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Senate GOP Revising Tax Bill to Get 50 Votes; Michael Flynn Charged With Lying To FBI. Aired 9-9:30a ET

Aired December 1, 2017 - 09:00   ET

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


[09:00:24] JOHN BERMAN, CNN ANCHOR: Happening now, two hours to find a trillion dollars. What could possibly go wrong? Good morning, everyone. John Berman here. So who has a trillion dollars when you really need it? Not the current Republican tax plan. It's a trillion dollars short, that is trillion with a T and then an R and then all the other letters.

High drama in the Senate overnight as the tax plan that once seemed to be headed for uncertain passage get a trillion-dollar snag. Again that is trillion with a T. The Congressional Joint Committee on Taxation said the plan would not pay for itself and end up adding $1 trillion in deficits, with a T.

This morning, Republicans are scrambling to figure out a way to fill that gap or lose key Republican votes. Incidentally that's Republicans with an R even though the president said moments ago, "Obstructionist Dems trying to block because they think it is too good, it will not be given the credit."

We are watching Capitol Hill to see how Republicans work out the map and the politics this morning. We're also watching the White House where the president will have lunch with Rex Tillerson, the secretary of State. The question is, will he still have that job by dinner? This after the White House leaked a plan to replace Tillerson as soon as, like, this month.

Also breaking overnight, reports that the president himself has been pressuring key senators to back off their Russia investigations, raising questions again about obstruction with an O, as in, oh, did you hear that, Robert Mueller?

Let's begin, though, on Capitol Hill. CNN's Suzanne Malveaux is there. And Suzanne, I understand you have breaking news about two important yes votes on the tax plan.

SUZANNE MALVEAUX, CNN NATIONAL CORRESPONDENT: John, things are moving fast and furious this morning because you have, just within an hour the Senate will convene. Within two hours of that they'll start voting again.

Senator Ron Johnson, long-time no is now a yes. I was just confirming that moments ago and essentially he was the person who looked at those business entities, those partnerships and said, hey, I want a better deal for them. Well, it looks like he got that better deal. These are the pass-throughs that he has been arguing for.

And you have Senator Daines of Montana earlier saying that he was a no, well, now he is also a yes. He was looking at a better tax breaks, if you will, for the small businesses, looking out for the little guy. Those are two no's that are now yeses.

So what are we looking at here? Senate Majority Mitch McConnell, he can only afford to lose two Republicans. We're looking at three Republicans potentially that could be a problem for him. Late night on the Senate floor the drama with Senator Bob Corker of Tennessee essentially finding out that this is not a revenue -- a federal deficit budget neutral kind of bill here that they have got, that this is going to cost a trillion dollars.

He had a plan in place, a potential trigger that would stop those tax cuts from happening to help pay for this if the economic growth didn't. That was rejected by the parliamentarian. There was a lot of emotion around that. People are very angry that he made this public. He threatened to withhold his vote.

Senator Jeff Flake is on his side, with Bob Corker. They are basically a team here. So look out for those two votes. Also look out for Susan Collins. She is looking for some subsidies and as well as ways of shoring up the Obamacare -- that the markets, if you will, because of the repeal of the Obamacare individual mandate.

Those are the three ones to look out for. Clearly there's going to be more high drama, but, John, things are moving very quickly right now in the direction of this thing passing.

BERMAN: All right. Suzanne Malveaux, on Capitol Hill, stand by, bring us developments as they come in.

In the meantime, I'm joined now by CNN's chief business correspondent, start of "EARLY START," Christine Romans.

Romans, we were told this plan would pay for itself. We were told the business tax cuts would help the little guy,. That's what we were told but what does the math now say?

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: The math is morphing and moving and this is now a big corporate tax bill that will add to the deficit and there is no guarantee it will add jobs or raise wages. A lot will change but here's what we know. Despite promises the tax plan will not pay for itself. By the numbers.

The Senate plan cost $1.4 trillion over the next decade. Republicans say economic growth will cover that cost, but the Joint Committee on Taxation estimates it will only create $408 billion in growth, that still leaves that $1 trillion, with a T, John Berman, in deficits. Why? Because the bill will adds jobs and increase corporate investment only in the beginning. Those effects stayed along with certain provisions by the year 2025.

GOP leaders are confident they'll make up the difference of new streams if revenue, like eventual tax hikes maybe, raising the corporate rate each year or restoring the alternative minimum tax, not popular. But even though don't complete make up the total cost. So what is that $1 trillion paying for? Mainly corporate tax cuts.

[09:05:04] Now the GOP argues corporate tax savings mean higher wages for you. There is no guarantee. In fact the current tax plan will likely raise taxes for some. Right away for those earning less than 30 grand. But by 2027 all low-income and most middle class Americans will pay more. The wealthy receive and keep the biggest tax cuts. That's what the math says -- John.

BERMAN: And just a reminder here. The dynamic scoring which is this new report overnight that it will still cost $1 trillion, this is the message by which Republicans have been calling for years to judge these things and they still don't like what it says.

ROMANS: By the most optimistic standards, it still doesn't make it.

BERMAN: All right. Romans, go nowhere. We have much more to talk about.

Joining us also now CNN political commentators Errol Louis and Lynn Sweet, Washington bureau chief for the "Chicago Sun-Times."

And Lynn, I want to start with the politics here because whatever the drama overnight and how ever difficult it has been to get to this point, it really sure seems like this is headed for certain passage and frankly soon.

LYNN SWEET, WASHINGTON BUREAU CHIEF, CHICAGO SUN-TIMES: Well, it does but the number we have another obstacle on the road and that is that the House and Senate versions of this bill still have to be melted into one, which means that there'll be a second round possibly of negotiations, votes, and we may be there talking about, are we on the brink or not very soon.

But yes, it does look like there's a Senate passage and the point is this is a Republican bill. When the president blamed the Democrats for obstructing, you know, I just tell people, when Christine was talking about look at the math, look at who is going to vote on this. If indeed we get the conclusive vote today it will be a party line vote. I am predicting -- and this is an easy one -- no Democrats will be on this Senate bill, just as no Democrats were on the House bill.

BERMAN: Way out on a limb, Lynn Sweet, with that, in there are Democrats will be on this. But I want to do a dramatic reading, Errol Louis, from two noted Republicans. Paul Ryan, "The debt will weigh down our country like an anchor." Mitch McConnell, "Only one thing can save this country and that's to get a handle on this deficit and debt issue."

Now notably, that was in 2013 for both those men when Barack Obama was president. Now that Donald Trump is president, they say debt, nah, a trillion dollars.

ERROL LOUIS, CNN POLITICAL COMMENTATOR: Really the only difference between now and then is that the debt is actually a lot larger, right? So the political math might work out for them. The fiscal math doesn't work out, as Christine just pointed out. So you've got people who are going to have to do some kind of a flip-flop. They want to get these votes. They want to get this on the books one way or another. They're clearly not concerned about the long-term effects on the economy, the long-term effects on the federal debt.

There's a sneaking suspicion I think among some progressives on the Democratic side that what they really want to do is put the nation in a position where there'll have to be massive cuts to big programs including Medicare and Medicaid. And that that's what the end goal is. I don't know if it's all that complicated. I think it's more like they're thinking about 2018. They're thinking about getting something done after spending almost a decade calling for corporate tax cuts.

BERMAN: So all along, the numbers have been a question here. And all along Steve Mnuchin in the Treasury Department said he was going to do a Treasury Department analysis to look at these numbers and they would release these numbers. The thing is, though, they haven't. They haven't come up with these numbers.

And now there's an inspector general inside the Treasury Department. Elizabeth Warren says even the Treasury Department has used expensive taxpayer fund to conduct economic analyses that it refuses to release because those analyses would contradict the Treasury secretary's claims or Secretary Mnuchin has grossly misled the public about the extent of the Treasury Department's analysis.

ROMANS: And I doubt this is resolved by the time there's an actual vote, there's an actual final bill here, to be quite honest. I mean, this is something that is moving very rapidly here and what you're hearing from the Treasury Department, what you're hearing from supporters of this bill. And this is like rocket fuel on a strengthening economy, the economy is already strengthening, as you can see.

Do we need tax cuts for business? It will be rocket fuel on the economy and will cause all of these companies to bring money home, spend more money, something the CEOs are now saying they're going to do.

BERMAN: You know, Web only economics talk about this tax plan. And Christine Romans, we have talked about whether the economy needs rocket fuel now. It may be the last thing the economy needs right now. But that's a discussion for another time.

Lynn, the politics of this fascinate me. The politics of the Republican caucus in the Senate fascinate me. These Republicans who are now, many of whom, you know, tripping over themselves to work with the president who a year ago or months ago had a lot of issues with the president. One of these people is Senator Lindsey Graham of South Carolina who has been critical the last few days because of the various issues that have come up over of the president saying things that aren't true about the "Access Hollywood" tapes and where President Obama was born, and releasing those anti-Muslim videos. They're questioning his mental state. Lindsey Graham has a problem with that now but didn't seem to before.

Watch this.

(BEGIN VIDEO CLIP)

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: I'm not going to try to get into the mind of Donald Trump because I don't think there's a whole lot of space there. I think he's a kook. I think he's crazy. I think he's unfit for office.

[09:10:05] You know what concerns me about the American press is this endless, endless attempt to label the guy as some kind of kook, not fit to be president. He did win, by the way.

(END VIDEO CLIP)

BERMAN: So that was then. And now a change there. But Republican senators as they work to get this tax cut through really seem to be willing to put everything else aside, Lynn.

SWEET: Well, because you have to keep government going. You know, this has been a year of this don't look for consistency in between what people say and what they do when they govern. Because, you know, Lindsey Graham, that one was a 180 for him, his psychological assessment of the president. But it does make sense, if you are elected to govern, you have to go to the Capitol and figure out a tax bill if that's what you want.

And there's a sense it's almost on the side that Trump is at play here because this is being driven, this is a point where there is commonality and purpose to get a tax bill done, and the Republicans in the broad strokes have a lot of agreements. Not obviously on driving up the deficit which is what is driving a wedge within their own ranks.

So after -- we'll soon be having a year in office for President Trump and the consistency rule has been put on the side for a while when you're looking at people who know that the -- who on one hand want to question the mental state but on one hand want to work with the White House to get some policy done. I think it shows that these things can run on two, three, four tracks at the same time.

BERMAN: Errol Louis, you know, Democrats have been highly critical of the president over this last year and up until this week, but if this tax plan gets through the Senate today and then through the conference and ultimately he signs it in the coming weeks, if he has that by, you know, Christmastime, and we are all allowed to say Merry Christmas now.

(LAUGHTER)

BERMAN: If he gets that by Christmastime, he gets all these federal judges he has been appointing , he can just -- can he just say scoreboard? Say what you want about my mental state, say what you want about my Twitter account, but look at the scoreboard, Errol. LOUIS: Well, your point is well taken. The administration has

accomplished many of its calls. We pay a lot attention on the news on hype, sort of profile attempts on things like the Muslim ban and some of the other things that he ran on, but the reality is, he's been filling judgeships. They've been deregulating the government as fast as they possibly can. Clearly we have a foreign policy that's unlike anything we've seen in the last generation.

It has brought us to the brink of war with North Korea, which is not great. But in other respects they've hollowed out the State Department. I don't know if people expected the extent to which they would move quite so quickly on that particular front, but the government is more than just one man. The government is hundreds of people, thousands really, who are directing a very important agenda that Democrats, I think, are getting very frustrated about.

And so it's easy to focus on some of the crazy tweets from the president. Undoing a lot of the rest of this stuff is going to take a lot more work.

BERMAN: You know, Christine Romans, in other development overnight, the "Washington Post" is reporting that the president says a government shutdown might be good for him. While we're talking about taxes right now --

ROMANS: Oh, my.

BERMAN: I know. Fiscal cliff, shutdowns, these are things we have done before. I'm not sure that the American voters want to do it again, and the president suggesting that somehow it would be good politics for him.

ROMANS: I think that's a negotiating trick for him. I think he's putting that out there saying, hey, I'm willing to go that far as his opening gambit in this.

Look, the stock market is at record highs. It's up 6,000 points since he became president and he takes credit for it. And his supporters give him credit for it. No, question. When you look at the wins like that, I don't think he wants to jeopardize that stock market victory or the success that the economy is having right now with a government shutdown.

BERMAN: All right. Christine Romans, Errol Louis, thank you all for being with us. This is a very busy morning with all kinds of breaking developments.

Reports overnight that the president is pressuring key Republicans to drop the Russia investigation, an investigation, frankly, that might be heating up as we speak.

And a day after the White House publicly shames Secretary of State Rex Tillerson, they're having him for lunch. The question is, will he make it to dinner?

And the president says he will not be campaigning for embattled Alabama Senate candidate Roy Moore, but he kind of is, he kind of will be just days before the election. Another question, what does Jimmy Kimmel think about that?

(COMMERCIAL BREAK)

[09:15:11]

BERMAN: All right, we have breaking news and it's major breaking news in the Russia investigation. CNN has just learned that Robert Mueller has charged former national security adviser, Michael Flynn, with willfully and knowingly making false, fictitious and fraudulent statements to the FBI.

This has to do with his meetings that he held with the former Russian ambassador. Again, Michael Flynn charged with making false statements to the FBI.

Let's go right away to Shimon Prokupecz for the details on this -- Shimon.

SHIMON PROKUPECZ, CNN CRIME AND JUSTICE PRODUCER: That's right, John. So, we believe he was taken into custody and charged this morning, and the special counsel filing this one charge in an information with the U.S. District Court here in Washington, and it relates to his conversation with the former Russian ambassador, Sergey Kislyak.

Remember there was a lot of scrutiny concerning that conversation. The FBI subsequently interviewed him following that conversation. They interviewed him in January, and it is the statements he made to them during that interview in January that they are now saying he lied to FBI agents about the nature of that conversation.

Also, you will recall it was the former attorney general, Sally Yates, who raised issues about this conversation. She went to the White House and raised issues with the chief counsel there, Don McGahn, saying that she had some concerns about the nature of those conversations.

Well, we now learn that the FBI has charged him, believed that he lied to them, and the special counsel has charged him with lying to the FBI about that conversation. The information goes into some detail about those conversations, and we are reading through that right now.

Basically, it says that -- let me just read some of this to you, John, it's the best way to do this. On December 29th, in one of the conversations in 2016, Flynn -- it says, he did not ask the government of Russia's ambassador to the United States to refrain from escalating the situation in response to sanctions that the United States had imposed against Russia.

Again, when the FBI confronted him about these conversations, he lied about the nature, allegedly, according to these documents, about the nature of the conversation. Again, also, remember, he told the vice president that he did not have those conversations, and did not talk about sanctions. Ultimately lying to the vice president got him fired and now more serious charges here against the former national security adviser, Michael Flynn, he's now charged with at least one count of lying to the FBI.

BERMAN: All right. Shimon Prokupecz, stand by -- actually, Shimon, I have one more important question here. Charged, do we know if he is pleading guilty to this yet?

PROKUPECZ: Right. So, there's been a lot of talk that he's been negotiating a plea deal. We have not been told this. Usually by filing an information like this, this usually follows the standard of what we see in where a person pleads guilty.

So, the prosecutors will file an information, following that, perhaps, maybe this afternoon, we may see a plea from Michael Flynn. You know, we have been told that there have been conversations, ongoing conversations, for a possible deal.

We have also been told there has been a grand jury action, activity, a grand jury testimony that has been ongoing here in D.C. regarding the investigation. So this is not as severe perhaps as a grand jury indictment, and usually we do see an information is filed when someone plans to plead guilty, so that could happen here today.

BERMAN: All right, Shimon, standby. We'll let you get back to reporting for a second. Joining me now on the phone is CNN chief legal analyst, Jeffrey Toobin. Jeffrey, thanks so much for being with us. I have a few questions for you. Let's walk through these one at a time.

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST (via telephone): John, can I just interrupt?

BERMAN: Please.

TOOBIN: Because I just received notice from the special counsel's office that Flynn will be appearing at 10:30 this morning to plead. It doesn't say specifically that he is going to plead guilty, but it's an information and not an indictment, which almost certainly means a guilty plea.

Because information means the defendant has waived the possibility of an indictment, so this appears to be almost certainly a guilty plea by Michael Flynn for lying to the FBI at 10:30 this morning at the federal court in Washington, D.C.

BERMAN: OK.

TOOBIN: That the headline is that he will appear in court at 10:30, and it appears, virtually certain that it will be a guilty plea.

BERMAN: That's why I was asking Shimon. We have every reason to believe he will plead guilty to this at 10:30. So, Jeffrey, the significance of that? [09:20:05] TOOBIN: Well, it's of immense significance because Michael Flynn was an extremely high-ranking member of the Trump administration. He was national security adviser, albeit less than a month. He was also somebody who was intimately involved in the Trump campaign and had many connections with Russians, including meeting with Vladimir Putin in December of 2015.

So, a guilty plea by Michael Flynn with the agreement to cooperate and testify is certainly the biggest development of the Mueller investigation since he was appointed in May.

BERMAN: Jeffrey, if I can --

TOOBIN: I want to point out it's not clear what kind of cooperation he can provide, whether he will provide evidence of other illegal activities, but the fact that the national security adviser to the president of the United States is pleading guilty to a felony is a very big deal in and of itself. It certainly shows that the Mueller investigation is far from winding down, but in fact, gearing up.

BERMAN: Again, just some perspective here. The president's former campaign chair, Paul Manafort, has been indicted and charged with crimes, and the president's former national security adviser, Michael Flynn, has now been charged with lying, and will we expect plead guilty.

Jeffrey, another legal point here, this seems to be a fairly narrow charge that he will plead guilty to. This is specifically just about conversations he had with the Russian ambassador during the transition.

It does not include all kinds of questions about how Michael Flynn -- whether he registered the right way, as a lobbyist, questions he had with Turkey, and his own business interactions, that's not part of this.

Now, I guess we don't know for certain whether or not, not being charged for that is part of the deal, but one of the things we do know is that Michael Flynn was very concerned about protecting his son, who was, of course, tied up with all of that.

TOOBIN: That's right. Something you will certainly hear from the White House and White House advisers is that this wrong doing, assuming that Flynn pleads guilty to it, does not involve other people in the White House.

It does not suggest any sort of conspiracy behavior, wrong doing by the president or the president's family or other people in the campaign. It's a discreet crime committed by Michael Flynn, if it was, in fact, committed by him, of lying to the FBI.

So, you know, while it is highly significant, it does not in and of itself implicate other people, including the president, with criminal wrong doing.

BERMAN: All right. Jeffrey, stand by. We have much more to ask you. We have a breaking response from the White House right now, a nonresponse, if you will. (Inaudible), a White House spokesman says the White House is not going to respond to this, although White House lawyer, Ty Cobb, will, at some point.

I am joined now by Jonathan Martin, a CNN political analyst and writer for "The New York Times." Jonathan, we have been hearing a lot from the president this week on a whole range of subjects.

People wondering what is going on in his head, and now that his former national security adviser is pleading guilty in the Russia investigation, does it show you that maybe the president knew this was coming?

JONATHAN MARTIN, CNN POLITICAL ANALYST: I don't know if he knew it was coming, but I can say this with total confidence, this could not come at a worse time for the president and for his party. Think about this for a minute, John.

They are on the doorstep of passing their first major piece of legislation of the year, and it's now December 1st. The Senate is poised to pass a sweeping tax cut bill late tonight or perhaps tomorrow. It appears they do have the votes. The House has already passed their version. That would give them a real victory.

We can litigate what that means in terms of the campaign next year, because Democrats will say it sure as heck is not a victory, but it's an accomplishment that Mr. Trump and his party has desperately sought.

Here at this very moment of trying to get this bill done, we are faced -- or they are faced with word that the former national security adviser, a mere nine months ago, has been taking into federal custody for lying to the FBI.

If you are the president -- if you are Mitch McConnell and Paul Ryan, I think you will be uttering a few four-letter words today.

BERMAN: All right. Just to bring people up to speed here, Michael Flynn, the president's fired national security adviser, we understand, will plead guilty, we believe he will plead guilty to lying to the FBI. That will happen at 10:30 today. This is part of the Russia investigation.

He will be the second player involved with the Trump campaign to plead guilty, to lying about Russia. The first was George Papadopoulos who Trump associates have called a coffee boy.

[09:25:10] Well, you know, Retired General Michael Flynn is no coffee boy. He was the president's national security adviser and most prominent foreign policy adviser during the campaign.

I am joined by our chief national security correspondent, Jim Scuitto, on the phone. Jim, you've been doing some reporting over the last few minutes. People close to Michael Flynn, how are they responding?

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT (voice-over): For the last several weeks I have been speaking to people that served under him and with him in Iraq and Afghanistan, very close to him and remain close to him, and their initial reaction to this -- listen, lying to the FBI is no small thing.

But their initial reaction is this is what some had feared because, as Jeff Toobin was making the point moments ago, remember, he's also we know been under investigation, for instance, failure to report income from a foreign government, that for a speech he gave in Moscow in 2015.

Failure to register as a foreign agent for the work he did as a consultant for Russia and Turkey. Expansive potential crimes that we know the special counsel was looking into, and that's not contained in the initial unsealed indictment.

So, reaction from people close to him is, listen, this is serious, no question, lying to the FBI, people go to jail for lying to the FBI, but again, at least, the initial indictment not as far reaching the charges as they had feared.

Others made this point on your air, John, but let's not under play this either. This is the president's national security adviser, one of his most vocal supporters throughout the campaign, a retired three- star general, the director of the Defense Intelligence Agency, commander of U.S. forces in Iraq and Afghanistan at a very key time who now has been charged with a federal crime and somebody extremely close to the president. That, again, is no small thing, and reaction from folks close to him is that it's not as expansive as they feared.

BERMAN: Of course, there may be a key reason for that. We don't know this, but it could be some part of a deal to get Michael Flynn to cooperate and you get him to plead guilty to a lesser crime in order to get him to cooperate in look into other things.

Listen to this, "On or about January 24th, 2017, Defendant Michael T. Flynn did willfully and knowingly make materially false, fictitious, and fraudulent statements and representations in a matter within the jurisdiction of the executive branch of the government of the United States.

To wit the defendant falsely stated and represented to agents of the Federal Bureau of Investigations in Washington, D.C. that number, on or about December 29th, Flynn did not ask the government or Russia's ambassador to the United States to refrain from escalating the situation in response to sanctions that the U.S. had imposed against Russia the same day.

And Flynn did not recall the Russian ambassador subsequently telling him that Russia had chosen to moderate its response to those sanctions as a result of his request. Count two, on or about December 22nd, Flynn did not ask the Russian ambassador to delay the vote on or defeat a pending United Nations national security resolution and that the Russian ambassador subsequently never described to Flynn Russia's response to his request.

Jim Scuitto, this has to do with those conversations that Michael Flynn had with the Russian ambassador during the transition, and sanctions that were placed by the Obama administration. Conversations that, apparently, were picked up in a surveillance where Michael Flynn, did, according to this account ask Russia to hold off and not do anything until Donald Trump takes office, correct?

SCIUTTO: Correct. John, remember, this is not just a small lie, right? While the indictment may include less than some had feared, remember the context of this lie. This is during the transition. President Barack Obama is still president of the United States.

You have the president-elect, his soon-to-be national security adviser, the concern being possibly conveying to the Russians that the sanctions that the current president of the United States just imposed on Russia for election interference, that the incoming president, who is not president yet, may have a different view.

And this goes to a question, you know, a principle of American politics. There's only one president at a time representing the U.S., making decisions. There's an old law that is rarely prosecuted called the Logan Act, and it makes -- it could be relevant to this as well. So yes, the indictment is just for a lie, but the context of that lie has potential bigger implications, right?

BERMAN: Sure.