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Op-Ed: Republican Tax Cut is "A Big, Fat Failure"; Sexual Assault Suspect: "President Trump Said It Is OK"; Tariffs Test Farmers' Loyalty to Trump; Former Justice Sandra Day O'Connor Diagnosed with Dementia. Aired 2:30-3p ET

Aired October 23, 2018 - 14:30   ET

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


[14:30:00] ERICA HILL, CNN ANCHOR: And while we wait for details, one of my next guests is weighing in on the other plan, saying the Republican tax cut is, quote, "a big, fat failure."

Catherine Rampell is a "Washington Post" columnist and CNN political commentator. Also with us, Mattie Duppler, a senior fellow at the National Taxpayers Union.

Mattie, can the economy handle a tax cut for the middle class?

MATTIE DUPPLER, SENIOR FELLOW, NATIONAL TAXPAYERS UNION: I think the economy can handle a tax cut for the middle class. It will build on a plan that was put forth in December. Remember, the president said before, said repeatedly, the point of tax reform is to deliver to the middle class. There are several things that are in motion now as a result of that tax reform bill. One, the economy doing very well. We're going to see 3 percent growth this year, the first time in 12 years. That helps all taxpayers up and down the income scale. Secondly, the ability of the labor market to continue to tighten to give employment opportunities to Americans on top of the tax relief they've already received. We see taxpayers in the middle-income brackets, between 25 and 15 percent, are lowered to 22 and 12 percent. On top of that, those taxpayers have doubled their standard deduction and doubled their child tax credit. There's a lot of benefit in that tax reform bill that was passed in December that taxpayers are already feeling the effects of.

HILL: One thing that is not a benefit is the effect of the rising deficit. I know you tackled part of this in your piece.

CATHERINE RAMPELL, CNN POLITICAL COMMENTATOR: Yes. If you look at the actual track record of these tax cuts, they have not paid for themselves, despite the fact the Trump administration assured us they would. In fact, the deficit went up 17 percent year over year from 2017 to 2018. That is predominantly because of the cost of these tax cuts. They have not actually delivered for the middle class. Of the ones passed last year, two-thirds of the benefits just in the last year alone went to the top percentile and more of those benefits will go to the very wealthiest Americans.

And beyond that Trump, and Ryan and others proclaim that this would win lots of political goodwill for the Republican Party, and that is flatly not the case. People are not noticing the tax cuts in their paycheck. Even if there's some modest amount given to the middle class, the things that can change your paycheck week to week and month to month will greatly overwhelm what people are receiving. And people correct perceive the benefits are predominantly going to the wealthy and the corporations.

(CROSSTALK)

DUPPLER: I respond to that, Catherine, if you don't mind. The policy report you cite actually says the opposite. It says the benefits do flow to those middle-income taxpayers. All you have to do is look at the actual income bracket versus looking at the relief. It's not --

(CROSSTALK)

RAMPELL: That's not true.

(CROSSTALK)

RAMPELL: If you're talking about as a percent of their income, the very wealthiest get way more money from --

(CROSSTALK)

DUPPLER: Right. But if you're talking about a percent of their after-tax income, that grows for more middle-income taxpayers.

(CROSSTALK)

RAMPELL: That is absolutely false. That's absolutely false.

(CROSSTALK)

DUPPLER: Every single earner, every single income tax bracket is going to see an increase in their after-tax income as a result of --

(CROSSTALK)

RAMPELL: The biggest benefits go to the wealthiest Americans. The biggest benefits go to the wealthiest Americans, both in dollar terms and as a percent of their incomes. If you want to talk about benefits for the middle class, we had tax cuts pass under Obama and George W. Bush that were much more generous to the middle class. There are plenty of things we could be doing, like increase the earned income tax credit or targeting the middle class rather than the people at the top of the income --

(CROSSTALK)

DUPPLER: And I agree with you.

RAMPELL: I do not see any of those things.

DUPPLER: In fact, I agree there's plenty that we could be doing, like making those income tax cuts permanent for the middle class, something that the House of Representatives voted to do in September, with a couple of Democrats. Oddly enough, the Democrats who are now running statewide in Nevada and Arizona are the ones who voted to make those tax cuts permanent. That certainly would change the distribution argument that you're making because they have to expire because of budget rules.

RAMPELL: No. In fact, if you made them permanent, they would still predominantly go to the higher income taxes.

DUPPLER: The income taxes, if you made them permanent, would still predominantly go to higher income earners? Sure.

(CROSSTALK)

RAMPELL: The biggest benefits would still go to the highest earners.

(CROSSTALK)

RAMPELL: A little more benefit for the middle class but still overall the benefits --

DUPPLER: And the middle class --

RAMPELL: -- primarily accrue to the highest earners.

DUPPLER: And the middle class are the ones who benefit most from certainty in the tax brackets and that would be what happens if you are able to make those tax cuts permanent.

(CROSSTALK)

RAMPELL: The highest income classes are the ones that benefit from the lowest rates -- the biggest rates, as well as the biggest loopholes that have been added --

(CROSSTALK)

DUPPLER: That's not true. If you look at --

(CROSSTALK)

RAMPELL: It's absolutely true.

DUPPLER: If you look at state and local tax deductions, 80 percent are people who make over $100,000 a year, that is not middle class.

(CROSSTALK)

RAMPELL: And state and local taxes --

(CROSSTALK)

RAMPELL: The cap on the state level tax deduction was not the only or even the biggest part of the tax bill. The biggest part of the tax bill --

(CROSSTALK) [14:35:10] DUPPLER: You want to argue that's the case.

(CROSSTALK)

DUPPLER: It's certainly not. You have to look at the actual tax law passed --

(CROSSTALK)

RAMPELL: Yes, I'm talking about the overall -- I'm talking about the overall picture of the entire bill. You're cherry picking --

(CROSSTALK)

DUPPLER: It does not. It does not.

(CROSSTALK)

DUPPLER: Viewers can go to taxpolicycenter.org to look it up for yourself if you don't it.

HILL: Ladies, I appreciate you both bringing not only your passionate argument but the facts that back up both of your sides. You both are citing a lot.

DUPPLER: They can look it up at home.

Yes, they can look it up.

Unfortunately, we are out of time.

But thank you both.

DUPPLER: Thank you.

HILL: I can predict this, it is not the last time we will talk about the possibility of middle-class tax cuts.

(CROSSTALK)

HILL: Still to come this hour, a man is now facing a federal sexual assault charge after allegedly groping a fellow passenger. His defense, President Trump said it's OK.

And Turkey's president calling the killing of Journalist Kamal Khashoggi a "ferocious murder," rejecting claims by Saudi Arabia that it was an accident.

(COMMERCIAL BREAK)

[14:40:20] HILL: A Florida man getting into trouble when he allegedly groped the breast of a female passenger sitting in front of him on a recent flight. It happened Sunday on a Southwest Airlines flight from Houston to Albuquerque, New Mexico. The man was arrested, questioned by the FBI. When he was being transported, investigators say the man said, quote, "The president of the United States said it's OK to grab women by their private parts." The man is in federal custody facing a sexual harassment charge.

Joining me now, Rene Marsh, CNN aviation and government regulation correspondent, and Yodit Tewolde, criminal defense attorney and former prosecutor.

Rene, first of all, what do we know about how this unfolded and the specific charges?

RENE MARSH, CNN AVIATION & GOVERNMENT REGULATION CORRESPONDENT: Right, so this man, according to the U.S. attorney's office in New Mexico, he's facing a federal sexual assault charge. He's 49-year-old Bruce Alexander. According to these court documents, Alexander was seated behind this female passenger when he grabbed her breast. At first, she thought perhaps it was an accident, gave him the benefit of the doubt, and then it happened again. She confronted him and the airline did change her seat.

But it was when the FBI arrested this man and cuffed him that he made that comment, that the president of the United States said it's OK to grab women by the private parts. His explanation for why he did this really stands out, referring to the president and that infamous "Access Hollywood" tape where the president talks about grabbing women by their body parts.

A short time ago, Erica, the airline industry is sounding off on this. We received a statement from the president of the Association of Flight Attendants. I'm reading it, in part. It says, "We applaud the flight attendants and pilots at Southwest who took swift action to protect the victim on this flight. However, when the highest authority in the country brags about sexual assault, it is virtually impossible to change a culture of sexual misconduct and contempt for enforcing the laws that should protect victims."

So strong, strong words coming from the Flight Attendants Association.

HILL: Absolutely. That statement very strong.

When you look at this, we are not at this stage left, but if this man wanted to use that as a defense, the president says it's OK, is that a plausible defense?

YODIT TEWOLDE, CRIMINAL DEFENSE ATTORNEY & FORMER PROSECUTOR: Absolutely not, Erica. Welcome to Trump's America where a white man tries to use Trump's words and actions to justify assaulting a woman. Not only is it moronic and frightening, it isn't a legal defense that would up in any court of law.

But I'll say this situation is indicative of an even bigger problem. You have man who has disrespected women for so many years, has been accused of assaulting more than a dozen women, and even admitted to doing so in the "Access Hollywood" tape, and in spite of all that, he's rewarded with the highest office in the land. It sent such a strong message to not only women and white mean but our kids. He's an adult. He wasn't brought up correctly, obviously. But he's an adult who is trying to defend his behavior by saying the president gave him permission essentially to grope a woman. Can you imagine what kind of influence the president is having on our impressionable youth?

HILL: Yodit Tewolde, Rene Marsh, good to have you both with us. Thank you both.

TEWOLDE: Sure. Thanks, Erica.

HILL: Still to come, they were President Trump's most loyal supporters but now the president's trade war is testing loyalty among farmers in a big way.

And just hours before the debate between candidates in Georgia's governor's race, a video surfaces from the 1990s of Democrat Stacey abrams burning a state flag with a Confederate symbol. Her campaign reacts.

(COMMERCIAL BREAK)

[14:48:34] HILL: President Trump's escalating trade wars testing the loyalty of some of his biggest supporters. Farmers in the heartland really helped propel Donald Trump into the White House. Now after the battles with China, with Mexico, with Canada, tariffs are starting to take a bite out of their bottom line.

CNN politics reporter, Dan Merica, has a new story at CNN.com. It's a fascinating look at the details and the anxiety some farmers are feeling. Take a look.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FARMER: China's been a market we've increasingly been sending more citrus to on a regular basis. Any time there's a new tariff, that is going to take 10 percent that we have to find a new home for, which will be very difficult to do.

UNIDENTIFIED FARMER: The concern within the industry if when will these disputes be rectified and concluded, because supply seeks demand. And that will reduce the price. If the overall price per carton goes down, there isn't sufficient revenue, you end up with a red ending year. That's what we're afraid of.

UNIDENTIFIED FARMER: China is going to get the oranges and lemons they want for their country. If we can't do it, someone else will step up and do it.

UNIDENTIFIED FARMER: Being a farmer, producer, it's not a liberal or conservative issue, because there's no way for us to, here at the farm, produce the revenue to respond to it.

UNIDENTIFIED FARMER: If these tariffs continue in place, our family could lose up to $2,000 an acre. I own a hundred acres or something. At $2,000 an acre, you can do the math. No profit. Eventually, as a small family farmer, we perhaps could go out of business. We've had freezes and things like that to kick up in the rear end. We don't need another challenge to set us back.

[14:50:21] UNIDENTIFIED FARMER: I found out about the tariffs through the Iowa pork producers. My initial was this is going to suck.

DAN MERICA, CNN POLITICS REPORTER (voice-over): When President Trump placed tariffs on steel and aluminum, China responded by targeting U.S. products, including pork. And since then, farmers say hog prices have dropped by nearly a third.

UNIDENTIFIED FARMER: No one win as trade war. They don't. It's just a tactic that people use to get some kind of solution to some other issue. And we need a solution.

UNIDENTIFIED FARMER: They put the tariffs where they did to retaliate against Trump. It sucks that I'm losing money but I'd just as soon be me losing the money that be the whole United States for years on end.

UNIDENTIFIED FARMER: I still support him on what he's doing because, in the end, it's the greater good. The only way for to us get this problem really fixed for the next generation is to plunge through it now.

MERICA: The U.S. government is buying a portion of farmers' excess pork. It's short-term relief as formers way for a possible deal.

UNIDENTIFIED FARMER: We want trade. We don't want government aid.

UNIDENTIFIED FARMER: What I worked for, for 33 years, 32 years of farming, it could all be shot in a year, but it is what it is.

(END VIDEOTAPE)

HILL: Joining me now, CNN's Dan Merica, who did that fantastic reporting crisscrossing the country, speaking with farmers, livestock producers.

A couple of things that stood out just in that clip there, you have the gentleman who says farming isn't partisan. And then also we hear from the gentleman who said you have to look at the greater good here. He's looking at the macro as opposed to his own farm and he could really take a hit.

MERICA: There's a lot of people who we spoke with who think this could be good for the country and are willing to take a hit. Kind of an altruistic view of this trade war. But there are a lot of folks that don't have that leeway that some farmers have. Small producers who can't take a $200,000 hit and keep going, they're the ones on the line with this trade war. What it's forcing them to do, most of them voted for the president. You look at a map of where this trade war is impacting, you lay it over a map of where Trump got most votes, it's almost right on top of the same areas.

HILL: It's specific, too. When China fought back and said we are specifically going after areas that we know voted for the president.

MERICA: And these farmers know that. They know that China is savvy. They understand the politics of this. It forcing them to consider, did I make a decision in 2016? Do I punish the president in 2018 by voting maybe not for the Republicans, maybe for a Democrat, not voting at all? What does that mean for 2020. Those are the big questions going forward. It's testing their loyalty. These are folks that think and consider themselves to be tough. They're hardy folks. That's one of the reasons they liked Trump. They see him as tough. That toughness is now being tested. This trade war is seen as a referendum on that toughness.

So what happens going toward? Timing is of the essence for all of this, for prices, for prices, how long they're willing to stick with Trump. Time I s a huge factor when talking to these farmers. Uncertainty is the last thing they want, especially if this lasts a year, two years, three years.

HILL: And the other things they have to deal with on a regular basis, throw in the weather alone.

(CROSSTALK)

HILL: It's a big one.

Dan, fantastic piece. Great reporting.

MERICA: Thank you very much.

HILL: Thank you.

We urge you to check it out at CNN.com.

Sad news today from retired Justice Sandra Day O'Connor who reveals she has been diagnosed with dementia. Her words are next.

Plus, tragic news. We're learning six children died, 12 others are infected with a virus at a rehab in New Jersey. Dr. Sanjay Gupta is standing by. Stay with us.

(COMMERCIAL BREAK)

[14:58:30] HILL: The first woman to sit on the nation's highest court just announced she's been diagnosed with dementia. Retired Supreme Court Justice Sandra Day O'Connor revealing that news in a letter to her high-court colleagues.

CNN's Supreme Court reporter, Ariane De Vogue has more.

(BEGIN VIDEOTAPE)

ARIANE DE VOGUE, CNN SUPREME COURT REPORTER: Erica, in a letter, retired Justice Sandra Day O'Connor said she's been diagnosed with the beginning stages of dementia, probably Alzheimer's disease. She said she's going to stay in Arizona. She wrote a very poignant letter. She said, "While the final chapter of my life with dementia may be trying, nothing has diminished my gratitude and deep appreciation for the countless blessings of my life." And she signed that letter herself.

Keep in mind, it was back in 2981, President Ronald Reagan nominated her to the bench. She was the first female to serve. In 2006, she retired to care for her husband. Both her husband and President Ronald Reagan had the disease of Alzheimer's. She became a very strong advocate to fight for it.

She was a woman who blazed trail. She inspired generations of female lawyers, including the current three women who currently serve on the Supreme Court. Ronald Reagan, when he nominated her, he called her truly a person of all seasons.

Remember, she grew up on the Lazy B Ranch. She always pushed for ideas of self-reliance and independence. On the bench, she served for a long time as a swing vote and she cast key votes such as issues such as abortion and affirmative action.

The court is a very small community. And Chief Justice Roberts released his own statement today. He called her a towering figure in the history of the United States and, indeed, the world -- Erica?

(END VIDEOTAPE)

[15:00:11] HILL: Our Ariane de Vogue with the latest for us there.