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Trump Predicts Russia Probe Exoneration: Allies Fear "Meltdown"; Trump Calls Russia 'Rival' After 2 Calls With Putin In 4 Days; New Tax Bill Provision Benefits Wealthy Trump & Corker. Aired 7- 8p ET

Aired December 18, 2017 - 19:00   ET


[19:00:02] LEYLA SANTIAGO, CNN CORRESPONDENT: Since RFPs aired, FEMA has reached out to them, even helped them with the paperwork to get benefits that they now qualify now that it's a certified death. For example, funeral expenses that will now be covered.

WOLF BLITZER, CNN ANCHOR: Leyla Santiago joining us from Mexico City. She's done amazing reporting from Puerto Rico. Leyla, thanks very much.

That's it for me, thanks very much for watching. Erin Burnett OutFront starts right now.

ERIN BURNETT, CNN ANCHOR: OutFront next, attacking Mueller, Trump says he won't fire him. But is he destroying him, will it work? And the breaking news train derailment deaths, rescue efforts hampered at this hour, to the danger of dangling train cars and extraterrestrials among us. The secret U.S. government effort to hunt for UFOs exposed. And tonight OutFront, the man who led the classified program. Let's go, OutFront.

And good evening, I'm Erin Burnett. OutFront this evening counterattack, team Trump's strategy to discredit the Special Counsel Bob Mueller, the man heading the Russia investigation. It's multi- pronged effort aimed, it appears, at undermining the probe, coming straight from the top, the president of the United States.

Let's start with this slamming of the Justice Department and the FBI. He's called the state of the agency the worst in history. Adding that it was "in tatters".


DONALD TRUMP, PRESIDENT OF THE UNITED STATES: It's a shame what's happened with the FBI, but we're going to rebuild the FBI, it'll be bigger and better than ever. I can say, this, when you look at what's gone on with the FBI and with the Justice Department, people are very, very angry.


BURNETT: Well, Trump advisor, Kellyanne Conway in lockstep with the anti-Mueller strategy saying directly that the investigation was tainted from the start.


KELLYANNE CONWAY, WHITE HOUSE COUNSELOR: The fix was in against Donald Trump from the beginning.


BURNETT: Well, Democratic Congressman Jackie Speier on House Intelligence Committee thinks something else is going on. Here she is.


REP. JACKIE SPEIER (D), INTELLIGENCE COMMITTEE: I believe that the president wants all of this shut down. He wants to shut down these investigations and he wants to fire Special Counsel Mueller. The rumor on the Hill, when I left yesterday, was that the president was going to make a significant speech at the end of next week. And on December 22nd, when we are out of D.C., he was going to fire Robert Mueller.


BURNETT: OK, that's speculation and gossip, and there's no evidence at this point that it's true. In fact, the president denied just last night that he is giving any thought to giving Mueller the boot.



TRUMP: No, I'm not. No.


BURNETT: So let's be clear, the president and his allies are out to disparage Bob Mueller's investigation. And that may be the goal, they don't need Mueller to be fired to accomplish that. In fact, Trump makes his opposition look silly and hysterical, if he does not fire Mueller after they say that he's going to.

And Trump, now aided by some mainstream Republicans who are now jumping on the bandwagon, he could end up the victor by calling the entire investigation and therefore its conclusion into question as politically motivating.

Because here's what team Trump is doing, lawyers for Trump's transition team are charging that Mueller's team obtained e-mails they shouldn't have, forcing Mueller's team to issue a rare statement, standing up for themselves saying in part and I quote, "When we have obtained e-mails in the course of our ongoing criminal investigation, we have secured either the account owner's consent or appropriate criminal process."

Now, legal experts say team Mueller is right, those e-mails were on .gov (ph) addresses, which means a government domain. But Trump is raising questions, trying to weaken the credibility and integrity of the investigation. And tonight, we are learning that the president is convinced he will exonerated, he's boasting about it to his friends. He actually thinks he's going to get a letter from Mueller clearing him of any involvement. Obviously, so far, there is no such letter.

And if it doesn't happen, sources are warning of a Trump "meltdown". Let's star with Manu Raju who's OutFront on Capitol Hill. Manu, you just spoke with the chairman of the Senate Homeland Security Committee about those e-mails that the Trump team says were obtained unluckily by Mueller. And what are you learning?

MANU RAJU, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Well, he's sympathetic to the concerns being raised by the Trump team, saying that they're raising "legitimate" concerns because of what he believes that those are private e-mails. This argument, Ron Johnson, told me that these are not -- should not be the domain of the federal government. In fact, he is now seeking to potentially change federal law to make it clear that those should not be in the hands of the federal government. Those should be private e-mails, those Trump vision (ph) e-mails that issue right now, which the Trump team says they should not have gotten -- the Mueller team should not have gotten a handle on.

So, right now, Erin, some sympathetic years from a very top Republican because he was a Trump team over the weekend that sent that letter to Ron Johnson over the weekend expressing those concerns, but his counterpart in the House, Trey Gowdy, says he's not willing to move forward on this right now. So this is an issue for the courts, not for Congress, Erin.

BURNETT: Yes, and Manu, I know you have some new reporting today about what exactly Trump's thinking is on this. What are you learning on that?

[19:05:01] RAJU: Yes, that's right. Behind the scenes, we are told that President Trump is expressing some confidence, confidence that he may be exonerated very soon. In fact, he asserted to tell advisers that he expects Mueller to potentially even issue a letter saying that he did nothing wrong and saying that he's essentially been cleared of this, from this investigation now.

The concern among several of his advisers that had looked this investigation is still ongoing, in fact, there are very significant signs that it's just picking up steam, particularly in light of Michael Flynn guilty plea, in which he also said that he would cooperate with Special Counsel Robert Mueller's investigation. So there's concerns tonight, Erin, that if he is not exonerated sometime soon, that perhaps the president may do something rashly, perhaps even fire Special Counsel Robert Mueller. But of course, he's denying he will do that right now, Erin.

BURNETT: All right, thank you, Manu. And now, Richard Painter, former White House ethics lawyer under President George W. Bush. Juliette Kayyem, former assistant secretary of Homeland Security under President Obama. And here on set with me, David Gergen who served as adviser to four presidents.

Juliette, let me start with you. Is discrediting Mueller and his team right now, you know, look, even better than firing him instead, right? They discredit him.

JULIETTE KAYYEM, FORMER ASSISTANT SECRETARY, DEPARTMENT OF HOMELAND SECURITY: Absolutely. And I think that's what they're doing. I know there's a lot of chatter about the possibility that Trump will fire Mueller. And my opinion, that would be really messy for the Trump White House. In fact, they still have the pardon powers. Remember, he did not -- Donald Trump did not say no to the possibility of pardoning Flynn or potentially Jared Kushner.

I think that this -- their strategy is essentially what we call greasing the runway, you're prepping the battlefield in anticipation of some bad news coming out of the Mueller camp. But, I know we're focused on this, but remember in the end, we don't know what Mueller is going to come up with.

I mean, if it, in fact, is real clear evidence of collusion or something close to collusion, or something having to do with Jared Kushner, all of this stuff, I believe, is not going to matter, right? Because eventually, you're going to have the e-mails, you're going to have the lies, you're going to have whatever. So this is a way for -- the Trump team, I think, is probably a little bit panicked about what Mueller actually has, trying to create enough exhaustion is what I would call it to make us sort of not care what Mueller really comes up with.

BURNETT: So David, in terms of discrediting now, Trump just has to raise questions, right, among those who are mainstream or in the middle, right? And in some level, he seems to be doing that. Senator John Cornyn, number two GOP senator, is now saying he has doubts about Mueller, when before, no one of -- that Cornyn was saying any such thing. Here's John Cornyn.


SEN. JOHN CORNYN (R), MAJORITY WHIP: He needs to make sure he vets that team, I have confidence in Director Mueller, I would just think he would be concerned about the appearance of conflicts of interest that would undermine the integrity of the investigation.


BURNETT: Right, confidence, but yet raising that shred of doubt.

DAVID GERGEN, FORMER PRESIDENTIAL ADVISER: I think it's very clear that President Trump and his minions are following a two-track strategy. On one hand, the president tries to stay above things, I'm going to be exonerated. I'm not going to fire Mueller. On the other hand, they got the second track, that if -- so if things do go to hell for him, if he really does get nailed by Mueller, then they can discredit it. They built up all these doubts. I don't think they'll ever bring the public fully over to their side, they understand that. But if they can sow enough doubt, they can perhaps get 40% of the

public to think it was tainted -- the fix was in, as Kellyanne Conway says, from the beginning. But I -- well it worked ultimately. I think it's working better than we would have imagined so far, in the sense of creating the doubts. We've got -- but I do think that this e-mail controversy is very political. It's not legal. You know, if --

BURNETT: On the text or the e-mail that reflects --

GERGEN: Depends on the e-mails that Mueller has --


GERGEN: -- these e-mails. Well, first of all, he went to the General Services Administration, which had the e-mails and they gave him to it. He did everything right, he did it --


GERGEN: -- the right way. If you have any blame, it ought to be the GSA, not the person who's doing the law enforcement investigation. But beyond that, you know, if you've got these kind of complaints, there's something called the courts. And that's where you go to resolve these. Even Trey Gowdy said they ought to go to court.


GERGEN: Yes, there's --

BURNETT: And of course, Richard, that's not where they went. They have gone to Congress with this letter.

RICHARD PAINTER, FORMER WHITE HOUSE ETHICS LAWYER FOR PRESIDENT GEORGE W. BUSH: Yes, they went to Congress because they want to attack Bob Mueller and get as many members of Congress as they can to attack Bob Mueller. And I don't think we're out of the woods on the potential for the president to fire Bob Mueller. We now have Congress going home over the holidays. And if Bob Mueller is fired, we need the House and Senate Judiciary Committees to be convening immediately.

And that's going to be difficult over the holidays. And they've also taken out of the action, the -- probably the most articulate member of the Senate Judiciary Committee, Al Franken, and we have no idea who's going to be replacing him on that committee. And allegations that had Roger Stone and Fox (ph) fingerprints all over them. So, this is a big mess. And I think the next two weeks --

[19:10:04] BURNETT: And --

PAINTER: -- is going to be critically important to watch out and make sure that Bob Mueller isn't left in the Washington, D.C. there alone with Donald Trump, that's not a good situation.

BURNETT: I mean, because here's the thing to David's point. They're saying that these e-mails were obtained unlawfully, right? They send this letter to Congress. I want to play again what Trump is saying about the e-mails because in a sense, everyone would say he was going to fire Mueller and he's now playing a much smarter game. Here he is.


TRUMP: Not looking good, it's not looking good, it's quite sad to see that my people are very upset about it. I can't imagine there's anything on them, frankly, because as we said, there's no collusion. There's no collusion whatsoever. But, a lot of lawyers thought that was pretty sad.


BURNETT: The lawyers, lawyers for his transition team. Mueller's team had to push back saying they did nothing wrong. And Juliette, the question is, what matters more? Mueller's in the right, or he was forced to issue a statement, as if he had maybe done something wrong.

KAYYEM: I think the statement was important, because I think it really did shut down the legal argument, of course, as David Gergen just said. This is, of course, in the political arena. But no one actually believes that there was a strong legal argument. I served on a transition, the idea that my e-mail was mine is somewhat ridiculous.

And I think just taking a step back, why is this happening, it is because Jared Kushner and other witnesses -- or spoke to Mueller and spoke to the committees, not knowing that Mueller had these 20,000 or 30,000 e-mails. So to me, I understand sort of all this noise and why they're doing it, but I also believe that that noise is animated by considerable fear that members of the Trump family, a son or a son-in- law or others are in big trouble.

And so if we just keep our focus on that and Mueller comes up with a case, or maybe, and it doesn't implicate Trump but maybe implicates others, that is where the focus will be at that moment. And all of this is -- I think that it's important and it's noisy, and everything but -- in the end, as long as the -- this suggests to me that the White House is much more panicked than not panicked about what they think Mueller has.

BURNETT: Which is really a smart point, David, I know you have additional points. Now, panicked, but also very clever.

GERGEN: It's clever.


GERGEN: I thought one straw in the wind was the story in the last few days, that the Kushner legal team has gone out and hired a P.R. firm that specializes in crisis communications. Why would he want such a team if you don't expect a crisis to be just over the horizon?

So I think they're moving that direction, but I would suggest that if Trump is taking Mueller, said I'm not thinking about Mueller, there's a real possibility he's not going to go after Mueller. There's also a possibility to go after Jeff Sessions, go after his deputy, possibility to go after the head of the FBI, and let them reign in Mueller.

BURNETT: Richard.

PAINTER: Well, I'm very worried about it, particularly for the next couple of weeks with Congress to help (ph) because it's Congress's job to hold President Trump accountable. And he can fire his attorney general and put someone else in there, who's going to fire Robert Mueller. They're just what President Nixon did in the Saturday Night Massacre. And we've got a couple of weeks here, where Congress is out. Once again, we've got Al Franken sidelined, which I think is a travesty. We have a real mess on our hands.

And I would not say that Robert Mueller is out of the woods at this point in time. President Trump says he's not going to fire Robert Mueller. Well, President Trump says a lot of things and Kellyanne Conway, I think people stop listening to her months ago.

BURNETT: All right, I thank you all very much.

And next, Trump says Russia is a rival. So why was he on two calls with Putin in the past four days?

But Senator Bob Corker, richer, a lot richer. So who suddenly changed his vote on the tax bill from no to a yes? Well now, he insisted he didn't read the bill. In fact, he only read a two-page summary. And, is this a UFO? The Pentagon's top secret program looking at exactly this question, exposed tonight. The intelligence official who led this effort is OutFront tonight.


[19:17:54] BURNETT: New tonight, President Trump slamming Russia and China as American rivals in a speech, where he laid out his America first national security plan. Here's the president.


TRUMP: We also face rival powers, Russia and China, that seek to challenge American influence values and wealth. We will attempt to build a great partnership with those and other countries. But in a manner that always protects our national interest.


BURNETT: But his actions are far friendlier at least when it comes to Vladimir Putin. President Trump had spoken on the phone with Putin twice in just the past four days. James Clapper is OutFront, the former director of National Intelligence under President Obama.

And Director Clapper, great to have you with me. Twice in four days, how unusual is that?

JAMES CLAPPER, FORMER DIRECTOR OF NATIONAL INTELLIGENCE: Well, it's pretty unusual for any head of state engagement, but particularly when it's with the head of state of Russia. And so, this very solicitous dialogue that's going on here is -- and I think in stark contrast are against the backdrop of the profound existential threat that Russia poses to this country. And I would have hoped and expected that in a National Security Strategy that would have gotten more prominent billing that apparently it has. And of course, you have to be struck by the contrast between even what the National Security Strategy says versus the manner in which the president's conducting business with Russia.

BURNETT: And I want to ask you about what he said versus what's actually in the plan. But director, the president also spoke specifically about a terror plot that the CIA helped forth (ph) in St. Petersburg and obviously they called the Russians involvement in the bottom here about it. Here's what he said.


TRUMP: Yesterday, I received a call from President Putin of Russia thanking our country for the intelligence that our CIA was able to provide them concerning a major terrorist attack planned in St. Petersburg, where many people perhaps into thousands could have been killed.

[19:20:01] They were able to apprehend these terrorists before the event.


BURNETT: What's your reaction, director, to the fact that the president said this publicly? Big national security speech, he goes out and says the CIA shared intelligence with Russia.

CLAPPER: Well, it's normally not done. I mean, this is a -- this is something we, the U.S. intelligence community has long done, if there is a life-threatening intelligence that has bearing on people's lives are at stake, we've shared that with the friend and foe alike. It's kind of, you know, an obligation -- we have moral obligation to -- as a duty to warn.

And, so we've done this before. What is unusual that, it would be made public like this, mention of it. Normally, that kind of thing kind of stays below the radar. And the other comment I would make that at least in my experience in trying to deal with the Russians, information or intelligence sharing is largely one-way street. We share with them, and we don't get -- there's not a very good track record for getting much back from them.

BURNETT: So, you know, when you talk about the different between what he said in the speech and what was written, I wanted to share this. This actual text of Trump's national security plan is different on paper than what he said. It said, "National actors such as Russia are using information tools in an attempt to undermine the legitimacy of democracy." OK. That's what he said, and I know many could say, it could be much stronger than that. But out loud, he didn't even say anything close to that.

What matters more, what he says on paper or what did not come out of his mouth?

CLAPPER: Well, what matters is what does come out of his mouth, and that didn't. And all that speaks through really is one tool or one enabler that the Russians have employed to fairly well against us and our allies. What I would have liked to have heard more about is recognition of the profound threat that Russia poses to us. You know, their nuclear arsenal, which they are hell-bent to modernize is designed for one adversary. And that's the United States. Or the fact that they're in abject violation of the INF treaty, the Intermediate-Range Missile Nuclear Forces agreement.

I would like to have heard about that, a more realistic depiction, or reflecting an understanding of the threat that Russia actually poses. I get it on, you know, whenever our interests converge as they do on terrorism, we should work with them. But I think I'd feel more comfortable if that were -- underpinning of that were recognition of the threat that Russia really poses to us.

BURNETT: Director Clapper, thank you as always for your time.

And next, the provision added to the tax bill that could be another multimillion dollar windfall for the president. Jared Kushner and a key senator who changed his vote from no to yes.

Plus, the breaking news, we are live on the scene tonight of that deadly train derailment, rescue efforts are touch and go, some railcars are teetering on the edge.


[19:27:19] BURNETT: New tonight, a tweak in the tax bill could be a major windfall for President Trump and possibly for a crucial Republican who suddenly turned from a no to a yes. All but ensuring the bill passes. I'm talking about Senator Bob Corker. That a provision allows people to make money off of renting or leasing real estate to take advantage of a 20% tax deduction. Coincidentally, that's how Corker and President Trump make millions of dollars between 1.2 and 7 million just for Corker alone last year.

Now, Corker was a vocal no vote, the statistical (ph) change is not why he flipped to yes. In fact, he said he didn't even know about the change, which raises a crucial question. Then why is he supporting the bill, because he said deficits were the reason he was voting no in the first place, and of course, provision like this new one certainly don't address the deficit issue if anything they make it worse by putting Corker setting about face aside.

The other big winner, of course, is President Trump. According to records, Trump Tower here in New York generating to $14 million in rent and leases, and his building down on Wall Street, $17.4 million.

OutFront tonight, Grover Norquist, president of Americans for Tax Reform and Austan Goolsbee, former chairman of the Council of Economic Advisers under President Oboma.

So, governor, let me start with you. Let's talk about Bob Corker. How in good faith can he vote for a bill when it not only clearly benefits him, which OK, fine, you didn't know about, but now he does? That -- but it also adds to the deficit, which he said, on principle, was the reason he couldn't support it.

GROVER NORQUIST, PRESIDENT, AMERICANS FOR TAX REFORM: OK. No. I talked to Corker two days before -- the Friday, he voted against the first bill in the Senate. He had hoped to have a trigger. But when I talked to him on Wednesday for half an hour, he was for the bill, he had agreed that there would be a 1$1.5 trillion reduction in total revenues. That was the amount of the reduction in taxes that he thought was appropriate, that growth would cover that. He then later thought maybe we should have a trigger to enforce it. And then when he got out on a limb on the trigger, he couldn't come back because the parliamentarian, not the Republican Senate, they were willing to give him a trigger, the parliamentarian said, you couldn't do that.

So he was never objecting to the 1.5 trillion, and this whole discussion we're having is a teeny piece that doesn't even have anything to do with the 1.5 trillion. But he was always a yes on this tax bill, he wrote the 1.5, that was his number that Toomey (ph) and other Republicans negotiated with him, and Fortman (ph) and others. So, this idea that he flip-flopped is just fundamentally wrong. He's been -- this was his idea, 1.5, and this -- I -- the taking --


NORQUIST: -- House version rather than the Senate version --


NORQUIST: -- doesn't change any of the deficit.

BURNETT: -- everything you're saying is absolutely true?


BURNETT: But Austan -- I'm not saying it is, I'm just saying, let's take it that way.

But Austan --

NORQUIST: I'm telling you this.

BURNETT: -- what about the fact that the tax is -- I mean, this is assuming that the taxes get taken away for individuals in eight years.

[19:30:07] That's not going to happen, this whole $1.5 trillion is a whole load of BS, and I'm sorry to call like that but it is, and Grover, you know it. Austan.

AUSTAN GOOLSBEE, FORMER CHAIRMAN, COUNCIL OF ECONOMIC ADVISERS: Look, the thing is, the American people know perfectly well what this bill is. That's why only 26 percent of America approves of this bill. This is the Roy Moore of tax plans. This is a sham wrapped inside of a travesty, inside of an enigma. We're finding each day, a new stinking Easter egg we found. This one that -- oh it turns out the president of the United States

stands to personally benefit millions. We're going to find a series of more of them, such as the president promising that hedge fund -- the heads of hedge funds would lose their carried interest deduction. Oh, we just found out they don't lose their carried interest deduction.


GOOLSBEE: It's a massive tax cut for high-income people and large corporations and barely anything and for millions of people and increase in the taxes on the middle class.

BURNETT: Well, it is an increase for the middle class and wealthy in many blue states, of course, which have high tax rates. A lot of people are going to be paying more across this country.

Grover, you know the issue is here also what about this, what is it, the average family of four, $170 a month. That's how much they're going to save according to the GOP, even GOP estimates. How is that going to transform the economy?

GROVER NORQUIST, PRESIDENT, AMERICANS FOR TAX REFORM: OK, two things, one, I hate to break up the party about how lower and middle-income people aren't going to get anything, but I'm looking at the joint tax committee which is the official bureaucratic group that does all these ratings and if you look at who gets the biggest tax cuts, it's people earning between $20,000 and $50,000 a year, more as a percentage of their tax payments than the other group.

So, this idea that somehow the rich guys are getting a bigger tax cut than other people, you're actually looking at a 6 percent cut for people who are in more than a million, 13, 11, 10 for people in the $20,000 to $50,000, range they get a larger percentage tax cut of what they pay.

So, this argument that the D's are trying to push that lower and middle-income people are not going to benefit the problem they have is between now and the 2018 election, every two weeks, people are going to see one in their paycheck and two in their 401ks. Their 401ks will tell them their assets are going up and their pay stubs will tell them they got to pay increase to the government.

GOOLSBEE: Two-thirds of Americans do not have a 401k. This is the root of the problem.


NORQUIST: OK, 401k, IRA, own shares of stocks --

GOOLSBEE: Two-thirds of America has no 401k and this is geared toward very high-income people. We're going to raise it so that we get a big tax cut for estates over $20 million dollars. We're going to preserve the tax breaks for private jets. Let's preserve them for hedge fund managers. Let's write into the law -- this writes into the law whatever benefits

to the middle class, let's get rid of them by the end of the bill, so that millions of people are actually paying more by the end of this bill. That's why 26 percent of America supports it. It's the least popular thing in decades.

NORQUIST: And your problem is that you're going to have -- one second.


BURNETT: -- tax cut, right, they have to admit that the focus of this bill is to give a tax cut to corporations which will then juice 401k stock prices, wages and everything else, right? That's the bet. But that is a bet, because what you see on your taxes is real money and what you see in your 401k if you even have one is not real money, because it could go down the next year. And I don't know anyone who really treats it like real money.

NORQUIST: OK, two things more than half the country is in the stock market, 401ks, IRAs, defined-contribution, savings and in addition to that, every cop, fireman and teacher has their money saved in the real life stock market, inside their pension.

You may not care about those but they do notice these things, and they do matter.

GOOLSBEE: I care about them, let's give them a tax cut rather than to the big corporation and try to juice the stock market to flow down to them.

NORQUIST: There's nothing flowing down about stock prices going up when you own shares of stock.

But you're also forgetting a couple of things. We take the standard deduction from $12,000 up to $24,000. You can tell people who make $24,000, $25,000 and $50,000 --

GOOLSBEE: But you eliminate the single exemption by the way. So, like it's not a double but OK.

NORQUIST: It's doubling from $12,000 to $24,000, that's the standard deduction. You don't have --


GOOLSBEE: Getting rid of the personal exemptions and then phasing it out and abolishing it by the end of the bill. This is exactly the example of what I'm talking about.

NORQUIST: Add to that, OK, the 6.6 million Americans that you don't want to talk about, the ones who are hit in the 2015, the most recent numbers they've got to show, with the Obamacare penalty because they didn't want to buy Obamacare, $700, $2,400 for family of four, they paid -- the 6.6 million Americans are directly screwed by the Obamacare legislation, they pay a tax and get nothing, nothing, nothing for it.

[19:35:010] That ends with this law. You don't like to talk about that, but 6.6 million Americans are going to notice that they're no longer getting screwed by the government and they're going to notice the tax cut in this bill for people, 80 percent of whom or in less than $50,000 a year.


NORQUIST: This stuff -- this bill has been written over the last five years in public, in hearings, it was all put together a couple years ago in the House side as well. And so, all of the pieces of this had been looked at, scored by joint tax, scored by CBO, the House and the Senate had two different approaches on how do you deal with subchapter S corporations, and they're both fine ways to do it.


GOOLSBEE: The reason it is epically unpopular is because people have seen what's in it. That's all I'll say.

BURNETT: All right. And I -- thank you both very much.

NORQUIST: And by November, they'll know what's in it, and that's why you're wrong.

BURNETT: And I will say deficit numbers are all bogus. No one has any idea what they are until they are what they are, but it is pretty incredible, that in a country where Republicans say they're so obsessed with the deficit, they're willing to pass a plan that adds a trillion to have dollars to it if it's even accurate. Thank you both.

NORQUIST: We're obsessed with growth. You're obsessed with the deficit. Growth --

BURNETT: No, actually, I mean I can go through books written by people on the GOP who are obsessed with the deficit, and the debt in this country. It's been like the single biggest thing, unless when Democrats were in power. Even the president pointed out Barack Obama's debt record. I'm just pointing out Republicans are happy to add.

NORQUIST: And now the Democrats are obsessed on it.

BURNETT: Thank you both.

And next, breaking news, we are live on the scene of that deadly train derailment in Washington state. Was speed a factor?

And unidentified flying objects and extraterrestrials, the secret Pentagon program is a secret no more. And the man who headed that effort to find them is OUTFRONT.


[19:40:40] BURNETT: Breaking news: at least three people are dead, nearly 100 more taken to the hospital after a train derailed on its very first trip in Washington state. Officials are calling the scene tonight horrific. Thirteen of the trains, 14 cars jumped off the tracks, many falling from an overpass onto the interstate below. I'll play part of the frantic call between the train conductor and the dispatcher right after the derailment.


DISPATCHER: Hey, guys what happened?

AMTRAK 501 CONDUCTOR: We were coming around the corner to take the bridge over I-5 there, right north into Nisqually and we went on the ground.

DISPATCHER: Is everybody OK?

AMTRAK 501 CONDUCTOR: I'm still figuring that out. We got cars everywhere and down on to the highway.


BURNETT: They do sound remarkably calm considering the horror that they were going through at that time.

Jon Ostrower is live on the scene, joins me on the phone.

And, John, what are you learning? I mean, this is a true catastrophe.

JON OSTROWER, CNN AVIATION EDITOR (via telephone): It really is. The investigation is still in its earlier hours and the NTSB is on the scene. As of right now, investigators and authorities haven't cured any particular areas of focusing on. But Amtrak officials do say that the speed that the train was going at is going to be examined as part of the investigation and they haven't released the preliminary facts about how fast the train was going when it actually derailed.

BURNETT: You got very close to the scene though and I know that it is truly horrific.

OSTROWER: It is -- it is a huge mess. It's really -- it's really awful. The train cars are hanging off either sides of the --the trestle over interstate 5 here. State and local, federal officials are on site this evening, south of Seattle, setting up lights on scene and staging equipment as they examine the wreckage and really prepare for its removal. It's just right over one of the busiest highways in the country.

And through all this, there's just an understandable thirst for answers about this horrible tragedy. Right now, there are a few concrete details surrounding the circumstances at this point. And NTSB investigators, you typically take months or even years to establish how long accidents like these that actually unfolded.

BURNETT: Just so horrible. Thank you very much, Jon.

Well, the president tweeted twice about the deadly train derailment. First saying, quote, the train accident that just occurred in DuPont, Washington, shows more than ever why our soon-to-be submit an infrastructure plan must be approved quickly. Seven trillion dollars spent in the Middle East while our roads, bridges, tunnels, railways and more crumble. Not for long.

Of course people died in this crash, there are people who are dead tonight. The president was immediately slammed for his lack of empathy and his tone.

So, he responded minutes later with another tweet: My thoughts and prayers are with everyone involved in the train accident in DuPont, Washington. Thank you all of our wonderful first responders who were on the scene. We are currently monitoring here at the White House.

Our political editor at large Chris Cillizza is OUTFRONT.

Chris, that was a typical Trump response.


BURNETT: That with, you know, his gut and what how we wanted to -- how he wanted this to impact his agenda and then realizes that wasn't the right way to come out of the gate.

CILLIZZA: Yes, a lot of people say, media take things out of context, give them a break. The problem here is the context does not work in Donald Trump's favor. Remember after the Orlando Pulse nightclub shooting, he came out and said: many people are congratulating me on predicting terrorism, that was the first tweet out of the box. After the tragedy in New York City, man running people down, it was, I told you.

So, his first instinct we now know to your point, Erin, is this gut political angle, I was right, people said I was wrong, but I was right.

BURNETT: And then on top of that, you know, he's touting his infrastructure plan. The irony on that is that his infrastructure plan actually cuts funding for an Amtrak, building new Amtrak tracks. In fact a 13 percent cut in transportation spending and "The Washington Post" says a more than $500 billion reduction in some of the Amtrak subsidies for long distance route.

CILLIZZA: Yes, remember, the budget is something of a zero-sum game. He's adding heavily under vent defense spending. It has to come from places, and it comes from places like education, transportation that we don't talk about as much.


CILLIZZA: What they would argue is, well, we're streamlining programs that don't matter. OK, but it is difficult if the president comes out and says, we must do this thing, that's the reason crashes like this happen, when you have those cuts.

Again, when you are the president of United States reacting in the middle of -- it's important to note as you did -- this tweet the first one is at 1:41 p.m., lots of things -- I mean, there's a lot so we don't know, but even back then, way more, and that's what he sort of react to. That's his gut. I think it's telling -- and it's not the first time, I would remind people it's not the first time, he's done it. That -- this is what he does in situations like this.

[19:45:00] BURNETT: That absolutely showed that, that's what it is.

All right. Well, Chris Cillizza, thank you very much.

CILLIZZA: Thank you.

BURNETT: And I'll say to you, I'm sorry about my eye. It literally happened right before the show. I know viewers have noticed it. I apologize to all of you, but just moments before the show could happen --

CILLIZZA: Anyone who doesn't have -- anyone who has never had an issue like that, I cast the first stone.

BURNETT: Sometimes things happen too quickly to even respond to them. So, thanks to you.

And next, tens of millions of dollars spent on investigating UFOs. Well, this is for real and the man who had at the top secret government program is going to tell you all about it. He is my guest.

And a late-breaking update on this Trump judicial nominee.


SEN. JOHN KENNEDY (R), LOUISIANA: Have you ever tried a jury trial?




KENNEDY: Criminal?




BURNETT: New tonight, the Pentagon secret search for UFOs. The -- for the first time, the Defense Department acknowledging a mysterious program dedicated to investigating UFO sightings. Now, this started more than a decade ago, $22 million price tag was secretly funded using so-called black money.

The agency investigating possible alien encounters like this one. This is taken by U.S. Navy fighter jet. It's an unknown object about the size of a commercial jet apparently hovering about feet above the water. The pilot on board that jet saying is he flew closer, the object peeled away, accelerating like nothing he's ever seen.

[19:50:05] Again that was a U.S. Navy fighter jet and pilots point of view.

OUTFRONT now, the former Pentagon military official who ran the covert government program up until this last November, Luis Elizondo.

Luis, thank you so much for your time tonight.

I mean, first, tell us what the purpose of the program was and why it was so secretive?

LUIS ELIZONDO, DIRECTOR OF GLOBAL SECURITY FOR TO THE STARS ACADEMY OF ARTS AND SCIENCE: Sure, the purpose of the program, Advanced Aerospace Threat Identification Program, was really designed to do just that, from a national security perspective, identify those things that we see. Whether we see them electro-optically, we see them with radar, we see them as eyewitness reports, through a myriad of different ways and avenues that we receive the information, and try to ascertain and determine if that information is a potential threat to national security in a nutshell.

BURNETT: So, what did you find?

ELIZONDO: Well, we found a lot. I think -- I think it's probably been a little bit mischaracterized in some of the social media you see and what people put out because a lot of times when we don't have a lot of information, we tend to fill in those gaps with what we think is logical, and they're still, by the way, a lot we really don't know.

I think what's important is that we have identified some very, very interesting anomalous type of aircraft -- let's call them aircraft -- things that don't have any obvious flight surfaces, any obvious forms of propulsion, and maneuvering in ways that include extreme maneuverability beyond I would submit the healthy G-forces of a human or anything biological, hypersonic velocities, low observability, positive lift, again seemingly defying the laws of aerodynamics.

So, people --

BURNETT: But do you think -- but do you believe, you know, when you get that Navy pilot saying what he said? Do you think that that was you know a UFO to, obviously I don't have any word to use, or that or something else?

ELIZONDO: Sure, that's a great question. Keeping in mind, it's not just the pilots testimony on observation. Sure, when someone comes to you who is in charge of a multi-million dollar weapon platform, who maintains a top-secret security clearance, who is paid and trusted by this country to go fight wars, and to fly over cities with live munitions and, by the way, they're trained observers with millions of dollars invested in their training --


ELIZONDO: -- I would submit to you it's pretty compelling. But on top of that, it's not just the eyewitness testimony. It is -- it is actual electro-optical data and radar returns. It's also people like radar operators and air traffic controllers.

So, I think the discussion is should be maybe a little bit broader than that. I think people are focusing just on two videos coming from a set of F-18s when really it's a lot, a lot more than that.

BURNETT: So, you know, recently I guess it was in October, astronomers spotted what they say could be the first interstellar asteroid. You see if they're kind of that strange shape from beyond the solar system. What do you see when you look at that?

ELIZONDO: Well, you know, Ms. Burnett, I have to admit to you, when I ran this program, I was fundamentally looking at my colleagues looking at two things.


ELIZONDO: What is it and how does it work?

We have deliberately stayed away from going down the rabbit hole of who's behind the wheel and what are their intentions.


ELIZONDO: Because that a lot of people have a lot of feelings towards that and are very emotional about that and what I wanted to do is to allow the data to speak for itself and then use that data to inform leadership, senior DOD leadership about the potential threat that that these type of technologies pose to national security, especially over any type of controlled airspace that we might have.

So, I'm not trying to be evasive in any way or vague with your with your answer, but --

BURNETT: Yes, well --

ELIZONDO: -- I think there's a lot of possibilities.

BURNETT: Look and I know you think it's important. I know you think that the government didn't take the threat seriously enough. So, let me just ask you point-blank the question do you believe that that life from somewhere else while you ran this program came near, visited, observed?

ELIZONDO: I will tell you unequivocally that through the observation, scientific methodologies that were applied to look at this phenomena, that these aircraft -- we'll call them aircraft -- are displaying characteristics that are not currently within the U.S. inventory nor in any foreign inventory that that we are aware of.

BURNETT: So I know you're using -- your being clear, but I mean the answer is yes?

ELIZONDO: My personal -- I can't speak on behalf of the government, obviously, I'm not in the U.S. government anymore. My personal belief is that there is very compelling evidence that we may not be alone, whatever that means.

BURNETT: All right. Well, Luis, I appreciate your time.

[19:55:01] Thank you so very much.

ELIZONDO: Yes, ma'am. And, by the way, your eye doesn't look too bad.

BURNETT: Oh, it does anyway, but OK, thank you.

ELIZONDO: Yes, ma'am.

BURNETT: And next an update on the Trump judicial nominee heard round the world.


KENNEDY: Have you ever argued a motion in state court?

PETERSON: I have not.

KENNEDY: Have you ever argued a motion in federal court?



BURNETT: New tonight, an update to a story we first brought to you last week. Matthew Petersen, one of president Trump's district court judicial nominees, has withdrawn his nomination after the video of his confirmation hearing revealing his lack of experience went viral. Remember this?


KENNEDY: Have you ever tried a jury trial?

PETERSEN: I have not.



KENNEDY: Criminal?




KENNEDY: State or federal court?

PETERSEN: I have not.

(END VIDEO CLIP) BURNETT: Well, that was Republican Senator John Kennedy who made it clear he believed Petersen was unqualified for the job when I spoke to him on Friday.


KENNEDY: You can't just walk into a federal courthouse for the very first time and say here I am I think I want to be a judge. It just doesn't work that way, especially not the D.C. Circuit.


BURNETT: Senator Kennedy revealed that he spoke to President Trump on Friday, suggesting he withdraw the nomination. Petersen who is currently an FEC commissioner withdrew himself today, though he said in a letter to the president that he hoped his, quote, nearly two decades of public service would carry more weight than his worst two moments on television.

Thanks for joining us. Anderson's next.