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Is Beto O'Rourke Rally Against Trump in El Paso a Sign He'll Run in 2020; Interview with former Ohio GOP Governor John Kasich; Interview with Rep. John Yarmuth (D-KY); Trump & N.Y. Gov. Cuomo to Meet over SALT Tax Caps Cuomo Says Hurts State; Possible Independent Presidential Candidate Howard Schultz to Appear at CNN Town Hall. Aired 11:30-12p ET

Aired February 12, 2019 - 11:30   ET

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


[11:30:00] KATE BOLDUAN, CNN ANCHOR: So was this a preview of the 2020 matchup? What does any of that mean in the face of a deal between Democratic and Republican lawmakers in principle to avoid a shutdown on the wall on the Hill?

Joining me now, Republican governor of Ohio, former presidential candidate, John Kasich. He's now a CNN senior political commentator

Great to see you, Governor.

JOHN KASICH, CNN POLITICAL COMMENTATOR: Kate, I'll tell you what I think is interesting. I'm going to get to your question here. But I'm not surprised. I predicted -- I'm not a great predictor. On "STATE OF THE UNION," I said I believe they would reach agreement and they have. When you put people in a room -- and I have been in those rooms and involved in many negotiations -- that they were able to reach an agreement. The question is, is the president going to sign it? If I were to predict this one, I would say he will sign it and try to move money that is perhaps in the Department of Defense to try to do more for the wall. That is how he will try to nullify who will become critics on the right. It's very interesting they reached agreement. No surprise. Nobody wants to go through another government shutdown.

And then the debate about the wall. Beto, down in Texas, he is a Texas Democrat. He is pretty moderate, pretty smart in the fact that he picks the issues that he thinks resonates with his base. The question for Beto is, what is his lane?

BOLDUAN: And that's --

KASICH: How is he willing to present himself?

BOLDUAN: That's what I wanted to ask you. From what you have seen and what you saw last night, if you were in his shoes and looking at the field that is out there right now, would you jump in?

KASICH: Well, considering the fact that I have run for president, the answer is, what is he comfortable with? Does he have the fundraising base? Maybe. He was running against Ted Cruz in Texas. So the real issue is, can he maintain that fundraising base? Is he unique? What's his lane? In other words, you have a number of people on the left, they're Medicare-for-All, the green plan, all this stuff, and maybe wealth tax or whatever. Where does Beto put himself? Will he compete over there or more in the middle? If you remember, Will Herd, the congressman who borders his district, he did not go out and support the Democrat opponent. That strikes a more moderation. So the question is, can Beto be both a moderate and appeal to progressives at the same time? That is what I'm sure he is asking himself. Is he in for this kind of a campaign? Does his family want to do it? People say, oh, you ought to run for president. You just don't run for president. It's very, very difficult. It takes a lot of time. It is excruciatingly hard. At the same time, it can be a great experience.

BOLDUAN: You have run in a crowded field for the White House before. What do you think? Is that your biggest lesson knowing what you are going to get into?

(CROSSTALK)

BOLDUAN: What is your biggest lesson in how you stand out in that crowded field?

KASICH: For me, what I learned in the campaign -- first, I won my lane. The only person to beat me in New Hampshire was Donald Trump. So that was a pretty good win. When I went on to South Carolina, we didn't get coverage. No one knew who I was in the south. I had very little name I.D. The states were so big I couldn't break through. What I learned in the campaign is this. It's not about this specific policy proposal or some other. It's about the way the people feel about you. And I am convinced, in an era of ever-changing economics, people want to know, do you care about me. That is why it is important that Republicans have answers, real good answers on health care, why they have really good answers on what we are going to do about the growing gap between the rich and the poor? How does this all work out? In the beginning, you have to tell people who you are and they have to like you and you have to have a spark. I think Beto, people like him.

BOLDUAN: Yes.

KASICH: Where does that go once he is out there competing against people who are farther to the left.

BOLDUAN: Looking at Republican ideas, if you will, one name that has been floated out as a potential Republican primary challenger to President Trump is Maryland Governor Larry Hogan, other than yourself. Let me play you what Larry Hogan told Erin Burnett last night.

(BEGIN VIDEO CLIP)

LARRY HOGAN, (R), MARYLAND GOVERNOR: Look, I'm flattered that people are talking about that, Erin. But I haven't, as I've said before, I haven't really given much thought to that at all.

(END VIDEO CLIP) BOLDUAN: It's not a no, as we say. What do you think of Governor Hogan?

KASICH: It wasn't a very good yes, either.

(LAUGHTER)

I haven't really thought about it. You have to think about it. You have to have things in place. Where are your supporters? Who are they? Can you raise the money? What's the primary schedule? How do you compete?

(CROSSTALK)

BOLDUAN: Most important question of the day. Most important question of the day, Governor. I have noticed from Twitter that you have taken up yoga. Has yoga brought you more clarity about your decision, when you told me last time I saw you two weeks ago that all options --

(CROSSTALK)

[11:35:11] KASICH: Everybody is talking about the fact that I'm on Instagram talking about things that are important to me. Yoga was one of them. I'm going to keep at yoga. But posted something the other day. I went with my wife to see the iconic singer, Cher. Popping up in the beginning of a show was her relationship with Sonny Bono. I was very good friends with Sonny. He and I were in Congress together. We hung out a lot together, we laughed. He was a very wise guy in many different ways. I think that the Instagram gives you an opportunity not just to put silly things up there, which sometimes people do. I think what people want to know is, who are you. That is what is exciting about Instagram if you use it in the right way.

BOLDUAN: Now John Kasich, governor and yogi, is one thing we have learned from that.

Great to see you, Governor. We'll see you soon. Thank you.

KASICH: Kate, always good to be with you. Thank you.

BOLDUAN: Thank you. Talk to you soon.

Coming up, lawmakers have reached a deal in principle. Will the president sign onto it? What happens if he doesn't? Next, we will talk to a Democratic chairman about where things stand on the Hill.

(COMMERCIAL BREAK)

[11:40:53] BOLDUAN: We're awaiting word from the White House. President Trump is set to be holding a meeting with his cabinet. That meeting deserves special attention as this could be the first read out that the country and the Congress may get on whether he is willing to accept the deal in principle reached by congressional negotiators and what next steps may be. A deal to avoid get another government shutdown with a deadline approaching at the end of this week.

While we wait for that, what are lawmakers on the Hill saying about this?

Joining me now Democratic Congressman John Yarmuth, from Kentucky, the chairman of the House Budget Committee.

Mr. Chairman, thanks for coming in.

REP. JOHN YARMUTH, (D-KY), CHAIRMAN, HOUSE BUDGET COMMITTEE: Absolutely. Good to be with you, Kate.

BOLDUAN: So they have a deal in principle. What do you think of it?

YARMUTH: I think it is what every compromise should be. It's not everything Democrats wanted. It's not everything Republicans wanted. And not everything the president wanted. It's I think a reasonable compromise done by Republicans and Democrats from both chambers, both the House and Senate. And most importantly, it keeps the government operating, which should be our number-one priority.

BOLDUAN: It's just over a billion dollars for a barrier. One top negotiator said this morning that this is not a wall, these are fences. That was her take on it. But if Republicans or the president are calling it a wall, is that a problem for you?

YARMUTH: We are not going to worry about what the president says, what he calls anything, because you never know what he is going to say. What we know is that what we understand of the agreement in principle, it does provide for some reasonable border security and some reasonable barrier. We never opposed them. We said a concrete wall from sea to the Gulf of Mexico doesn't make any sense. So from what I understand about the agreement, this represents, I think, something that Democrats can live with and that complies with our values and our interest in border security. Trump can call it whatever he wants.

BOLDUAN: Our reporting is that one route that the president might take is sign this to keep the government open but also sign executive action to get more money for the wall. Does this change the deal for you if this is the plan?

YARMUTH: No, because he always had that option. At least I'm hopeful. And it looks like he is not going to resort to declaring a national emergency in order to get this done, which would result in tons of litigation and a lot of controversy. It's even not something Republicans support. I had the opportunity to be with the Mick Mulvaney, the acting chief of staff, over the weekend. He said to us and he said on national television on Sunday that they were going to look for other funding, regardless of what the Congress came up with. So that's what they were going to do. We'll live with whatever they do and then we will fight it out in the political arena.

BOLDUAN: That's a key question. Do you acknowledge that there's not much that Congress can do if the president has found pots of money in the Pentagon budget or the Army Corps budget to put more money to the wall without Congress?

YARMUTH: It is my understanding that there are certain pockets of money that the administration can reprogram. Some of it they just have to notify Congress they are doing. Other pockets they have to request permission from Congress. I think they will take the steps of least resistance first and find the money where they don't have to notify us. We would have -- clearly, there are some things we could not prevent. We have to live with that.

BOLDUAN: Looks like we are seeing the path forward taking shape right now.

I do want to ask you, your fellow Democrat in the House, Ilhan Omar, has now apologized for what she wrote on Twitter about the pro-Israel lobby, the rant anti-Semitic. She said her intentions were never to offend constituents or Jewish-Americans as a whole and she apologizes. You spoke out against Omar yourself. Do you think this apology is enough or do you think she should face other consequences, like stripping of committee assignments as the Republicans have called for?

[11:45:02] YARMUTH: No, I accept her apology. I think she is new to Congress, even though she is not new to politics. There's a way you talk about these issues that is acceptable and there's a way not. In this particular case she crossed the line. It is certainly fair game. I, as a Jewish-American, I do it all the time. I'm very critical of the Israeli government and the Prime Minister Netanyahu. That doesn't make me anti-Semitic any more than it would make her anti-Semitic to criticize the actions of the Israeli government.

(CROSSTALK)

YARMUTH: But when you start questioning motives of organizations like AIPAC, that gets into a gray area where some people will interpret that as reflecting anti-Semitic sentiments. That is where she was on dangerous turf.

BOLDUAN: If you have a quick final thought, today is the beginning of funeral services for the longest-serving member of congressman, John Dingell. You posted a nice tribute I saw on Twitter on him. Your thoughts today as his funeral services begin.

YARMUTH: A wonderful man, a man of great humor, but a man who was committed to the highest standards of public service and did it for a long time. We met on the Michigan/Louisville championship game in 2013. He lost and he came to pay off, which was deli food from Ann Arbor, but he sat with my staff and just regaled us with stories for about an hour and a half. I have very fond memories of John. The country was well served by him. He should be a model for all of us who serve here.

BOLDUAN: Mr. Chairman, thank you so much for coming in. Thank you for sharing your thoughts.

YARMUTH: Thanks, Kate.

BOLDUAN: You are looking live at the funeral services in Michigan. We wish our best to the congressman's family, and Congressman Dingell.

Thank you so much, Mr. Chairman. YARMUTH: Thank you.

BOLDUAN: Coming up for us, New York's Democratic Governor Andrew Cuomo is meeting today with President Trump. What could those two be talking about? It has to do with your taxes.

(COMMERCIAL BREAK)

[11:51:28] BOLDUAN: This afternoon, New York's Democratic Governor Andrew Cuomo was set to meet with President Trump at the White House, and it's all about taxes. The big issue is the state and local tax reduction, lovingly known as SALT. The 2017 tax bill put a cap on those deductions and Cuomo says it has left New York with a massive hole in its budget now.

Let's get more on this now. CNN Business correspondent, Alison Kosik, is here.

Alison, Democrats, blue states say they're unfairly targeted here. Republicans say it's not their fault that taxes are high. Who is right? What is likely to be hammered out at the White House?

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: You nailed both sides perfectly. What are they able to get done? You know how complicated the tax code can be. It's questionable whether they can get anything done. This all stems from the GOP tax bill that President Trump spearheaded. It basically limits the amount of state and local tax you can deduct from your tax bill. And that's hurting taxpayers in states that have higher taxes.

It was one of the more controversial parts of tax reform that was passed in 2017. So this capped how much you could deduct from state and local taxes to just $10,000. Before, the deduction was actually unlimited. I'm laying it out for the SALT change there.

The GOP has justified this by saying this would stop the federal government from subsidizing higher-state taxes and raise revenues to pay for tax cuts that were given to mostly businesses. But lawmakers who are in the high-tax states are complaining this cap disproportionately hurts their residents in New York and New Jersey and California. Here's an example for you. Taxpayers in New York will pay roughly an estimated $14 billion more dollars in federal taxes this year, and that drives big earners to places like Miami to try to escape the SALT tax.

Losing residents, that means is state revenue goes away as well. So New York Governor Cuomo plans to meet with President Trump today to discuss removing the cap, which disproportionately hits those blue states, and it's a criticism that Cuomo and other Democratic lawmakers have had that levied against the tax bill.

(BEGIN VIDEO CLIP)

ANDREW CUOMO, (D), NEW YORK GOVERNOR: What it does is it has created two different tax structures in this country. And it has created a preferential tax structure in Republican states. (END VIDEO CLIP)

KOSIK: Last week, President Trump did tell reporters he's open to revisiting the topic. However, I think the genie is already out of the bottle. Senate Finance Committee Chair Chuck Grassley said the panel would not revisit the deduction cap later this year.

Kate, once you start to try to roll back things, especially when it involves taxes, I say good luck.

BOLDUAN: There's compromise in the air in Washington today, so --

KOSIK: Glass half full

BOLDUAN: Sure. I'm not even going to pretend.

Great to see you. Thank you so much.

KOSIK: Thank you.

[11:54:18] BOLDUAN: We'll be right back.

(COMMERCIAL BREAK)

BOLDUAN: Tonight, on CNN, a presidential town hall, live from Houston, with former Starbuck's CEO and possible incoming presidential candidate, Howard Schultz. Schultz hasn't jumped into the race just yet but Democrats are already raising the alarm that, in their view, an Independent running this time would ensure another term for President Trump. Can Democrats win him over tonight?

Live from the debate all is CNN Business correspondent, Vanessa Yurkevich, joining me right now.

Great to see you, Vanessa.

So Schultz is likely to face some tough questions tonight. What should folks expect?

VANESSA YURKEVICH, CNN BUSINESS CORRESPONDENT: Definitely. This is going to be an opportunity for Howard Schultz to road-test some of his potential policies. We know that, in the past, he's basically just said what he agrees with Democrats and Republicans on and what he disagrees with them on, but nothing concrete from himself. So we're expecting him to tackle topics, like immigration, gun control, health care. And most of those questions will be coming from voters in the audience.

And one way he's really been able to connect with voters is telling his story of when he was born in Brooklyn, lived in public housing, and had working class parents. And he's hoping that tonight he'll be able to talk a little bit more about that message and, hopefully, connect with some voters in the audience and viewers at home -- Kate?

BOLDUAN: A tall order but he has a big opportunity tonight.

Vanessa, great to see you. Thank you so much.

[12:00:03] Do not forget, folks, tonight a special CNN presidential town hall with Howard Schultz in Houston.