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Democrats Defy Trump, Step Up Investigations on Him and His Administration; Nancy Pelosi: Another Shutdown is a "Too Hot to Handle" Issue for GOP; Scandals Engulf Virginia's Top Three Democratic Officials; A New Study Shows E-Cigarette Maker JUUL Triggers Nicotine "Arms Race"; Trump Threatens National Emergency to Build Border Wall; Congress Faces Government Funding Deadline By Next Friday; House Democrats Ramp Up Push to Obtain Trump Tax Returns; U.S. Futures Point Lower Over Global Growth Worries; Interview With Rep. Chuck Fleischmann (R-TN). Aired 9-9:30a ET

Aired February 7, 2019 - 09:00   ET


[09:00:00] MANUEL OLIVER, FATHER OF MURDERED PARKLAND STUDENT: Well, I will keep on doing what I know and use my skills as an artist. Actually on the anniversary we'll be in New York. We are displaying the biggest wall so far. It's going to be the Wall 17. When I say wall I'm talking about the walls that I make. The ones that I paint. The beautiful ones that represent every single victim of gun violence. The ones that are really making a point and being part of the solution. So it's going to be a tough day, but it's just going to be another day without my son. We just try to honor him in an untraditional, effective way to send the right message to the people.

POPPY HARLOW, CNN ANCHOR: Manuel Oliver, words cannot express my grief for you and for all who have lost their children to gun violence. Thank you for being with us today.

OLIVER: Thank you very much.

HARLOW: All right. Let's hand it over now to our colleague Jim Sciutto in "THE NEWSROOM."

JIM SCIUTTO, CNN ANCHOR: A very good Thursday morning to you. I'm Jim Sciutto in Washington.

Democrats call it meaningful oversight. The president is calling it unlimited harassment. Regardless, the fact is Democrats now control key oversight committees in the House and they are using that power to investigate this president like he has not seen before. And so this morning, before the sun came up, before his appearance right now at the National Prayer Breakfast, the president lashed out again.

The Dems and their committees are going nuts, he complained, a continuation of witch hunt. Exclamation point. Less than a day ago the Democratic chairman of the House Intelligence Committee unveiled a sprawling investigation of Trump finances and potential foreign influence. And today, two other House panels are investigating migrant family separations at the Mexico border and the little known process of obtaining the president's tax returns. Tomorrow the acting attorney general, he is due before the House

Judiciary Committee which will have a subpoena with his name on it in case he is not sufficiently forthcoming on his own.

Our guide for all of this is CNN senior congressional correspondent Manu Raju.

Manu, you've got a lot to follow up on the Hill. And I haven't even mentioned a major vote happening today on the Senate side.

MANU RAJU, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Yes, that's right. And the president hasn't either. So far this morning that before the Senate Judiciary Committee met Bill Barr, his pick to be attorney general to replace Matt Whitaker as the acting attorney general. This would be the first time the Senate Judiciary Committee will have a vote to actually consider this nomination after his confirmation hearings from last month. We expect that vote to essentially be along party lines.

Republicans of course are on the majority so that will be sent to the floor. But Democrats have raised significant concerns because Barr both in his confirmation hearings and privately in talking to members has not fully committed to releasing the report that the Special Counsel Robert Mueller will issue at the end of his investigation. He has said that he will issue what was allowed under Justice Department guidelines. He will see what he can release without fully committing that everything will be sent to Congress. Everything will be sent to the public.

And he's also not committed to allowing a subpoena, if necessary, to compel the president to testify. All those questions are what Democrats are raising going forward. But we have not heard Republicans raise those same objections, both the ones that sit on this committee and the ones that are in the full Senate. And so in order for Barr to go down, there would need to be more than three Republican defections on the Senate floor. There is no indication there is even one at this point. So probably by next week the president is likely to get his pick over the Democratic objections that we'll hear today -- Jim.

SCIUTTO: So the acting attorney general, he's got his appearance before the House Judiciary Committee. We understand that he's cramming according to your reporting for that hearing.

RAJU: Yes, that's right. Talking to multiple people throughout the Justice Department, trying to get ready for what will be a very contentious hearing tomorrow before the House Judiciary Committee. Democrats have been very eager to hear about the firing of Jeff Sessions, the conversations that occurred between the president and Matt Whitaker around that and any conversations that Whitaker has had with the special counsel's team, how he's influenced how they are going forward with their own investigation.

That's why this morning the House Judiciary Committee is taking a rather unusual step. The Democrats are going to issue a subpoena to allow Jerry Nadler, the chairman of the committee, to keep it in his back pocket and deliver it Matt Whitaker tomorrow in case he can't answer about those questions that they're going to have and also the question is, Jim, how much can he reveal and will he reveal about his conversations with the president or will he exert executive privilege? We'll just have to see in the coming days here -- Jim.

SCIUTTO: That will be an interesting hearing. Manu Raju, I know you'll be there. Thanks very much.

[09:05:01] Now to those two big hearings the Democrats are holding on Capitol Hill today. Jessica Schneider is covering both of them.

Tell us more what we should expect again because this is the beginning of what's going to be, perhaps characteristic of the next couple of years. I mean, that's some very aggressive House investigations of this president that were held back when Republicans controlled those committees.

JESSICA SCHNEIDER, CNN JUSTICE CORRESPONDENT: Right, Jim. So Democrats are digging in. So first they'll focused on the family separations policy hearing. That will be happening this morning. Of course, the policy it created an uproar as it was happening. And even in recent weeks, a lot more questions and outrage have emerged. So the big focus this morning will likely be that recent revelation from the inspector general that the Trump administration does not know how many children were separated from their parents last year.

The administration, of course, initially said it was almost 3,000 minors. But in that past few weeks with that IG report, it's come to light that there's no exact numbers and that these children weren't adequately tracked. And it's likely that thousands more children were actually separated than initially believed. So Democrats this morning they'll be digging in to find out how this happened. But the problem is they might not get a lot of answers here. And that's because Health and Human Services Secretary Alex Azar he has declined to appear at this hearing.

And Democrats are calling that outrageous and unacceptable. Azar's office, though, countering, saying that he is still willing to work with the committee to provide documents, but there are several people appearing at this hearing. It includes HHS's inspector general's office. They helped prepare this report. Plus people from the ACLU. They have lawsuits, of course, and have been speaking out about the policy from the beginning.

But, you know, Jim, those witnesses, they really might not have the insight that this committee is seeking. That would have come directly from the HHS secretary who is not going to be there this morning -- Jim.

SCIUTTO: All right. To the president's tax returns. I mean, this has been an issue for more than two years going back into the campaign. This tax law hearing set for 2:00 p.m. How long do we expect this to take? I mean, how soon and do they have the power, to our knowledge, to demand the president's tax returns?

SCHNEIDER: So this really seems to be the first step today with this hearing. Democrats really setting up this showdown. And it could be their first step to demanding the president's tax returns. So this afternoon the House Ways and Means Committee, they're really broadly framing this hearing into the importance of, in general, presidents disclosing their tax returns. But it will also focus on this proposed legislation that would require all presidential candidates and the president himself to release 10 years worth of tax returns.

So this is all sort of setting the stage because we know that the chairman of Ways and Means, Richard Neil, he said he does have plans to request and demand President Trump's tax returns directly from the Treasury Department. That of course will set off a court fight.

So really, Jim, this hearing today really laying the groundwork as we get some ethics experts, some tax law experts in there to say just how important it is for the president to release his returns -- Jim.

SCIUTTO: And we should remind people that presidential candidates from both parties going back to the Nixon days have voluntarily done so. So this is truly uncharted territory.

Jessica Schneider, thanks very much.

Democrats are not stopping there. Kara Scannell has more on the House Intelligence Committee chairman's plans to launch another investigation into the president's finances and Russia.

Listen, it's a lot for folks at home as you know, Kara, to keep track of here because you have the tax returns, you got separations at the border. But tell us what's really significant here about what specifically House Intel is looking into.

KARA SCANNELL, CNN WHITE HOUSE CORRESPONDENT: So yesterday, Adam Schiff, the chairman of the House Intel Committee, laid out their agenda saying that they wanted to look at some areas that Robert Mueller is looking at such as the scope and scale of Russia's interference in the 2016 election and beyond. And any links between Russians and Trump and his associates.

But they're also going to take a deeper dive into the foreign influence and any kind of leverage that foreigners beyond Russia -- so including specifically Saudi Arabia -- might have over Donald Trump, his family, his business and any of his associates. So this is really now taking a turn looking at Trump's financials, his business and what kind of interaction there could be between the financial interests that Trump and his business and his family members may have as well as the agenda that he is running in the White House.

So this goes straight to the family business which is, you know, something that in the Mueller investigation Donald Trump has said would be crossing a red line. Congress has a different mandate and this is how they said that they are going to focus, at least part of the Intel Committee's agenda here.

Now Donald Trump yesterday was asked about this and he called it, you know, unlimited presidential harassment. He continued with that today tweeting that again and also saying that the Democrats were going nuts and this was a witch hunt. Adam Schiff, the chairman of the Intel Committee, though, he has said, you know, he can understand why the idea of meaningful oversight terrifies the president.

Several of his close associates are going to jail. Others await trial and criminal investigations continue. This House inquiry will likely stay in the headlines for months to come so the idea of these investigations going away even as the Mueller investigation appears to be wrapping up is just not going to be the case, Jim.

[09:10:09] SCIUTTO: Kara Scannell, we know you're going to be on top of it. Thanks very much.

Let's discuss now in greater detail with Anne Milgram. She's a former New Jersey attorney general, and Molly Ball, national political correspondent for "TIME."

Molly, perhaps I could start with you because I think, again, folks at home, it's hard to keep track of all this stuff, right? Because you have multiple lines of investigation here. Trump's tax returns, family separation at the border, of course you have Whitaker coming to testify. Now Trump's businesses outside even of Russia business ties. Which of these do you think is the potential -- potentially the most dangerous area for the president?

MOLLY BALL, CNN POLITICAL ANALYST: I don't think we know yet. I think that's part of the point of this process is to sort through all of these potential targets. I mean, if people at home think it's hard to keep track of maybe they can take some comfort from the fact that even for the Democrats who control the House it is difficult for them to sort out and prioritize and decide what they want to take the most aggressive tack against.

I think you see them wanting to balance a policy message with an accountability message so trying to talk about things like the family separations or prescription drugs so that people, they hope, don't get the message that all they're doing is going after Trump himself. But we'll see if that message gets through, especially with the president tweeting and taking up so much of the news cycle focused on himself.

But, you know, as Kara was saying, there may have been red lines in the Mueller investigation. Congress doesn't have any red lines. They can go wherever they want.


BALL: And, you know, all the stuff that you listed that's basically just today. There is also multiple scandals related to the cabinet, all those cabinet secretaries who resigned or have had questions raised about their dealings. So I think this is the beginning. We have seen the Democratic Congress sworn in a month ago, took about a month to get up to speed and get everybody on the committees and now they are really starting the work that they have planned to do.

SCIUTTO: Yes. Understood. Listen, it is a lot to keep track of. But, Anne, let's zero in on one. Let's zero in on the president's taxes. I mean, by political tradition this should have been settled years ago, before the president was even elected. Legally, what is your best understanding of the law here? Is it on the Democrats' side here? And, if so, the president can challenge this in court, I imagine, and drag this out.

ANNE MILGRAM, FORMER NEW JERSEY ATTORNEY GENERAL: Right. And that's right. So the first thing, I think, it's -- you know, Congress does have an oversight function. And this is about accountability. Let's put the president and his tax returns I think squarely within the ambit of what Congress would want to know is the fact that he has not totally relinquished ties to his business. And so there is a real question of whether or not the president is benefitting financially right now from his businesses, whether it's a hotel or a golf course.

And so Congress asking for this information is basically saying, look, we need to know where your financial ties are, we need to know if you're beholden to others and we want to know whether you're using the presidency to profit. And so I think Congress has a legitimate legal basis to ask for those tax returns.


MILGRAM: First of all, the administration will absolutely fight it. There is no question about it. And second of all, I think the more interesting question here, I think it's very likely Congress gets the tax returns. But I don't know that the public ever sees them. It's one thing for Congress to say, you know, these are obviously private and sensitive documents, we have a reason we need to see this for oversight. It's a different hurdle I think to basically say the entire American public needs to get access to that information.

SCIUTTO: I mean, you could imagine Democrats in Congress looking at them and discovering business exposure that wasn't publicly known and making an argument or even possibly leaking it, right? I mean, do you think -- you know, politically it's a different issue, is it not, Molly Ball, that someone sitting on the Hill might say, well, you know, folks got to know this?

BALL: Sure. I mean, and you look at polls, a large majority of the American public have believed since the campaign that Trump should release his tax returns and that the public has a right to know what's in them. But, you know, there -- I'm not a lawyer. There is a legal question about whether those returns could be leaked or whether someone could even be prosecuted for leaking them if they were received by Congress.

So I agree with Anne that it's two separate issues whether they get the documents and then whether we ever get to see them. But politically, this has been almost an obsession of Trump's opponents for a really long time because there are so many questions and because he is so dug in on this idea that he refuses to release them and because we've had tantalizing hints over the years, investigations particularly by the "New York Times" that have revealed snippets of what might be in there just in terms of adherence to tax laws and potential tax evasion, not to mention whatever financial ties people suspect they might find. And so, you know, this is the oversight function. It's the gathering

of information and proceeding from there hopefully on a factual basis, not partisan basis to determine, you know, what needs to be done about that.


SCIUTTO: And we should remind, folks, listen, a lot of government employees, when they come into service at much lower positions to the president, they're told to get rid of even individual stocks, right?

So there's not even an appearance of a conflict of interest here. That -- those are the rules that a lot of people have to follow the president to this point does not have to follow those rules. Anne Milgram, Molly Ball, always good to have you on.

BALL: Thank you.

SCIUTTO: Still to come this hour, Speaker Pelosi says that another government shutdown is, quote, "too hot to handle for Republicans." Could they have a deal, both parties within the next 24 hours? Plus, scandal engulfing the top three, that's right, the top three Democratic officials in the Commonwealth of Virginia and now "The Washington Post" is calling for the state's Democratic governor to resign.

And did e-cigarette maker JUUL spark a so-called arms race to make vaping more addicted to teenagers? As already pretty addictive as it is, a shocking new report.


[09:20:00] SCIUTTO: One trillion. Is a shutdown deal just hours away? This morning, Speaker of the House Nancy Pelosi tells "Politico" that the possibility of a second shutdown is, quote, "too hot to handle for Republicans", saying the bipartisan negotiators will come to an agreement before the February 15th deadline, perhaps even in the next 24 hours.

Lawmakers tell Cnn, they want to have an agreement by tomorrow night, but the key question here is, will President Trump be happy with what those Republicans and Democrats you see there, negotiate? Joining me now, Republican Congressman Chuck Fleischmann from Tennessee, he is part of that bipartisan group trying to come to an agreement. Congressman, thanks very much for taking the time this morning.

REP. CHUCK FLEISCHMANN (R), TENNESSEE: Jim, good morning, thank you.

SCIUTTO: So you heard Nancy Pelosi's comment there that another shutdown would be too hot to handle for Republicans. Is it, would it be too hot to handle for you?

FLEISCHMANN: Well, Speaker Pelosi fortunately has changed her tune and her tone. A few days ago, she was just saying no money for this and no money for that, and we weren't going to get there. Fortunately, she has finally decided to let the people in the room, myself, members of the Senate, come together and work our magic.

We're appropriators, we're problem solvers, we're reasonable people. And the committee is making progress. Are we there --


FLEISCHMANN: Yet? No, but are we making progress? Yes. And here's the other good news. If we can come to an agreement, she and the Senate will be able to put something on the floor for all members to vote on. I think that's very important, it's optimistic.

SCIUTTO: Let me -- let me -- let me ask you this because of course it comes down to the barrier and money for the barrier. Have Republicans in that committee, have they set a red line on a figure for wall funding? As you know, $1.3 billion was the offer going in prior to the last shutdown. What is your bottom line?

FLEISCHMANN: Well, that's a flexible situation. Our starting point obviously is the $5.7 billion. You threw out a figure for the Democrats, I still don't know what the Democratic figure is. They have fluctuated a little bit in terms of where they are, and it's just a rather interesting situation.

But I will say this, somewhere in-betwixt and between, perhaps there is an issue. But there are some more important issues on there.

SCIUTTO: So that sounds --

FLEISCHMANN: The Democrats have --

SCIUTTO: And I don't mean to interrupt, it's just --


SCIUTTO: Because as you know, the dollar figure is really the political football here.


SCIUTTO: Sounds like you're saying, there's wiggle room below the $5.7 billion that the president requested, and let's be frank, that the president shutdown was willing to shut down the government for. Are you saying that Republicans are willing to go below that figure?

FLEISCHMANN: I think most Republicans in the room are very reasonable people. And we don't want to let a situation where if we can get close or get a fair deal right now, that we can start or continue actually funding the wall. I was just to the border, we are actually building the wall.

I want the American people to know that. I've been in Texas, I've been in California --


FLEISCHMANN: And I've looked -- we are actually constructing the wall. So, would I like to see $5.7 billion now? Yes. But we're -- we have another appropriation cycle right around the corner once we get past this. So this can be a great continued down payment on the wall. So I don't want to get bogged down on one particular number if it means shutting down the government. We want to keep the government open.

SCIUTTO: That's interesting because the language there -- a down payment could signal that a smaller amount of money might be acceptable and then kind as a first step. But I'm curious, have you gotten any guidance from the White House as to what the president will accept?

Because of course, that has also been something of a football here because he has moved the goal posts. Has the White House given you an indication that they're flexible on $5.7 billion?

FLEISCHMANN: As of yet, no, and I credit the White House and the president. He has let us do our job. And I also credit leader McCarthy, he has also let Republican negotiators in the House do our job. There has not been any pressure, we've had flexibility, we've been able to get in there and work toward an agreement.

And I think that's very important. So I give high marks to everyone for saying, let the appropriators in the room get an agreement and then take it to the floor and see if we can pass both Houses.

SCIUTTO: Are Republicans willing to give Democrats something in return for coming up on the $1.3 billion figure? You know, Washington, compromise is about horse trading here. There have been discussions of permanent protection for DACA, of course, the president offered a temporary protection, that did not satisfy Democrats.

It was kind of made moot by the Supreme Court's decision on that. Are Republicans offering something back to Democrats?

FLEISCHMANN: Well, the Homeland bill is a very large appropriation bill. And I would say, yes, there's tremendous amount of common ground. Let's face it, the Coast Guard is funded. We have Republicans and Democrats who both support and should support the Coast Guard.

So there's flexibility in a lot of areas. One area where I really think is very dangerous is Democrats have tried to reduce the amount of ICE detention beds. And that's as big of a sticking point, I think for a lot of Republicans as funding for the wall.

[09:25:00] If the Democrats were to succeed -- and I don't think they will in getting a lower number of beds at a time that there's a large influx of people, that will also be a nonstarter. So my view is, is there flexibility on both sides? Absolutely. Am I going to be flexible? Sure I will. Because I want to come up with an agreement, obviously, I'd like you to look as much as I would want it to be.

But I'm a conservative Republican, and I realize everyone in that room is not. Everyone in the country is not.


FLEISCHMANN: So let's come together with a comprehensive agreement, the vast majority of people can get behind.

SCIUTTO: Yes, they're like music to the ears of a lot of Americans watching you now. I do want to ask you about another issue, and that is the Republican tax cut which we're about a year into the GOP tax cut plan. And there have been a lot of studies that show the promises made at the time of its passage -- and I know you voted for it --


SCIUTTO: Just haven't borne out. First full year under the new tax law, $1 trillion by U.S. businesses and stock buybacks, that's money that did not go to capital investment or into hiring new people. That's the most ever in a single year.

You have U.S. banks, they shaved $21 billion from their tax bills and during that time, they actually cut workers. I'm just asking you, how do you say to your constituents that this was a tax plan that was fair to them as opposed to those companies and businesses?

FLEISCHMANN: Well, Jim, I've always ascribed to the theory that it's the people's money. And if you remember, our founding fathers didn't give us an income tax, that was changed in our constitution later. And then we have this whole idea, what the Democrats have called Progressive Taxation.

I'd rather see more money in the hands of hardworking Americans and reduce tax rates for everyone. I come from the big states --

SCIUTTO: That's not -- that's not where this money has been going. This money has been going into buying stocks back and going to the banks and other companies' bottom lines.

FLEISCHMANN: Yes, but think about it this way. We have the highest corporate tax rate in the world of developed nations at 35 percent. We could not compete. I wanted to make sure that more companies would come to America and do business in America.

So we had corporate tax relief, but we also put millions and millions of dollars in the hands of hard-working Americans. I'd rather have those dollars in the hands of the American people and not in the hands of Washington bureaucrats any time.

And I come from a state, Jim, Tennessee, which is one of nine states with no state income tax on wages and we are booming. So I will always ascribe to the fact that keep the money in the hands of the hardworking people and out of the hands of government bureaucrats.

SCIUTTO: Congressman Chuck Fleischmann, good to have you on my broadcast --


SCIUTTO: A political crisis in the Commonwealth of Virginia as the state's top three Democratic officials are now embroiled in scandals. What does it mean for the future of the Democratic Party in that state that they hoped to turn reliably blue?

And we're just moments away from the opening bell on Wall Street. The Dow set to -- look at those red arrows, fall at the open, worries about global growth, a big factor in today's potential drop.