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Trump Demands $8.6 Billion for Border Wall in 2020 Budget; Trump's Budget Calls for 5 Percent Reduction in Domestic Spending; Trump Maintains Strong Approval Rating Among Republicans in New Poll; Markets Mixed Over Concerns of Global Growth; Boeing Faces Safety Questions After Second 737 Crash in 5 Months; Trump Demanding $8.6 Billion for Border Wall in 2020 Budget. Aired 9-9:30a ET

Aired March 11, 2019 - 09:00   ET

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

[09:00:00] JIM SCIUTTO, CNN ANCHOR: Pressure mounting this morning for the U.S. to ground all Boeing 737 Max 8 aircraft. This after a second deadly crash in just five months. Countries around the world already grounding this plane. 157 people on board, the Ethiopian Airways flight, including eight Americans. Investigators and crew scouring the debris today.

David McKenzie joins us now from the site of that crash there.

David, crews on the scene. They recovered those crucial flight data recorder and cockpit voice recorders this morning. What are you learning about the investigation? Because the real key question here are similar crashes in a short period of time in those early minutes of flight. What do we know at this point?

DAVID MCKENZIE, CNN CORRESPONDENT: Well, what we know is that this troubling crash, just tragic incident. Behind me you can see those big diggers, Jim. They are separating parts of the engine of this what was a brand-new Boeing from parts of the fuselage. There's also been the very tragic moments of bringing out the remains of those lost on this flight. And there have been officials from the U.S., other countries and, of course, Ethiopian Airlines on the scene on this hillside in Ethiopia.

Just moments ago, I spoke to a witness who said he was tending his sheep. He's a shepherd. This is a very rural area of Ethiopia, when he heard the noise of -- it seemed unusual, of a plane coming over. He said when he came out to look, there were flames as he put it towards the tail side of the plain. Relatively soon after that, it smashed into the hillside creating a crater, Jim, that's about as big as two basketball fields.

This is just a horrendous, catastrophic impact into the hillside. No survivors. Earlier, we spoke to the U.S. ambassador who was here on the scene. Take a listen.

(BEGIN VIDEO CLIP)

MICHAEL RAYNOR, U.S. AMBASSADOR TO ETHIOPIA: Eight Americans showing the diversity of our country and showing, as you say, great interest in Africa. People who either lived here or were here to work and to contribute to the development of this continent. Eight inspiring lives and eight true tragedies and our heart goes out to everyone who was impacted by their deaths.

(END VIDEO CLIP)

MCKENZIE: Well, Jim, the ambassador said that the investigators are on their way here. They'll be here overnight. He also said that Interpol is working with U.S. and Ethiopian authorities to try and identify the remains of those lost in the terrible incident.

SCIUTTO: David McKenzie there right at the scene of that crash as only CNN can do it.

I want to bring in now David Soucie, CNN safety analyst. Also a former FAA inspector. He's also author of "Malaysian Airlines Flight 370: Why It Disappeared and Why It's Only a Matter of Time Before It Happens Again."

David, tough question for you this morning. You used to be with the FAA. You have a number of countries around the world who have grounded this aircraft. Should the FAA follow suit here in this country and ground the 737 Max?

DAVID SOUCIE, CNN SAFETY ANALYST: If I was in that position at this point, there's not enough information to tell us that it's not that so to be cautious I would definitely do that in the FAA.

SCIUTTO: OK. That would be quite a step. Let me ask you this as well because I've got a flight with my family coming up. I found myself this morning, like I think a lot of Americans, looking at those Web sites where it shows you what the equipment is for that flight. Should Americans be concerned about whether it's safe to fly on this plane right now?

SOUCIE: You know, Jim, I've never, ever done this before. I've never said that, hey, it's unsafe to fly a particular model of aircraft, but in this case, I mean, I have to go there. I just looked at the flight data off of that aircraft. It's strikingly similar. Same issues that Lion Air had with the Max Air. So yes, I would watch for that airplane. I'm so sorry to say that, but --

SCIUTTO: It's quite remarkable in my experience with you, David, talking to you through the years. I know that you did not -- you go out of your way to be conservative in the recommendations you make.

Speak for a moment so folks at home understand because I've read a little about this and what seemed to happen in Lion Air, and again it's early with the Ethiopian Airways crash, although it was in a similar time period of flight, is that you have the pilots literally fighting, it seemed, the automatic control systems on the plane.

Can you explain in layman's terms what we know about the first crash five months ago and what those circumstances would be like?

SOUCIE: Jim, it's really a complex issue. I'll do the best I can. But basically what happened is with this Max Air airplane, the reason it changed is because they moved the engines a little bit more forward than the wing is slightly different than it is on previous 737s. Because of that, they took a precautionary measure to have an automated system that because -- with that configuration, the nose tends to go up.

[09:05:01] So they put in a system in there that when that happens it would automatically push the nose down. So this -- this is what happened in Lion Air. We don't know again whether this what happened in this aircraft yet or not. However, what this does is when the autopilot is turned off, even with it off, the system still pushes the nose down. If it thinks that the nose is going up uncommanded.

So if there's a failure in the angle of attack indicator which tells the airplane whether it's climbing or not, if there's a failure in that system, then this system is precautionary measure system will push the nose down. So the pilot is literally fighting against something and he may not even be aware. He'll turn the autopilot off and not believe, not understand that it's another system that he needs to turn off to avoid this so they'll keep fighting it thinking it's an aerodynamic error on the airplane or something.

SCIUTTO: That's very interesting.

SOUCIE: Something wrong physically with the aircraft.

SCIUTTO: Even if he turns off the autopilot, there's another system that might still be overriding the pilot's moves. I understand that after the Lion Air crash that Boeing held classes in effect, special training sessions for pilots so that they could be -- they could better understand the systems on this plane.

Do we know how extensive they were and would we know if, for instance, the pilots on this most recent plane had been given extra training for this aircraft?

SOUCIE: I am sure that they did. I mean, this was a big deal. I'm sure you recall, Boeing reacted very quickly, which was unprecedented, really. They didn't wait for the FAA or any other regulatory body to tell them what to do. They did it. They realized that there was an issue and they addressed it quickly.

That's why I am really hesitant to say that this is the same problem with this airplane because they took extreme measures to try to prevent it from happening. So that's where I've got a little bit of confusion right now is why did this happen again, if it was, indeed, this same problem.

SCIUTTO: Right. But we heard your message there loud and clear that the FAA, in your view, needs to take a step and ground these planes now until we know more.

David Soucie, former FAA staffer, thanks very much for joining us this morning.

The other news this morning, it is a month late, hundreds of millions of dollars short and even though it has no chance of becoming a reality, it is sure to set off another battle between President Trump and Congress.

It is the president's budget plan for 2020, which arrived on Capitol Hill within the last hour. Those are the pictures there. Those big, thick books. Delayed because of that government shutdown. And utterly dismissed by Democrats. And this is crucial. Even by some Republicans.

Here's the first of many nonstarters for Democrats. $8.6 billion for President Trump's desired wall. Plus, on top of that, reimbursement of the military construction funds that the president is commandeering with his emergency decree.

CNN's Alison Kosik joins me now to break it all down.

So let's look at these numbers here. Big picture for folks at home following this. There's obviously that big number requested money for the border wall. What else is in the president's budget?

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: OK. So let me start off with the other stuff. So President Trump's new budget is overall setting up a new battle over the border. What he is promising to do is balance the federal budget in 15 years by slashing spending for education, for health, the environment and other nondefense items.

The proposal which rolls out this morning, it amounts to a total of $2.7 trillion in spending cuts. So the president is going to be looking to reduce spending by 5 percent across federal agencies, except for Defense spending.

So what this budget essentially does, Jim, is it pushes down spending in some areas like the EPA and it looks to increase funding in other areas that align with the president's priorities. The administration will invest more than $80 billion for veterans' services and increase resources to fight the opioid epidemic.

High on the president's agenda, he will try to get $8.6 billion for a border wall and so broken down, as you showed, it's a reimbursement of $3.6 billion in military construction funds that he hopes will be spent this year. This is coming from that declaration of a national emergency. And it also includes the $5 billion for Customs and Border Protection.

Now once this budget comes out, I'm going to give you a pretty good roadmap now of what's going to happen here according to analyst Greg Valliere. Both parties will exploit this morning's new budget with Democrats blasting deep domestic spending cuts and Republicans calling for a huge Defense spending hike which partly goes to fund the border wall.

Here's the thing with this. The timing of actually working out this budget could present a perfect storm. The debate on spending and budget caps will also intertwine this fall with negotiations to raise the debt ceiling. Here's a reminder for you, on March 2nd, we hit the $22 trillion debt

ceiling or the federal borrowing limit that Congress sets. The Treasury Department is actually in the middle of using what's known as extraordinary measures to continue to pay the country's bills. So get ready, come September, you are going to probably see the debate continue right up until the wire.

I bet we have a countdown clock on CNN. This is as a debt ceiling crisis starts to really bubble up because everybody, Jim, is just going to kick the can down the road -- Jim.

[09:10:07] SCIUTTO: Yes, that's the one consistency when those deadlines come. In the end, they agree, let's raise the debt ceiling.

KOSIK: Right.

SCIUTTO: Alison Kosik, we'll be watching. Thanks very much.

KOSIK: OK.

SCIUTTO: This budget from the president setting the table for another clash with Congress. What are lawmakers saying about it this morning?

Plus, on the same week Republicans are set to rebuke the president's national emergency, a new poll of Iowa Republicans show that 63 percent say it was the right thing to do. And this --

Live on the ground there as U.S.-backed forces fight to take over the terror group's last stronghold. We're going to take you there.

(COMMERCIAL BREAK)

SCIUTTO: This morning, President Trump has picked a brand-new fight with Congress over government spending in general and the wall in particular.

CNN's Manu Raju is on Capitol Hill.

Manu, the government shutdown over far less than $2 billion in spending for the wall. Any appetite for the more than $8 billion that the President is now asking for.

[09:15:00]

MANU RAJU, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Certainly not from Democrats who now control the House. Of course, they're making it very clear that this budget proposal is dead on arrival. House Speaker Nancy Pelosi is on with the Democratic leader in the Senate, Chuck Schumer making it clear that the president's demands will not pass muster with Democrats, and the president will have to back down from his approach as he did during the fight that led to the government shutdown earlier this year.

The president ultimately agreeing to move forward and not getting a dollar for his wall, and later making that emergency declaration to try to move money around the federal government, administratively around Congress to get money for his wall.

But going through Congress for this more than $8 billion is not going to happen. This is what Nancy Pelosi and Chuck Schumer said President Trump hurt millions of Americans and caused widespread chaos when he recklessly shut down the government to try to get his expensive and ineffective wall which he promised would be paid for by Mexico.

"Congress refused to fund his wall and he was forced to admit defeat and reopen the government, the same thing will repeat itself if he tries this again. And we hope, he learned his lesson." Now, one of the things the Democrats are particularly concerned about from this budget proposal is also the call to decrease domestic funding that's not related to defense by 5 percent and increased defense spending.

That is something also the Democrats will not accept. And these budget proposals ultimately blueprints sets the stage for fights later on during this budget process. So expect this fight to intensify later this Fall as we get close to that fiscal deadline.

And ultimately, Jim, the question is for the president, will he demand the money? Will he dig in again and will that lead to another government shutdown? And this week, we may see -- we'll see the Senate take a bipartisan vote to rebuke him on that emergency declaration vote, they're going to vote to pull back that measure the president will veto that disapproval resolution.

But nevertheless, bipartisan concern about what he's doing administratively and Democrats are making it clear, this budget proposal is not going anywhere.

SCIUTTO: Yes --

RAJU: Jim --

SCIUTTO: So much -- so much of this about 2020 election nearing. No question, Manu Raju, thanks very much. Let's discuss now with Rana Foroohar; global business columnist and associate editor for the "Financial Times", and Douglas Holtz-Eakin; he's the former director of the Congressional Budget Office here.

So you've got a big deficit, we know that, but you also have a lot of spending and there's a lot of -- the president now as many predicted, you know, looking for cuts and spending as opposed to any change in those tax cuts. Rana, just looking purely at the numbers, what's the problem here? Is it more the tax cuts or is it increased spending in the most recent budget cycle?

RANA FOROOHAR, GLOBAL BUSINESS COLUMNIST & ASSOCIATE EDITOR, FINANCIAL TIMES: Well, you know, when I look at this budget, I see a budget that really isn't very conservative. I mean, you can understand why Democrats don't like it. He's talking about increasing military spending, cutting back on domestic spending which is frankly, exactly what you need right now to boost domestic growth.

But he's also not really addressing the debt and deficit issues in the way that he had promised. If you remember, President Trump had said that he was going to solve the entire debt and deficit problem in his -- during his presidency. He's now saying, all right, we can balance the budget 15 years out, but only by shifting that increase in military spending into this separate slush fund.

By the way, military spending at a time we're actually pulling back from two overseas wars and spending money on a wall for frankly, a manufactured immigration crisis when there's so much productive spending that could be done at home, I think isn't going to get you the growth that you need to actually balance the budget in general.

SCIUTTO: Douglas, the Democrats are noting in particular the effects of the president's tax cut -- president and Republican Congress' tax cut, noting that it added nearly $2 trillion to deficits, I believe that over ten years. And that's CBO number, right?

DOUGLAS HOLTZ-EAKIN, FORMER DIRECTOR, CONGRESSIONAL BUDGET OFFICE: Yes --

SCIUTTO: I mean, those are CBO numbers there, it's a nonpartisan, you worked for the CBO. Are they right to say that the tax cut is responsible for the lion's share of the increase in deficit?

EAKIN: They're correct to identify that as the increase in deficit, but it's not the biggest part of our problem. When --

SCIUTTO: Right --

EAKIN: President Trump came into office, we had $10 trillion in deficits on the books, that's largely the explosion of entitlement spending with the retirement of the baby boom. The tax cuts certainly made that worse. I think looking forward, anybody who looks at the numbers carefully knows that we're going to need three things.

We're going to need very good economic growth, the president is counting on that. We're going to need reductions in spending, but not just the annual discretionary spending. We need to take on --

SCIUTTO: Yes --

HOLTZ-EAKIN: The entitlement spending and we're going to need more revenue. No one wants to talk about any of those three things.

SCIUTTO: Yes --

HOLTZ-EAKIN: This is a budget that's silent on the big issues.

SCIUTTO: Yes, no question, I mean, that's --

FOROOHAR: Yes --

SCIUTTO: All the adults in Washington say we've got to get around the table and do that, but of course they don't get around the table because no one wants to tell their supporters, right --

FOROOHAR: That there's adults in Washington?

[09:20:00] SCIUTTO: That they have to get anything --

SCIUTTO: Yes, I mean I've given up --

FOROOHAR: Well, no, I think --

SCIUTTO: I've given up.

FOROOHAR: I think Douglas is making a very important point. You ultimately need growth to balance -- to balance budgets. So I mean, that's what --

SCIUTTO: Right --

FOROOHAR: That was the magic of the Clinton period, right? You know, you've got the deficit down by growing. How do you grow, particularly at the end of an economic cycle? I mean, recovery cycles tend to last about a decade. We are over ten years into this one.

Now, the Trump administration will say, hey, we said we were going to get higher growth last year and we did, they still didn't meet their target. That was because of the suckering -- sort of sugar high of this tax cut which is now petered out. So this year and certainly into next year, 2020, most economists feel we're going to be heading towards recession.

SCIUTTO: Now, on the spending side, the most recent budget, I mean, just lay it out, it traded increases in defense spending, a Republican priority for increases in other spending programs that were more Democratic --

HOLTZ-EAKIN: Sure --

SCIUTTO: Priorities there. I mean, isn't it safe to say, Douglas, that there's a lot of blame to go around because the easiest thing to do in Washington is to spend money, right? Not to find money to cover that spending.

HOLTZ-EAKIN: Yes, it's very easy to agree to spend money. And what they did in 2018 was just agree to spend more on defense and on non- defense discretionary. But what they didn't do in 2018, which they did twice under President Obama was pay for that increase in spending with cuts elsewhere.

That was missing in 2018. What I find disappointing about this budget is that there were only two things that matter in 2019. One is raising the debt limit, number two is finding some agreement on how to avoid these budget caps that they wrote into law years ago. The budget is going to be silent on both of those.

SCIUTTO: And how about debt ceiling, Rana, I mean, do you see -- because again, we run into this all the time and then there's --

FOROOHAR: Yes --

SCIUTTO: Concerns about the U.S. debt rating and so on as they push it up to that deadline there. I mean, is this -- FOROOHAR: Yes --

SCIUTTO: Is this going to be -- is this going to be a real issue as you get close to that deadline?

FOROOHAR: You know, I think that -- I guess I differ a little bit from a lot of liberals on this point. I think debt and deficits do matter, and I think that they matter more than ever now. I mean, we're in an unprecedented global debt bubble --

SCIUTTO: Yes --

FOROOHAR: At the moment. There is -- there's --

SCIUTTO: Yes --

FOROOHAR: You know, multiple times the amount of debt out there in the world than there was ten years ago before the financial crisis. So I think that we are really in a point where we need to start thinking about the U.S. debt and deficit issues.

You're already seeing in the U.S. trade war with China, you're seeing talk about, well, there could be a currency war at some point, too. So this is not a time to be racking up more and more debt when we're going probably into a downturn, and when interest rates, it's unclear what's going to happen, it could get a lot more expensive to pay that debt off at some point.

SCIUTTO: Douglas, I mean, you also have the trade deficit --

HOLTZ-EAKIN: I think that's a really important point --

SCIUTTO: At the same time period, but please, go ahead, tell me -- tell me -- tell me your reaction to Rana.

HOLTZ-EAKIN: Look, I think this is a really important point. Our trade deficit and our budget deficit are related. Getting the budget deficit under control will help with the trade deficit, there's no question about it. But the issue with the debt is that things are always fine until they're not.

And you cannot predict the moment at which things get rough. So don't run that risk. Develop a sensible plan that gets the debt stabilized.

SCIUTTO: Yes --

HOLTZ-EAKIN: A sensible plan takes on the large majority of spending which is over in the entitlement programs. It doesn't rely on one category of annual spending which is going to be under 10 percent of the budget in the end. This is a really --

SCIUTTO: Yes --

HOLTZ-EAKIN: Narrow category to focus on, it's picking a political fight. I understand that, but it's not a sensible long-run strategy. SCIUTTO: Yes, and then tell me any time human beings have actually

taken preemptive action rather than wait until the sky fell. Any examples before we go.

FOROOHAR: Never waste a good crisis.

SCIUTTO: Just saying, Rana, Douglas, thanks very much.

FOROOHAR: Thank you.

SCIUTTO: New polling out this morning. While most Republicans agree that President Trump is still their guy in 2020, there is a dilemma among Democrats, the candidate they most want to beat the president has not yet even ran into the race.

And we are moments away from the opening bell on Wall Street. The markets mixed this morning, U.S. retail sales stabilized in January, but investigators worry about global growth from China, Europe and the effects of Brexit.

[09:25:00] (COMMERCIAL BREAK)

SCIUTTO: New polling out today from the first contest of the 2020 election. That of course, Iowa, and for Republicans, President Trump still their man heading into 2020. The president holding 81 percent approval among Republicans just despite an onslaught of new investigations into his presidency, a failed North Korea Summit and a very public airing of his alleged porn star payoff.

Joining me now to discuss this, CNN senior political writer and analyst Harry Enten and former senior adviser for Trump's 2016 campaign, David Urban. Thanks to both of you, good to have you on together. Harry, if I could use your polling --

DAVID URBAN, FORMER ADVISER FOR DONALD TRUMP'S 2016 CAMPAIGN: Thanks for having me, Jim --

SCIUTTO: Wisdom here, just for a moment here, 81 percent, I mean, that figure for Trump has remained fairly consistent among Republicans, has it not?

HARRY ENTEN, CNN SENIOR POLITICAL WRITER & ANALYST: It has, in fact, his favorable rating which is a slightly different question is actually slightly up. I mean, these are not the types of numbers in which you would expect there to be a serious challenger to the president. He's well liked by Republicans.

Different polls that look at the horse race numbers clearly show that he is the favorite heading into 2020. If Donald Trump is going to be beat or be in the general election, not in the primary at least as the polling looks at this point.

SCIUTTO: Dave Urban, a number in that poll said that 40 percent of folks identifying as Republican or Republican-leaning voters do support the president facing a challenger, however, do you consider that at all concerning? URBAN: No, so first of all, and Harry will speak to this, too. This

is -- this is -- these are registered Republicans, not likely voters. We don't know if these folks are super voters, we don't know if they come to the polls. And look, it's Iowa. Folks in Iowa are used to seeing, you know, their candidates nine, ten times in their -- in their local diners.

They are very intimately involved --

SCIUTTO: Yes --

URBAN: With this process.

END