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Details of Senate Tax Plan; Trump Praises China; Flynn Worried About Son's Legal Fate. Aired 2-2:30p ET

Aired November 09, 2017 - 14:00   ET

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

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[14:00:09] ANNOUNCER: This is CNN breaking news.

BROOKE BALDWIN, CNN ANCHOR: Here we go, breaking news at the top of the hour on CNN. I'm Brooke Baldwin. Thank you for being with me.

Any moment now senate Republicans are expected to unveil their plan for overhauling the nation's tax system. And we are just now getting some of the details coming out of what could be in that bill. We'll get you to Capitol Hill and get into those details in just a moment.

But all of this is happening while pressure on the Republican Party could not be higher. Republicans see their majority rule at stake after seeing major election losses in state and local races this week. Exit polls indicate not passing a health care bill had an impact.

So now Republicans are putting all their effort into passing major tax legislation before the midterms just to prove that the party controls both the White House and Congress can make good on major campaign promises here.

This as the Senate Republicans are preparing to debut details of their tax plan, House Republicans, they're finalizing theirs. Here was House Speaker Paul Ryan.

(BEGIN VIDEO CLIP)

REP. PAUL RYAN (R), HOUSE SPEAKER: We're doing this the right way. We're doing this regular order way. It takes time, but, trust me, we're going to get this over the finish line. We're going to get this over the finish line because we need to get this done for American families. We need to get this done for people who will be helped by simpler, fairer taxes. And today we're taking one big step closer to fulfilling that goal.

(END VIDEO CLIP)

BALDWIN: Let's go straight to Capitol Hill, to CNN national politics reporter MJ Lee.

We now have some of the details coming out of the Senate side. Talk to me through some of these -- some of these details, including the fact that they are still discussing repealing the individual mandate. MJ LEE, CNN NATIONAL POLITICS REPORTER: Yes, that's right. You know,

Brooke, there is a lot of agreement among Republicans on Capitol Hill that they need to do something on tax reform. They are desperate to get some bill passed, hopefully before the end of the year.

But the big challenge is going to be, how do lawmakers actually reconcile the different proposals that have emerged from the House versus in the Senate. Now, as you know, Senate Republicans have been huddling earlier today and they're now just coming out of this closed door meeting where they had a discussion about how they want to proceed here in the Senate on tax reform.

Now, a couple of details that we want to highlight and the differences that we have seen so far between the House version and the Senate version. For example, in the House version, there are four tax brackets. In the Senate version there are five to seven. The repealing of the estate tax over time, that was proposed in the House bill, that's a little different in the Senate version in that they are proposing a partial repeal of the estate tax.

And then the big contentious point over what's to be done about salt. The state and local deductions. Over on the House, there is a partial repeal that is being proposed. On the Senate side, it is a full repeal that is being talked about.

But as you said, Brooke, a lot of things are still up in the air. None of these details that we're seeing are finalized, of course, because these discussions are still taking place.

One big point that you noted, the question of whether to include the individual mandate repeal in Obamacare, whether that's growing to be included. We have spoken to senators coming out of this meeting and they say that that is not for certain.

Now, of course, that is so important because that will give lawmakers the additional revenue that they are looking for as they try to bring down the cost of whatever tax bill that they propose and eventually hopefully want to vote on.

Now, two big political considerations that are weighing heavily on Republican lawmakers right now. The first is simply that they want to get something done. And you can't stress this enough. They are feeling the pressure from President Trump. He wants to end his first year in the administration, in the White House, with a big win. They are hearing from that -- hearing from him on that constantly.

And the second, of course, is what we saw earlier this week in the election. Republicans were not happy that they saw such losses in states like Virginia, New Jersey, and Democrats are making it clear that if they, Republicans, continue to pursue this kind of a tax proposal, that they are going to see more losses in 2018.

BALDWIN: Just quickly on the individual mandate note, because we all read these Phil Mattingly emails each and every morning on what's going on, on Capitol Hill. On that point, yes, they have revenue that. We saw the CBO score. This is one quote from a senior aide. Yes, health care has worked out so well for us this year. Let's just go ahead and add it to our already extremely complicated lone must pass legislative item, sarcasm.

MJ Lee.

LEE: Well --

BALDWIN: Yes, sarcasm. Go ahead.

LEE: A little bit of sarcasm there. Yes.

BALDWIN: Yes. Yes, totally.

LEE: Well, you remember -- you remember how this issue actually came up a little white ago when President Trump brought this issue up, even though lawmakers, his colleagues on Capitol Hill, were not necessarily discussing this issue as a serious idea, as a serious proposal to be included in the tax discussion.

[14:05:04] Now, when the word comes from the president, Republican lawmakers feel like they have to take him seriously. But I can guarantee you there has been a lot of grumbling, a lot of complaining among Republicans on Capitol Hill that this is too last minute. That this complicates what has already been a very, very complicated and complex process. And that the idea of including this just might make things too difficult for lawmakers to come to a consensus on a totally unrelated topic. They want to focus on tax reform. They are not so eager to bring in the issue of health care, which frankly has not worked out so well for them so far this year.

BALDWIN: Yes. To the point of this aide, they want this all done. Remember, self-imposed deadline, Christmas.

MJ Lee, thank you very much.

Again, we should be getting more detail from the Senate side in the next hour or so. So we'll bring that to you.

But let's take a deeper look into these two tax plans, the House and the Senate. I have with me CNN senior political analyst Mark Preston and also with us actor, comedian, economist Ben Stein. He is also the author of "The Capitalist Code: It Can Save Your Life."

So, gentleman, welcome. Here we go.

Mark Preston, just first to you on some of the top lines coming out of the Senate tax reform proposal. How do you see it?

MARK PRESTON, CNN SENIOR POLITICAL ANALYST: Well, there's a couple of things that we've seen so far. And as MJ said, a couple things. One, it's very complicated. What we're talking about now could very well change by 6:00 this evening.

But a couple of things that we're seeing that is coming out of the Senate tax bill is, one, that it would keep deductions for the adoption and medical expenses. It would allow for seven income brackets. We saw MJ talk about that. And it would repeal all of the state and local taxes, including property taxes. That is a big issue for folks who live in states such as New York, New Jersey, California.

And when you look at the politics of it all, you're talking about Republican House members who are endangered in 2018 that will feel an incredible amount of pressure from their constituents now to allow these salt taxes to be wiped away because their constituents in these states in particular really, really rely on them.

BALDWIN: Ben Stein, to you, sir. We've heard from the White House budget director, Mick Mulvaney, who has said the president would reject a tax proposal that raises taxes for the middle class. Can Republicans sell this as a solid plan for the middle class in this country?

BEN STEIN, ECONOMIST: I don't think they can sell it as a solid plan for anything. I mean the whole premise of this is faulty. I want to emphasize, I am Republican. I voted for Trump. But I want to emphasize also that the premise is that if you cut taxes, you will bring in more revenue. You'll bring in so much more revenue that you will offset and overwhelm the tax laws from the cut in tax rates. That obviously is not going to happen. If that were going to happen, they wouldn't need to cut out these state and local tax deductions. They wouldn't need to have a slow repeal of the -- instead of a rapid repeal of the estate tax.

The whole premise of this is that if you cut taxes, everything's just going to grow like a giant mushroom after a rain storm. That's just not going to happen. It's never happened in the past. It's not going to happen now. I think the idea of cutting the corporate tax rate was always a good idea because that is income that's going to the stockholders. And that's income should be taxed directly to stockholders. Otherwise it's an incredibly complicated mishmash, which is internally inconsistent.

And I don't understand why they need to cut the individual mandate. I've never understood why that was such a terrible problem. And I still don't understand it.

BALDWIN: Mish-mash. Is that a technical tax term, Ben Stein?

STEIN: Yes. Yes, a technical tax term for a tax -- for a tax plan that is internally inconsistent, as internally inconsistent with the Republicans basic premise.

Look, the Republicans are supposed to be the party of responsible budget policy. They're supposed to be the party of rebalancing the budget. We have gone so far away from that, it's insane. And I hope and pray that we can some day work our way back to it.

BALDWIN: OK. You mention the corporate tax cut. And so Gary Cohn, the white House national economic council, you know, director was on CNBC this morning with this message to big business and corporations. Here he was.

(BEGIN VIDEO CLIP) GARY COHN, CHIEF ECONOMIC ADVISER TO PRESIDENT TRUMP: We create wage inflation which means the workers get paid more, the workers have more disposable income, the workers spend more. And we see the whole trickle down through the economy. And that's good for the economy.

(END VIDEO CLIP)

BALDWIN: He says good for the economy, Mark Preston, but, you know, when you look at this CNN poll where you have the majority of this country not in favor of the plan as it stands right now, and you've just heard Ben Stein opine on how he feels about it, how do they sell this?

PRESTON: That's a very good point. You know, and I think what Ben was saying right there is very, very important.

Let's look at a couple things. The politics of how they're going to sell this. They are trying to push this through right now and it is November. Now it looks like they have two months left before the end of the year to try to get this through. The fact of the matter is, Congress doesn't work every single day of the year, so you're looking at a very truncated calendar.

[14:10:11] You're also looking at a Republican Party right now that is very much divided. It's a party that has centrist members, has very conservative members. People who represent states that are very conservative, such as Mississippi, or states where Ben is right now, in California which tend to be a little bit more centrist or moderate. Selling this plan as an overall tax cut for the middle class is going to be very, very difficult.

And Howard Shultz today, admittedly a very big Democrat, somebody who may run for president --

BALDWIN: Yes.

PRESTON: Himself said today that they talk about tax reform. That this isn't tax reform. This is a tax cut for the wealthy. And we already know from Democrats right now that they will cease upon that and turn it into ads. And this -- if we saw -- if you think out there in TV land that the ads that you saw during the health care were overwhelming, wait until you see these ads over the tax cut bill because everybody has an interest in it.

BALDWIN: Ben Stein, just last word from you, as a proud Republican, obviously, you know, you want to see this be accomplished. When you look at, you know, what's in the win column for this administration so far in the first year versus not, they need this.

STEIN: I think we need a very straightforward plan. We have a tremendously large (INAUDIBLE) tremendously rich people in this country. They have to have their taxed raised, not lowered, raised. And we have to have a tax cut for the middle class. It's really, really simple. The rich should pay more tax in this country. That's -- they're called rich for a reason. BALDWIN: Ben Stein, Mark Preston, thank you both so very much. We're

going to get more details from the Senate side of their version of the tax plan and hear from them in a little while.

Coming up here on CNN, President Trump, who once truly trashed China on the campaign trail over its trade practices, now says, quoting him, he doesn't blame China for taking advantage of the U.S. Is this the art of the deal playing out in action in this part of the country? And will it make any difference on issues of trade and pressuring China with regard to North Korea? We'll take you live there next.

Also, troubling details about the Texas church massacre. The gunman telling a former colleague why he used to buy animals off Craigslist.

And moments from now the Air Force is expected to hold a news conference. We will learn more perhaps on the breakdown in his background.

What should be done now with the church? Will it, should it be torn down? I'm Brooke Baldwin and you're watching CNN.

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[14:17:01] BALDWIN: President Trump in China with a radical about face on his opinion of the country's trade practices. Standing there next to Chinese President Xi, President Trump even praised him for taking advantage of the United States.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I don't blame China. After all, who can blame a country for being able to take advantage of another country for the benefit of its citizens? I give China great credit.

(END VIDEO CLIP)

BALDWIN: China great credit. Certainly a far cry from the language and tone we heard from candidate Trump, who accused China of being an enemy responsible for, quote, killing and raping the U.S.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: We can't continue to allow China to rape our country. And that's what they're doing. It's the greatest theft in the history of the world.

(END VIDEO CLIP)

BALDWIN: With me now, White House reporter Kaitlan Collins, who's in Beijing following the president.

And so, Kaitlan, just as we saw from the speech in Seoul, again there in China a much softer tone from President Trump. What else was in his message? KAITLAN COLLINS, CNN WHITE HOUSE REPORTER: Yes, Brooke, we're starting

to see this overall pattern from the president where he's using very different language now that he's over here in Asia during this 12, 13 day trip, excuse me. First we saw that with that speech in Seoul. Much different language about North Korea. And then again here in Beijing, where he did not stick with that constant criticism that he had during the campaign where he said that China was, quote, raping the United States, and promising to label them a currency manipulator once he became president. Instead, today he lavished a lot of praise on the Chinese, and specifically on President Xi Jinping, saying that he gave him credit for what they did and for this trade imbalance, saying that they were simply -- sorry, it's really windy here in Beijing -- that they were just doing what the --

BALDWIN: It's OK. Welcome to live television. You're fine, Kaitlan.

COLLINS: Right.

Saying they were simply just doing what's in the best interests for China at that time.

But what we're seeing here is a very startling change in rhetoric from the president. We didn't quite see that from President Xi. Instead, he spoke in very measured and scripted tones when speaking about the president and this trade imbalance, saying that he's only hopeful that this is a new starting point for the United States and for China here, Brooke.

BALDWIN: OK. Kaitlan Collins, total pro through the windstorm in Beijing. Thank you so much.

We're going to stay on this. David Andelman is with me now, contributor for cnn.com and editor emeritus for "The World Policy Journal."

Good to see you again.

DAVID ANDELMAN, CONTRIBUTOR, CNN.COM OPINION: Nice to see you, Brooke.

BALDWIN: So, OK, when you look at everything that China did over this special visit, the fact that they allowed him within the Forbidden City for the dinner. We've seen the, you know, the marching on his behalf. The eight cannon salute.

Max Baucus, let me quote him. This is classic Chinese. It's their technique to try to suck you in. The more there is pomp and circumstance, the less there is time to talk.

[14:20:03] Is there truth to that?

ANDELMAN: Well, there's some truth to that. But I mean there are a lot of things for them to talk about. There's no doubt about that. And not only just China, but also -- and I think we're going to get to that in a moment -- Russia as well. And China and Russia have a very close condominium. They are very tight with each other. It's good that actually they're all talking nicely. They're making nice to everybody. I don't think we ever really expected much to come from this China

trip except atmospheric. But the atmospherics can really be important in a case like this. And these are good atmospheric, I have to say.

BALDWIN: Well, it's atmospheric on the Chinese side, but perhaps also on the side of the U.S. The fact, you know, that the president is showing President Xi, you know, video of his granddaughter speaking in mandarin. I mean it -- on one level it's just cute, right? But on another, might it be President Trump with a play.

ANDELMAN: Oh, sure, it is. And, you know, they've signed 19 agreements while they're there. You know, billions of dollars' worth --

BALDWIN: $250 billion in agreements.

ANDELMAN: $250 billion worth of -- some of which, you know --

BALDWIN: Don't totally have teeth?

ANDELMAN: Well, they don't -- nor do they not have teeth.

First of all, they're not hard contracts. They're agreements. So they (INAUDIBLE) might not necessarily hold up in a court of law. Also, a lot of these are things that were in the works for a while and they just decided to bring them out and, you know, parade them in this. So you have 19 different agreements. But perhaps not quite that much will translate into hard business and real employment back home in the United States.

BALDWIN: Do we know how much hard business, how much tough talk perhaps on North Korea that they engaged in?

ANDELMAN: They've gone, I think, the Chinese, as far as they are prepared to go right now. And, you know, there is some indication, and then people I've talked with who have been traveling through North Korea have been telling me, it is beginning to bite, some of these sanctions. You're beginning to see that it is beginning to bite. So it may take a while.

I've often said that sanctions are not an immediate, you know, switch that you can throw. It can take a while for sanctions to bite. Certainly when we were dealing with South Africa back in '70s and '80s, I mean these sanctions took years to bite, but they finally did and there were results.

So we could see some real change at some point. The Chinese do not want to turn that ultimate switch of oil and so on that would conceivably bring down the whole regime.

BALDWIN: OK. I've got to go because we've got some breaking news on the other end of this but we'll come back because we do need to talk Russia and potentially this Putin meeting tomorrow with President Trump.

David Andelman, thank you so much for swinging by. It's good to see you. We do have that news coming up.

Also ahead, still to come, Michael Flynn Senior and Michael Flynn Junior both under scrutiny by the Special Counsel Robert Mueller. Now we're learning why the father is concerned about his son's legal fate. That is next.

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[14:27:08] BALDWIN: After the recent indictments of two former Trump campaign officials, a lot of people have been asking, where in the world is former national security adviser Michael Flynn? Well, today, an indication he may be talking. Sources tell CNN that Flynn is expressing concern about the potential legal exposure of his son, Michael Flynn Junior. Flynn Senior has been under federal investigation even before Robert Mueller became special council. And Flynn Junior has played a key role in the family's consulting firm.

And while the father here, Flynn Senior, has been largely absent from public view and from social media, his son frequently weighs in on this Russia investigation. Just four days ago, this is a tweet from Mike Flynn Junior. Quote, the disappointment on your faces when I don't go to jail will be worth all your harassment.

Let's go to Shimon Prokupecz, our CNN crime and justice reporter, on this.

Do we know what legal questions Bob Mueller is focusing on regarding Flynn Senior and where the son may fit in here?

SHIMON PROKUPECZ, CNN CRIME AND JUSTICE REPORTER: Yes, Brooke, so we have some insight into it based on witnesses who we've talked to who have been interviewed by the special counsel investigators and they say to us that the investigators are asking questions about the former -- about Mike Flynn, the former national security adviser's business dealing. His son was his top aid, was his chief of staff at the time. So they're asking questions about the son's role in the businesses and some of the work that they were doing overseas and making money off of that. Income that they were getting from their work overseas. As well as some interest in Flynn, Mike Flynn's efforts, lobbying efforts, on behalf of Turkey. Those are just some of the things that we have been told the special counsel has been asking questions about.

BALDWIN: OK. Shimon, thank you. Shimon Prokupecz for us in Washington on just this piece of the investigation regarding the Flynn family. We're going to continue on. And we'll be right back.

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