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Report: Woodward Says Mattis And Kelly Are Not Telling the Truth About Their Insults Toward Trump; Pressure Mounts on Trump from Many Firestorms; Trump Makes False Claims Touting the GDP And Low Jobless Rates; Hurricane Florence Gains Strength and Takes Aim at The Carolinas; Replacement for Departing White House Counsel Is Not Imminent; Trump Economic Advisor Briefs on The Growing Economy. Aired 2-2:30p ET

Aired September 10, 2018 - 14:00   ET

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


[14:00:00] BROOKE BALDWIN, CNN HOST: Quote, it is mostly anonymous sources in here. Why should anyone trust you? General Mattis, General Kelly said it's not true. Trump then writes, quote, Bob Woodward is a liar who is like a dem operative prior to the midterms. He was caught cold, even by NBC. But here is how the actual exchange went down.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: You have John Kelly, the White House chief of staff, calling the president an idiot, saying, we're in crazy-town. That's a quote.

BOB WOODWARD, REPORTER: Yes.

UNIDENTIFIED FEMALE: John Kelly now says, that never happened, I didn't say it. Jim Mattis, another person quoting as saying, the president's understanding is like a fifth or sixth grader. He comes out subsequently and says, I didn't say it. Are they lying?

WOODWARD: Uh, they are not telling the truth.

UNIDENTIFIED FEMALE: That's --

WOODWARD: These are political statements to protect their jobs. Totally understandable. But this is as carefully done as you can do an excavation of the reality of what goes on.

(END VIDEO CLIP)

BALDWIN: Let's go straight to the White House, ahead of the briefing. There's our senior correspondent, Jeff Zeleny. Jeff, you know, ahead of the briefing here, continued denials, you know, from administration officials. It wasn't me, right? Who wrote the op-ed. What are you hearing today?

JEFF ZELENY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Well, with Brooke, there's no question there's a long list of denials. People who have said that they were not involved in writing the op-ed. They say they wouldn't have written the op-ed. But the reality here is the White House still does not know who did. And the president is, of course, still seething over this, as well as he did over the Woodward book. So, you framed what part of the discussion is likely to be here at the White House briefing. It's the first one in 19 days, since august 22nd. That is the last time that Sarah Sanders has stood behind me here at this podium. And you know, so many things to talk about, ask about, of course, just on Friday, the president was calling on the attorney general to investigate to help unmask this author. The White House has tried to walk that back a bit, saying that was the president's opinion. It was not necessarily a directive or an order.

So, the question here is, we know what the controversy is inside this White House. They have certainly tried to focus more on the who dun it of it all. Who's the author of that, who spoke to Woodward, rather than the substance, actually what was discussed both the op-ed and the book. The president, of course, pushing back saying, it's a well-run machine here. But the reality is, a couple of months before it will midterm elections, it's not. And Republicans in this town realize it's not, but the White House trying to get the ship back on sail, if you will. But we also expect the potential of an expert here, perhaps more experts, you see the screens up here behind me. Of course, this White House, the entire government the keeping a close eye on the impending hurricane. That could be one of the topics of discussion here as well, Brooke. So, so much to hear and ask the White House about. Again, it's been 19 days since a White House briefing.

BALDWIN: Figurative hurricanes, metaphorical hurricanes. How about this news of the White House changing its phone policy again? What's the news there?

ZELENY: Sure, that's one more piece of the fallout of Omarosa Manigault Newman's phone taping policy. She was releasing some more tapes earlier today on "The View" and NBC. And this is just some, a continuation of that. There is a new policy now, if you go into "The Situation Room" for a briefing, you are required to leave your phone in your office, actually. So that is one way to sort of help prevent any secret recordings, if you will. So again, more of the fallout of that. But there really is a sense of there being a war within the walls of this White House. It's already, you know, a high-stress environment in any White House. But there are questions of who can trust who. So, things like this certainly just feed into it, Brooke.

BALDWIN: Jeff Zeleny, thank you. We'll see you in the briefing momentarily. Just a little perspective here, it is not just this mystery op-ed writer or Bob Woodward's book that is rattling this Trump administration. Som to Chris Cillizza we go. Chris, in your diagrams here, what, we're moving into fall and there is still so much that has happened this summer that is still unresolved for this president.

CHRIS CILLIZZA, CNN POLITICS REPORTER AND EDITOR AT LARGE: Look, Donald Trump has said repeatedly, Brooke, that he likes pressure, he thrives under pressure. Well, he's got it. I'm going to walk you through. Let's start up here at the top at noon. The midterm elections are in 57 days. Everything suggests that the Republican House majority, big trouble. Republican Senate majority, a little dicey-er, but not looking great, particularly with Texas coming onboard, Ted Cruz in trouble. Tomorrow, Bob Woodward's book comes out. We already know some of the stuff in here. Donald Trump has called Bob Woodward a liar, a wimp. He also said that he thought that Bob Woodward was very fair in a conversation Woodward taped in August, between himself and the president.

OK, we know Don McGahn, the White House counsel, is leaving. McGahn is also someone who has been mentioned as potentially writing that op- ed, although the denies it. The White House counsel's office really hollowed out. All right, we know about these two.

[14:05:00] This happened all in one week. Michael Cohen and Paul Manafort, one convicted, one pled to a series of felonies. These are Donald Trump's former campaign manager. He calls it campaign chairman, but really campaign manager, and one of his closest associates and former fixer. That continues -- that's a sort of "to be continued." moving over here, Allen Weisselberg, the CEO of Trump org, granted immunity to talk in the Michael Cohen deal as it relates to payments made by the Trump organization to Cohen to pay off Stormy Daniels and Karen McDougal. We've got that. We don't know how far that's going to extend.

And then we come back here, full circle, almost. The mystery op-ed. Donald Trump is obsessed with finding out who wrote this. We know from reporting John Kelly, the chief of staff, would rather he sort of move beyond it. Donald Trump is not the kind of guy that moves beyond public criticism from the senior levels of his administration. You combine -- any one of these, brook, very stressful. You combine all of them, and you're dealing with just a massive pressure situation with lots of moving parts and almost none of this, by the way, Donald Trump can control. And I think that's what's probably the hardest thing for him. He can't really do anything to change a whole lot of this stuff that you see. Back to you, Brooke.

BALDWIN: So, hang on, because I want to hone in on the guy on the center of your diagram. And you just heard Jeff Zeleny talking about this new phone policy, right? So, if you want to go in the sit room, you leave the phone way back in a locker or in your office. And he said, I want your analysis of Jeff's line, there is a sense that there is a war within the walls of the White House.

CILLIZZA: Well, I mean, look, the Woodward book, the op-ed, what do they both say? And what do we know from even Omarosa's book, from "Fire and Fury" by Michael Wolff from earlier this year.

BALDWIN: Alarm bells!

CILLIZZA: From what we see in his Twitter feed. There is a group of people who he believes and appear to be existing who are positioned to try to countervail what he wants. To say, this is dangerous for national security, this is dangerous for the country, we are not going to do those things. And so, I think you have a staff -- he likes the fighting. He said he likes when people fight it out. I'm not sure he likes it to this level, Brooke. But there's a level of distrust from the president to his staff, from amongst the staff, from the staff to the president, that we've not really seen in recent years. And I always remind people, we are 19 months into this thing. This is not a president in the sixth year, right? In the middle of his second term. This is a president in the middle of his first term. We almost never would see something like that, even in the sixth year of a term. To see it in the second year is -- I know I use this word all the time -- remarkable.

BALDWIN: I know, it is. Chris, thank you. And file this under remarkable, the fact that the last 24 to 48 hours, you have the vice president of the United States coming out saying, I'll take a lie detector test. Right? And as we're talking about lie detector tests, you have to wonder what the results would have shown when Trump sent this tweet out. His tweet details economic numbers that Trump made too good to be true. Quote, GDP rate, 4.2 percent, is higher than the unemployment rate, 3.9 percent, for the first time in over 100 years! Hmm. Let's go to Alison Kosik. And Alison, the numbers, the unemployment and GDP in and of themselves are correct, the hundred- year point is not at all. We even have this tweet from this economics professor who was like, this is all totally true, unless you exclude all these different years and all these different quarters, which here's my thought and then I'll hand it to you, which is, you know, these are great stats for the president to boast about. Like, he doesn't need to lie.

ALISON KOSIK, CNN CORRESPONDENT: Right, even if you look at the broader economy, look, unemployment is low, GDP is strong, consumer confidence is high. People are getting jobs. People are feeling good a about the economy. Consumers are spending money. But for some reason, the president feels like he has to just throw himself under the bus. I want to show you some pretty pictures and graphs, just to sort of put this in perspective. That tweet you showed was terrific. It listed all of those years listing where GDP was higher than unemployment. And so there you go. 2000, GDP was 7.5 percent. Unemployment, 4 percent. Bam. GDP higher than unemployment. 2003, GDP, 7 percent, unemployment rate, 6.1 percent. Bam, GDP higher. And then 2006, unemployment 4.7 percent, GDP, 5.4 percent. So, you can go on and on and on. The reality is, yes, I think the president can put that feather in his cap about the economy right now. For some reason, he's shooting himself in the foot.

BALDWIN: Yes, he should put the feather in the cap, but it's like, you don't have to -- and how easy it is for you to disprove his --

[14:10:00] KOSIK: I don't understand.

BALDWIN: Alison, thank you so much.

KOSIK: You got it.

BALDWIN: Alison Kosik for us.

Coming up, we are waiting for that first White House briefing in I think 19 days, where questions are expected to come, of course, on the Bob Woodward book, the scathing "New York Times" op-ed from that senior administration official.

Also, ahead, Hurricane Florence now a category 4 storm, taking aim at the Carolinas with forecasters predicting 150-mile-per-hour winds. We'll hear where folks all up and down the east coast and the Carolinas are preparing. You're watching CNN. I'm Brooke Baldwin.

[14:15:00] (COMMERCIAL BREAK)

BALDWIN: Let's talk about Hurricane Florence, you a dangerous category 4 storm, as it moves towards the east coast. It is expected to make landfall either later Thursday night or early in the wee hours of Friday morning. Mandatory evacuations are underway for parts of the Carolinas. CNN meteorologist Allison Chinchar is tracking Florence for us. And Allison, tell me more.

ALLISON CHINCHAR, CNN METEOROLOGIST: Right. So, the concern now is how much more intensification does this storm go through before it finally makes landfall? Right now, it's a very powerful category 4 storm. Winds of 130 miles per hour, gusting to 140 miles per hour. The track still eventually likes to make landfall, somewhere between Virginia and South Carolina. Now, this does not mean these are the only areas that will be impacted. This just basically tells you where the center of circulation is expected to be and the strongest winds. But rain is actually going to be probably the biggest concern with this particular storm. We expect widespread amounts of rain, well over 10 inches. But there could be some locations that could pick up in excess of 20, even 30 inches of rain. The question is, where are those areas going to be? Who is going to get the most rain? That ultimately will be determined on where that landfall location is there.

The point is that all of the models are agreeing that there is going to be a tremendous amount of rain dumped. But that's not the only concern. And I want people to realize, that cone that shows Virginia to South Carolina, that's only for the center of circulation. Everywhere, from Florida all the way up to Massachusetts, is likely to have some type of impact. Whether that's rip currents, strong gusty winds, beach erosion, or even hazardous surf, those are all likely to have, where you see this purple color on this map. So, say if you live in New Jersey or Florida, you still have to understand, you're likely to have tropical storm force winds as this storm make landfall. But this is not the only storm we're keeping an eye on. Believe it or not, we actually have three hurricanes that we've been keeping an eye on over portions of the Atlantic. We also have Helene and Isaac that we'll be keeping a close eye on, Brooke, in the coming days.

BALDWIN: Allison, I know you will, thank you so much. And people certainly are taking heed to these warnings, to be prepared. Stores quickly trying to re-stock supplies like water, groceries, plywood, even gasoline. A Lowe's in North Carolina actually sold out of generators, they're telling us, in about 20 hours. North Carolina has requested federal disaster declarations. And South Carolina just deployed 800 members of the national guard ahead of what is expected to be catastrophic flooding. CNN's Kaylee Hartung is in Wilmington, North Carolina, where I know people have ridden out many a storm. But a category 4 certainly packs a punch.

KAYLEE HARTUNG, CNN CORRESPONDENT: Yes, that's right, Brooke. And so many stores here are having trouble keeping up their stock with the demand for those hurricane necessities. This Lowe's behind me trying to keep their generators in stock as best they can, but they have been the most in-demand item. And many people here, first-time generator buyers, because any of the longtime residents you have here say you have to go back about 20 years for people to remember the kind of preparation that's necessary for this storm that's coming their way. You mentioned people who have been known to ride out storms here, brook. I want to bring in Terry Jackson, a longtime resident here in Wilmington. And Terry, you say you and your wife have made the decision to ride out this storm. Why is that?

TERRY JACKSON, WILMINGTON RESIDENT: Yes, I've been giving it a lot of thought the last couple of days. Yesterday we were coming back from Tennessee, from a mountain trip, and we've been keeping updated with some friends and they were telling us how bad it was getting, so we decided to stop in Raleigh, North Carolina outside of the arena and those grocery stores were jam packed, so that made me think a little bit. So, we got back into Wilmington and we decided, you know, we're just going to ride it out. And I've lived here all my life and I've never going through a hurricane. And today, like you said, today was my first day buying a generator this morning at Lowe's, at 8:30 this morning.

HARTUNG: What else was on that shopping list now that you've made the determination you're going to stay, how are you preparing?

JACKSON: Well, my wife, she went to Bad Bath And Beyond and she bought a fan, you know, a box fan, we got five cases of water, we've got chips, all the canned necessities, batteries, flashlights. We got sure our little pets have got plenty of food and precipitations and all that good stuff. We basically got everything we need. Four bags of ice.

[14:20:00] We're going to wait it out for a couple of days.

HARTUNG: Well, good luck to you and your wife, Terry.

JACKSON: Thank you.

HARTUNG: A safety plan and common sense for many people here they are glad they have time on their side to make those preparations.

BALDWIN: Kaylee, we will be talking to you I am sure over the course of the next couple days and people like Terry he will make that decision to write out this hurricane. Thank you.

As they wait for the hurricane, we are waiting for this White House briefing. 19 days since the last one. The president still not close to a decision on replacing his White House counsel Don McGahn despite the fact he is suggesting he has already picked someone. Hear what he is looking for. And right now, the woman accused of being a Russian spy appears in court after prosecutors are saying they might've gotten it wrong that she offered sex for access to Republicans. What's the real story? Coming up.

[14:25:00] (COMMERCIAL BREAK)

BALDWIN: Well, with White House counsel Don McGahn leaving the west wing shortly, speculation on possible replacements ramping up. But sources are telling CNN that the choice is not imminent, despite President Trump's suggestion that he's already selected a successor. The president recently the announced that McGahn would leave this fall, following Supreme Court Justice nominee Brett Kavanaugh's confirmation. The announcement followed reports that McGahn had given more than 30 hours of interviews to Special Counsel Robert Mueller's team over the course of nine months. So, for more on this guessing game, let's go to Kevin Liptak, our CNN White House producer, and Kevin, any idea on the when and the who?

KEVIN LIPTAK, CNN WHITE HOUSE PRODUCER: Well, Brooke, sources are telling CNN today that it could be several more weeks before a replacement for don McGahn is announced by the White House. Now, of course, as you said, his plan had always been to remain in place until Brett Kavanaugh, the president's Supreme Court nominee is on the bench, or at least confirmed. But really hampering this process from what our sources are telling us is that the president himself has not yet made up his mind on who will replace don McGahn. Now, this is, of course, after the president said he tweeted last month that he was very excited about the person that would take up this post. But what we're hearing is that several people are still under consideration and the president has not picked one name over the other yet.

And now some of these people that are being talked about, one is Emmet Flood. Right now, he is the internal White House lawyer who's focusing on the special counsel investigation. He has a lot of experience. He's known to the president. He actually worked in president bill Clinton's administration, defending the president when there were impeachment proceedings. So, selecting flood would, of course, signal that the president is taking that prospect seriously, if house Democrats -- or if Democrats win back the house in November. Also, on this list, we're learning today, a new name. Brian brooks. He's currently the general council --

BALDWIN: Forgive me, Kevin, let's go straight to the White House. Sarah Sanders.

SARAH SANDERS, WHITE HOUSE PRESS SECRETARY: -- America's economic winning streak under President Trump, evidenced by strong job creation, rising wages, rapid business growth, soaring consumer confidence, and increased manufacturing activity. To go into greater detail on why the American economy is booming, I would like to welcome Kevin Hassett, chairman of the Council of Economic Advisers To the podium to take your questions on this topic. And as always, I'll be back up to answer questions on news of the day. And I apologize in advance for Kevin's really bad calculus jokes. And with that, Kevin.

KEVIN HASSETT, CHAIRMAN, COUNCIL OF ECONOMIC ADVISERS: Thanks. It's really a great pleasure to be back here and thank you, Sarah, for the kind introduction. You know, one of the hypotheses that's been floating around about the economy lately is that the strong economy we're seeing is just a continuation of recent trends. And you know, since we're the nerds at the White House, we decided that this is a testable hypothesis. So, what we can do is go out and estimate recent trends. That is, trends that ran in the economy up to the point of the last election. And then compare the latest data to the recent trends. In most cases, by the way, the estimates of the trends that we present to you here are very statistically significant, as are the deviations from the trend. And so, I'm going to, as I always do, show you a few slides.

Can I have the next slide, please? That's the first slide again. There we go. So, the first slide we're looking at is the small business optimism. And this is basically par parallel construction, you're going to see that each of the slides we go through is going to look a lot like this. And so, the blue part to the left of the slide is what happened from the 2012 election through the 2016 election. And the dotted blue line is the trend that President Trump inherited from the previous president and the red line is what actually happened with the data. So, I think that if you look at this chart, you can see the first thing is small business optimism. The middle chart is the percent reporting now is a good time to expand. The last one is the percent expecting higher real sales in six months. I think if you look at any of those, you would say, geez, that doesn't really look like the continuation of a recent trend.

Can I have the next slide, please? The next chart is something that in my first presser here way back last fall we talked a lot about. It's business investment, which is more than $300 billion over the trend. Again, if you look at the blue line on the left, the first chart is nonresidential fixed investment and the dotted line is the trend and growth rate of that that President Trump inherited. For the middle chart is structures or buildings, and that, as you can see, the dotted line is something that's headed straight down. And the final chart is equipment investment. And that went straight down before President Trump was elected. And I think that if anyone were to assert that the capital spending boom that we're seeing right now was a continuation of the trend that President Trump inherited, then, well, you know, they wouldn't get a high grade in graduate school for that assertion.

The next chart, please? Durable goods orders, capital goods orders, it's a key part of the economy, and it's one of the factors that we look at most closely, because it characterizes basically the good- paying jobs. The jobs that affects normal Americans, blue collar Americans. And the first chart is core capital goods orders and the second chart the core capital goods shipments. And if you look at it, the blue, again, shows a clear downward trajectory in billions of dollars and then that trajectory reversed itself completely when President Trump was elected.