STARR: Well, the fact that it was him with General Dunford standing next to him, very much noticed. Neither of these guys likes to appear in front of television cameras. And they came out of the White House delivering this very carefully crafted message. And part of the message was, it was them doing it, it was not the president, it was not the political side of the house, if you will.

This is very much a military message, telling Kim that the U.S. does have military options and it would use massive force if it came to it, if there was a threat, if there was an attack. But also, as others have indicated, very much telling the allies that whatever might be said in tweets, the U.S. has an ironclad commitment to defend South Korea and to defend Japan. That will be very key. That will be very important for those countries to hear. CABRERA: Let me bring in Ian Lee now in Seoul, South Korea. We're

getting some breaking news just learning about a new missile drill there in South Korea. What are you hearing, Ian?

IAN LEE, CNN INTERNATIONAL CORRESPONDENT: That's right, Ana. Early this morning we're hearing from South Korean officials saying that they carried out ballistic missile tests that were designed to showcase their strong response. They also said that they carried out tests from surface -- air to surface missiles from their F-15s.

This is all part of what we've heard from the South Koreans, saying that they're going to respond strongly. The South Korean chief of national security spelled out further what they plan to do.

(BEGIN VIDEOTAPE)

CHUNG EUI-YONG, SOUTH KOREA'S CHIEF OF NATIONAL SECURITY (through translator): With the continued provocation of ICBM level missile launch, President Moon has ordered the most powerful response to condemn North Korea, along with the international society, and decided to seek diplomatic measures such as pushing ahead for UNSC resolution to completely isolate North Korea.

(END VIDEO CLIP)

LEE: Ana, that is just one of the two steps they really are going to take. You can look at it, where the one side, they're going to have these military exercises. They say they're going to cooperate more closely with the United States. Also calling for the most powerful, most advanced strategic U.S. military assets to come to the peninsula, although they didn't specify what that exactly means.

But also they're going to go to the international community. They want a strong, united approach to North Korea that isolates the country, both diplomatically and economically. And they believe that they will have the power and they will have the response, especially after this nuclear test, they will have a unified international community, Ana.

CABRERA: All right. Our thanks to Ian Lee, Athena Jones, as well as Barbara Starr. We appreciate it.

Still to come, as Harvey survivors began to dig through what's left of their homes, another storm is now gaining strength. In Washington the growing debate over federal aid. And I'll ask a Texas congressman to weigh in next.

You're live in the CNN NEWSROOM.

(COMMERCIAL BREAK)

[18:13:51] CABRERA: Congress returns to Washington this week and there is a lot on their plate, from funding for Hurricane Harvey relief to the debt ceiling, and then there is the president's decision on DACA. The White House says that will be announced on Tuesday. And my next guest is from Texas, he's also a member of the Congressional Hispanic Caucus.

Congressman Vicente Gonzalez is joining us now.

Thank you so much for being here. I want to start with the funding to help people in your home state affected by Harvey. The president has said he expects the funds to be approved quickly. Treasury Secretary Steve Mnuchin said it should be tied to the debt ceiling. Let's listen.

(BEGIN VIDEO CLIP)

STEVE MNUCHIN, TREASURY SECRETARY: The president and I believe that it should be tied to the Harvey funding. That our first priority is to make sure that the state gets money, it is critical. And to do that, we need to make sure we raise the debt limit. So if we -- if Congress appropriates the money but I don't have the ability to borrow more money and pay for it, we're not going to be able to get that money to the state.

So we need to put politics aside and we're going to be urging Congress to get both of those things done as quickly as you can.

(END VIDEO CLIP)

CABRERA: Congressman, I know you want that money to come and help your people as soon as possible. Would you be on board to tie the two together?

[18:15:03] REP. VICENTE GONZALEZ (D), TEXAS: Well, we need to look at it. But I can assure you that one thing we should not be using folks who are devastated in this area as political pawns in negotiating the debt ceiling. I think we need to appropriate that money immediately. We need to help our brothers and sisters on the coastal area of Texas and get them back into their homes, get them back into schools.

We have children -- thousands and thousands of children who are out of school and are completely displaced. And we shouldn't be playing politics one way or another regarding the debt ceiling. We need to get this money to them immediately.

CABRERA: Did you hear the Treasury secretary playing politics with what he said?

GONZALEZ: Well, what he said was that he wanted to tie it to the debt ceiling. And says we --

(CROSSTALK)

CABRERA: He said so that it could happen as quickly as possible is what his reasoning for that.

GONZALEZ: Right. And I think we need to appropriate that money regardless if we come to an agreement on the debt ceiling or not. Now we do need to look at the debt ceiling issue on its own. But I don't think we should be playing politics on this devastation regardless of where you are on the debt ceiling issue. We need to appropriate this money. Congress can do it. And I think we need to do it immediately.

CABRERA: And I know you've signed a letter asking for the FEMA money to be disbursed in advance rather than reimbursed, which has been the case in the past. How would that work?

GONZALEZ: That's right. We're trying to get folks to not have to turn in bills and receipts after they've been spent by cities and municipalities, counties, and the state. I think we should make advanced payment on this and get it disbursed to folks who need it. And we shouldn't drag our feet on this. I hope it's the first issue we take up in the House. And I think it's a no-brainer.

Americans have come together for folks who have been affected. It's been a beautiful display of unity here in Texas. I really appreciate that. And I hope that we see the same in Congress.

CABRERA: One last follow on this. How quickly -- because you know the legislative process better than me and some of our viewers. How quickly could that funding be approved by Congress?

GONZALEZ: Well, I hope we can do it Tuesday when we get together. I think it's just past issue that gets proposed, it gets voted on, and it's voted on in the Senate, and the president agrees and signs and we get it done. I don't think that's something that should take days or weeks. I think that we should be working on it now and it should be on our agenda on Tuesday.

CABRERA: All right. Let me ask you about DACA as well, because we're expecting a decision also on Tuesday from the president on whether to end this program that protects undocumented immigrants brought to the U.S. as children. It gives them work permits, allows them to go to college.

Earlier this summer I know you were invited by the president to a private dinner at the White House. Have you talked to him about this issue specifically?

GONZALEZ: Yes. We've written him a letter. We hope that he makes the right decision and supports these children. These are children who came here by no choice of their own. They have their American culture, they're American educated. We've invested billions of dollars into getting them where they are now. We have 800,000 of them. And I think that they should have a path to citizenship.

I had a young lady who was an intern in my congressional office in Washington this summer who, when I was invited to the White House picnic, I invited her and didn't know that she in fact was a Dreamer. And we went through some complications to get her into the White House. The White House agreed. And she's an amazing young lady that's going to university in the Dallas area. She's going to be a social worker. She's a productive citizen of this country.

And the vast majority of these 800,000 fit into this category. And we should not miss this opportunity. And I think the president should do the right thing and approve the continuation of DACA. CABRERA: Regardless of what the president does, though, Congress does

have the power to protect these people, these undocumented immigrants. We've heard from several members on both sides of the aisle who say they want to do that. What do you see as the best way forward?

GONZALEZ: Well, I hope we can agree on both sides of the aisle that these 800,000 kids who came to this country by no choice of their own have the right to be here, have the right to become U.S. citizens. They're already participating in society.

CABRERA: Right.

GONZALEZ: And I don't think -- I think that we need to be good human beings when we think about making this decision, coming up on DACA.

CABRERA: Do you support the legislation that Representative Kaufman, he's a Republican from Colorado? He has put forward, it's called the Bridge Act is my understanding. We talked to him yesterday and he wants to see a vote on that as soon as possible in order to do exactly what you're saying, and protecting those 800,000 who currently have some protections under DACA.

GONZALEZ: Yes, I do, I absolutely support that legislation.

CABRERA: All right. Congressman Vicente Gonzalez, thank you so much for your time. We look forward to talking to you also down the road because we know this issue about immigration is not going away.

GONZALEZ: Thank you.

CABRERA: And as you just heard, Congress returns to Washington with a very full plate. But can the president and his own party come together to get a legislative win?

[18:20:10] We'll discuss more of the politics live in the CNN NEWSROOM next.

(COMMERCIAL BREAK)

CABRERA: We mentioned a few moments ago how Congress returns to work on Tuesday after a month-long recess. And while a Harvey relief bill is suddenly an urgent priority, it is just one of several important items on the lawmakers' agenda just for the month of September.

Congress also needs to raise the debt ceiling to avoid a default, pass a spending bill to avoid a government shutdown, pass a health care bill if Republicans want to take advantage of that simple majority vote in the Senate.

[18:55:04] So far this year they have scored zero major legislative wins even though they have control of Congress and the White House.

Let's talk, joining us Jeff Ballabon. He is a member of President Trump's Reflection Campaign Advisory Board, CNN political contributor and former Philadelphia mayor, Michael Nutter, and senior political reporter and politics managing editor for "The Huffing Post," Amanda Terkel.

So, Amanda, when you look at everything we just listed that Congress has to get done this month, where do Republican lawmakers and the president actually align?

AMANDA TERKEL, POLITICS MANAGING EDITOR, THE HUFFINGTON POST: Well, I think that in a lot of ways Hurricane Harvey has brought them together a little bit more. You heard President Trump earlier say that he was willing to shut the government down unless Congress appropriated the money he wanted to build his border wall, which a lot of lawmakers are like, I don't really know if this is the time to do it when we need to keep the government open.

But now the administration has said that they are backing off that a little bit. It's more important to keep the government open, to appropriate money to help Hurricane Harvey victims. And you're even hearing some lawmakers say -- you know, sound a little more conciliatory on the debt ceiling. So I think in a lot of way the Congress and the Trump administration realize that all eyes are on them, that the public wants to see a functioning government. They don't want to see everything, you know, fall apart right now. And so there may be more things happening a little more smoothly than we thought they would.

CABRERA: Jeff, I want to ask you about just how much influence the president has right now over the process because some officials have been openly defying him. We have senior Republicans telling him not to end DACA. We have Secretary Mattis who won't immediately implement his transgender ban in the military.

The Senate who hasn't passed the health care. Member of his own Cabinet have slammed his response to Charlottesville. North Korea doesn't seem too scared despite the president's threats. CEOs are bouncing from his councils. And Republicans have refused to drop or delegitimize the Russia probe. So is the president losing influence?

JEFF BALLABON, MEMBER, DONALD J. TRUMP FOR PRESIDENT ADVISORY BOARD: I don't think the president is losing influence at all. And in fact I think that his performance in recent days has been a really unifying rallying point in a very difficult situation. I think the people in Washington are paying close attention to that and realize that now is the time really to work together for the good of the country.

The president frequently voices and behaves in a very unifying way but when it gets filtered through politics and media, that gets skewed. I think that enough people have seen it firsthand that hopefully, hopefully the message now, after we've gone through such difficulty is that it's time to move the agenda forward. And hopefully that will actually enhance not just his influence but the way the rest of Washington is behaving in terms of working together with the White House.

CABRERA: Mayor, I take it you don't agree that the president often behaves in a unifying way.

(LAUGHTER) MICHAEL NUTTER, CNN CONTRIBUTOR: Yes. Well, he was doing well when he talked about the president's response to Harvey. After that, that argument really fell apart. About 99 out of 100 problems that the president has are self-inflicted. He causes himself and steps on his own message and undermines his own staff. He has tried to demonstrate over the past week or so that he is fully focused on Harvey -- Hurricane Harvey and the citizens who have been devastated by it.

I think this is that moment, Ana, where, as an executive, you have to start making some priority decisions. And so you ran through a list of a dozen different things. But, you know, you can't do all of those things on the first day back. You probably can't do them all in September. So what's important? Hurricane Harvey and its victims, debt ceiling, and a spending plan for the government. That's not bad for the month of September.

Most of those other things are policy issues that can wait. These are either for people who have been devastated or causing concerns about the credibility of the government of the United States of America, our ability to pay our bills or spend money. And so as an executive, again, you have to make some decisions. As legislators, you know, they're going to have a big, big plate, and a lot of things that they want to do.

The president is the president, and should use his influence and his ability to communicate clearly in ways that articulate, this is what is important, these are the things I care about, this is what must get done, one, two, three, four, you know, in some kind of order.

CABRERA: OK. So if Congress doesn't get legislation passed, Amanda, are voters going to blame President Trump or Congress?

TERKEL: I mean, they should blame both because -- I mean, they should blame Republicans because Republicans control the White House, they control both branches of Congress. And you know, this is what voters heard for years, you know, give us power and we can get things done. In fact they haven't been able to repeal Obamacare which they've been promising for years and years.

And you know, the question is, if they can't even sort of keep the government running, for example, or raise the debt ceiling, these sort of basic, necessary things that government needs to do, what can they do?

Now, Trump has already sort of tried to deflect some of the blame on Congress, saying, you know, Congress isn't going along with me. They aren't doing what I want them to do. And he's already, I think, sensing that there might be some dissatisfaction, and he's trying to push it onto these Republican members and sort of separate himself a little bit.

ANA CABRERA, CNN ANCHOR: Mayor Nutter, do you think Harvey could be a unifier and make it easier to get some of this legislation through if Democrats and Republicans actually working together?

MAYOR MICHAEL NUTTER, PHILADELPHIA, PENNSYLVANIA: Well, it seems to me that the devastation and the deaths and destruction in Texas, the impact on the rest of the south, should take most of the politics out of what's a pretty straightforward decision. And that really should, literally, be the first thing that the Congress takes up.

The President has sent over, you know, a small amount of money that's needed. The real figure is probably north of $100 billion, but he sent a figure nonetheless. Congress should take that up immediately, and then get those dollars out to where they need to go and then figure out how they pay for the longer-term recovery.

And then the other two items as have been mentioned, debt ceiling and spending plan. Again, we can't default on our bills and we need to, for things that we've already paid for -- I mean spent money for, and we need to pay for. And then, you know --

CABRERA: Right.

NUTTER: -- we need a spending plan as we come up to the end of September. So they know what they need to do, and they need to just do their jobs.

CABRERA: Jeff, I want to ask you about this letter CNN has obtained. It's a letter former President Obama left for President Trump when he left office. And in it, President Obama gives some advice.

At one point he writes, we are just temporary occupants of this office. That makes us guardians of those democratic institutions and traditions. Regardless of the push and pull of daily politics, it's up to us to leave those instruments of our democracy at least as strong as we found them.

Do you think President Trump is following the former president's advice?

JEFF BALLABON, REPUBLICAN STRATEGIST: Well, you know, the -- Mayor Nutter's response to what I said is sort of indicative of part of the problem here, which was, you know, he thought -- he was -- he laughed.

He thought it was being cynical, or maybe he thought I was being cynical, but I actually do hear a unifying message when the President speaks. And I think that people don't let it get through, and it keeps getting filtered through people with a political agenda and another agenda.

So you could look at this letter in one of two ways. You could take it at face value. In its face value, it's a warm and important letter. It's an encouraging letter, and it's an insightful letter.

Or you could be cynical about it also. I mean, there are plenty of times where it's easy to point to President Obama as someone who didn't respect the democratic process.

I think I prefer and I think most Americans, including the President, would prefer, especially right now in light of what took -- what's taking place in Texas and the Gulf, to really view it more positively. And in fact, it's been reported that the President -- that President Trump's reaction to the letter was a very positive one and that he cherishes that letter. Again, it's a report, I don't know that personally.

But I think, again, you could look at things and be cynical about them, or you could try and look at our better angels. And in this case, I think if you look at it that way, it's a good and positive letter. And if you let -- if you watch what the President is doing as opposed to listening to what the critics are trying to make of it, I think he is trying to strengthen our institutions and strengthen America.

CABRERA: He does have an approval -- or approval rating right now in the mid-30s, so there's little bit of a ways to go to get everybody together and united on that front. Jeff Ballabon --

NUTTER: That's true.

CABRERA: -- Michael Nutter, and Amanda Terkel, thank you so much. Wish we had more time to continue our conversation.

NUTTER: Thanks, Ana.

CABRERA: We'll have you all back.

BALLABON: Thank you.

CABRERA: North Korea has conducted a nuclear bomb test. Big news, South Korea now responding this hour with its own show of force, a ballistic missile drill. More on that straight ahead, live in the CNN NEWSROOM.

(COMMERCIAL BREAK)

[18:38:35] CABRERA: I want to talk more now about North Korea's most powerful nuclear test to date and the global response.

Joining us now, former U.S. ambassador to China, Max Baucus. He also represented Montana in the U.S. Senate for more than three decades.

Ambassador, thank you for spending time with us.

MAX BAUCUS, FORMER UNITED STATES AMBASSADOR TO CHINA: You bet.

CABRERA: Experts are still working to verify this test, but if the preliminary reports are true that they tested a bomb several times more powerful than the ones dropped on Hiroshima and Nagasaki in World War II, how big of a threat does this development pose to the U.S. and our allies?

BAUCUS: It's clearly unacceptable, one, because of the threat to the United States, and second, if Kim Jong-un develops this capability, other countries in the region are going to say, hey, what about us? Japan is going to say, well, North Korea has a bomb, we need it too. Same with South Korea, same with Vietnam. Just as the case when Pakistan made that claim, and successfully, I might add, against India years ago. So the question is, what's the solution here? We have to do a couple

of things, in my judgment. One, we have to work much more closely and thoughtfully with China.

China is not going to stand idly by. I've had a lot of conversation with the Chinese ambassador to North Korea over the years and with the top government officials. They're going to be very involved in -- for whenever a solution occurs in Vietnam -- excuse me, in North Korea.

[18:40:01] Second, we have to be prepared to begin to compromise a little bit here. In return for some kind of a freeze, China is going to have to get a lot more involved to make that happen. Maybe Kim is going to be promised that he'll keep his job, that maybe he'll -- a relaxation of economic sanctions.

But number one, we got to work more closely with China. China is going to want a deal. They're going to want to get something out of this. And second, we're going to have to start thinking about some kind of compromise.

CABRERA: The word "compromise" is interesting. President Trump has said talk of appeasement will not work. Do you see that as him shooting down this idea of a compromise?

BAUCUS: I'm not talking about appeasement at all, far from it. I'm talking about a deal. I'm talking about some kind of verifiable freeze where the countries in the region, those most directly related, the U.S., China, for example, and Japan and South Korea, say, hey, here is what we can do.

Now, it might mean the U.S. military exercises might be diminished a bit over there. It could be lots of other things, so long as we reach the final goal. And what's the final goal? The goal is putting a stop to what Kim is doing. That is not appeasement. That's the solution we're looking for.

CABRERA: It's interesting the solution you just suggested is actually something that China and Russia has suggested, this idea of a freeze for freeze. Freeze the nuclear or the -- freeze the nuclear program and development, don't fire any more missiles, don't do any more nuclear tests on North Korea's side. Meantime, stop the drills, stop the show of force with South Korea and the U.S.

BAUCUS: Right.

CABRERA: It's interesting just to hear you agreeing with, what some consider, U.S. adversaries.

BAUCUS: No, I'm -- the freeze for freeze concept is stillborn. It was going nowhere. It was an automatic phrase that just rolled off people's lips, and people didn't do much about it. But a couple of things have happened since.

Number one, this is getting even more real, as Kim Jong-un has an even stronger capability. Second, I think that there's an opportunity -- there's an opening for the U.S. and China to work more closely together to find out some way, some arrangement, including some common end game.

China is going to want to know, hey, what's going to be in store for us, China, if we reach an agreement with the United States on Kim? What's going to be in store for China, two or three or four or five years? Who is going to be doing what in the Peninsula? What influences -- and in the region, what influence?

We got to start talking more. That's the main thing. U.S. and China do not talk to each other very much in a serious way. We've got to get serious if we're going to find a solution.

CABRERA: All right. Ambassador Max Baucus, I have so many more questions for you. This North Korea situation, it is complicated, but thank you for spending some time. We'll talk to you again soon, I'm sure.

CAUCUS: You bet.

CABRERA: A new twist into the investigation into Russian election meddling. Still to come, reports of a draft memo detailing why James Comey was fired. Why this version written by the President himself was apparently thrown out. You're live in the CNN newsroom.

(COMMERCIAL BREAK)

[18:47:26] CABRERA: Because of the devastation in Texas and Louisiana this week, you might have missed a few developments in the Russia investigation.

For one, Special Counsel Robert Mueller has a new piece of evidence. "The New York Times" reports Mueller has an early draft of the letter President Trump planned to send to FBI Director James Comey, listing off reasons why he was firing him. The White House Counsel saw the letter as, quote, problematic, and stopped the President from sending it.

Also new, a source tells CNN that the President's legal team has actually met with Mueller to talk about the investigation. And they have apparently prepared memos arguing why President Trump didn't really obstruct justice when he fired Comey. And on top of all that, we learned that Mueller has teamed up with New York's Attorney General to investigate President Trump's former campaign manager, Paul Manafort.

So a lot to keep up with. Let's talk it out. With me, CNN legal and national security analyst, Asha Rangappa. She is the associate dean of Yale Law School and a former FBI special agent. And also with us, CNN global affairs analyst and online news director for "The New Yorker," Dave Rohde.

So, Asha, let's start with this draft letter to Director Comey. White House Counsel apparently found it problematic because it had an angry and meandering tone but not necessarily because anything in it was illegal. That's an important distinction, right?

ASHA RANGAPPA, ASSOCIATE DEAN FOR ADMISSIONS & FINANCIAL AID, YALE LAW SCHOOL: Absolutely. So there's three things that could be important about this letter -- timing, the content, and what the White House Counsel said.

So the trickiest thing for Mueller in proving obstruction charges against the President is to prove that the President acted with corrupt intent. And we know that after firing Comey, he kind of waffled back and forth, that he mentioned that it was because of Russia, but maybe not.

This is the first piece of evidence that Mueller has before the fact, immediately before the firing of Comey, laying out his reasons in his own words. So these are -- this is going to be important.

Now, the content matters. It's possible that this letter has a meticulously planned -- you know, penned master plan for why he's firing Comey.

But as you know, President Trump is -- he's no Shakespeare, and so it may just be rambling and incoherent or possibly inappropriate. And so that's why what the White House counsel said to him about it is also important. And he can be compelled to testify about that conversation.

Now, if he --

CABRERA: So he can't claim attorney/client privilege?

[18:49:54] RANGAPPA: So he is not acting -- he was not acting as the President's private attorney. He's the White House Counsel, and he is advising the Office of the President. And there is court precedent that the White House Counsel can be compelled to testify about potential criminal conduct of government employees. So that executive privilege would be very hard to claim here.

And if McGahn told the President, look, you can't do this, this would be obstruction. That's the potential smoking gun for Mueller.

On the other hand, if he said, look, tone it down, you can't say these things because it's inappropriate. Or if he even said, look, you can say whatever you want, but it's not going to make the Russia investigation go away, that can actually be potentially exonerating for the President because he can say, look, I knew it wasn't going to make the investigations go away. I just -- I hated Comey and I just wanted him to go.

So are these things --

CABRERA: OK. So --

CABRERA: -- we need a lot more information.

CABRERA: Exactly. I was going to say there's so much to wonder about because we don't know the contents of the letter and really the contents matter here.

But, David, the fact that he did not send this letter and apparently it was drafted before the letter from Deputy A.G. Rod Rosenstein that was eventually submitted as part of the reason for his firing, what does that tell you?

DAVID ROHDE, CNN GLOBAL AFFAIRS ANALYST: Well, I think there was a problem with the letter. Whether it was a legal problem or a tonal problem, you know, we won't find out.

But it was Stephen Miller, the domestic adviser, who is sort of a real firebrand, that helped Trump draft the letter. And just the fact that it went from four pages to four paragraphs -- that was the statement Trump released explaining -- that shows that there was clearly problems with it.

But it -- and the fact that this got to Mueller shows that the process is working. This was released by the Department of Justice straight to Mueller without the White House's permission and that shows that Muller is getting the documents he needs.

CABRERA: And you say that what we've also witnessed this week shows that Mueller is being fair.

ROHDE: Yes, he's being -- I mean, he is being very thorough. This partnership with the New York Attorney General shows that he's looking into a variety of crimes.

There's a lot of attention, it seems, with Paul Manafort. There was -- you know, they searched his house in late July. His spokesman was subpoenaed. There's been various efforts to look at Manafort closely.

So another dig for the White House, and they'll politically push against this, is that Mueller can look into any other matter, any other potential criminal matter. That could get into sort of financial crimes that has nothing to do with obstruction of justice.

But you know, the one thing I can say, as someone who is very close to Mueller and worked with him for many, many years said he will be aggressive, but he will do this quickly and fairly. So I think this fall is going to be a critical time in this investigation.

CABRERA: It does seem like there are new developments now coming out pretty fast and furious, and he's reaching out to all these different experts in different fields but all connected to the legal realm, obviously.

David Rohde and Asha Rangappa, thank you both. And we'll continue to talk about the Russia investigation as we get those new developments. But right now, I want to give you this week's "Before the Bell." Here's CNN's Maggie Lake. Maggie?

MAGGIE LAKE, CNN CORRESPONDENT: Hi, Ana. Hurricane Harvey will be one of the most expensive natural disasters in U.S. history. Property damage and economic losses will be in the tens of billions of dollars, if not hundreds of billions. And gas prices are on the rise as refineries in the area struggle to get back online.

On Wall Street, Harvey's impact on the overall market will likely remain limited, but individual sectors like energy and insurers could be volatile.

The major indices managed to finish the turbulent month of August in positive territory, with the S&P 500 barely eking out a gain. Tomorrow, the stock market is closed for Labor Day.

This week, investors may take some cues from Washington as Congress reconvenes. Wall Street is looking for signs of progress on tax cuts. It's also looking for any movement on a deal to raise the debt ceiling.

At the New York Stock Exchange, I'm Maggie Lake.

(COMMERCIAL BREAK)

[18:58:15] CABRERA: Developing right now in Texas, we are monitoring a controlled burn at the Arkema chemical plant that's outside Houston. The fire marshal's office set fire to six remaining containers of chemicals at this plant this afternoon.

Fire officials say the burn poses no additional risk to the community. However, the "Houston Chronicle" says residents nearby were not told ahead of time that these chemicals were about to be ignited. There is still that one and a half mile evacuation zone in effect for now.

California's Governor has declared a state of emergency in Los Angeles County as crews are trying to get a handle on a massive wildfire there. The La Tuna fire has destroyed three homes and burned 5,800 acres. That makes it the largest fire in Los Angeles city history.

More than 1,000 firefighters from around the state are now battling this blaze. Crews are also tackling it by air using those planes to drop some flame retardant on some of the hot spots.

Right now, it's about 10 percent contained. That's not much, but the Fire Chief says he is optimistic they'll be able to make some good progress today since the weather conditions have improved.

You are live in the CNN NEWSROOM. I'm Ana Cabrera in New York. Great to have you with us.

Tonight, an ominous message from President Trump after North Korea carries out its most powerful nuclear test to date.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Mr. President, will you attack North Korea?

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: We'll see.

(END VIDEO CLIP)

CABRERA: Those two word, "we'll see," come on a day that saw the President huddling with his national security team. The Secretary of Defense making clear the U.S. has many military options to handle this threat.

(BEGIN VIDEO CLIP)

[18:59:58] GEN. JAMES MATTIS (RET.), UNITED STATES SECRETARY OF DEFENSE: Any threat to the United States or its territories including Guam or our allies will be met with a massive military response, a response both effective and overwhelming.