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Tucker Carlson unapologetic after misogynistic audio surfaces, Airlines ground Boeing 737 Max 8 planes after Ethiopia crash, Trump demanding $8.6 billion for border wall in 2020 budget, Aired 10:00- 10:30 ET

Aired March 11, 2019 - 10:00   ET

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


BRIAN STELTER, CHIEF MEDIA CORRESPONDENT: Both trending in Twitter for all the wrong reasons.

[10:00:02]

And as you said, these are the kinds of comments that the President sometimes made. You know, we're back again talking about the Trump- Fox alliance.

And the larger point here, what is the Republican Party, what is the conservative movement, what is the right in America all about. Is it about these misogynistic comments from Tucker Carlson, his hateful comments from Jeanine Pirro? Hopefully not.

JIM SCIUTTO, CNN NEWSROOM: Brian Stelter, thanks very much.

STELTER: Thanks.

SCIUTTO: Good Monday morning to you. I'm Jim Sciutto in Washington. There is breaking news this morning about a plane flown right here in the U.S. and around the world, possibly flown by you this week, pressure building on airlines here in the U.S. to ground this Boeing 737 Max 8 aircraft after a second deadly crash in just five months. Some foreign airlines have already grounded the jet.

Yesterday, 157 people on board an Ethiopian airlines flight that included eight Americans died when the plane crashed shortly just minutes after takeoff.

Right now, investigators are scouring the debris for clues. David McKenzie, he has been on the scene there. This discovery -- okay, we will go to David McKenzie. We have him on the scene to see about the discovery of the black boxes. A Pressing question right now is will the FAA take that step to ground the plane here in the U.S.?

Experts on CNN just a short time ago, making it clear what they would do. Have a listen.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I think the prudent thing to do is to ground these aircrafts. I mean, now that they have discovered the black boxes, we should have an insight into what happened fairly quickly and fast action should be taken.

UNIDENTIFIED FEMALE: Grounding the planes for the week until people can know what is going on and feel more confident. Frankly, I think Boeing should take the lead and Boeing should do it.

UNIDENTIFIED MALE: I have never ever done this before. I have never said that, hey, it's unsafe to fly a particular model of aircraft. But in this case, I'm going to 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.

(END VIDEO CLIP)

SCIUTTO: Those were remarkable comments.

CNN Correspondent Tom Foreman is with me now. I have spoken to David Soucie, [INAUDIBLE] for years. They are very conservative. They all have a history in the industry NTSP, FAA. For them to make that recommendation is remarkable. What is the data that you have been looking into? What does it show us?

TOM FOREMAN, CNN CORRESPONDENT: Well, what the data shows us is that it's very early on. Yes, there were similar behaviors at first blush between these two planes. And to be clear, the issue here that people are concerned about is whether or not there is basically a disagreement in the behavior of the hardware and the software on this plane. There is a safety measure designed in this plane because of the configurations of the engines that will keep it from nosing too high in the air and possibly stalling out and that pulls the nose down. The problem is what if it pulls the nose down when it shouldn't and pilots cannot bring it back up?

So those who think this should be grounded are essentially saying we think there is enough evidence or possible evidence that this is a problem and that the wreck five months ago and this one are somehow connected. Clearly, the Chinese think that, the Indonesians think that, the Ethiopians think that now. Here in the United States, where Southwest, United and I think American also fly these planes. There are dozens of them in the air right now. There are people who will say that is a concern.

There are others though, the Airline Pilots Association thou, is being a little more circumspect. They are saying, look, we have to consider whether or not that is the case. It's early. Let's get some facts first and then move forward.

SCIUTTO: Well, these are -- to it, I don't want to jump to conclusions here, but all the data had been in recent years that the passenger safety had gotten much, much better. There were long stretches between any sort of accident. How unusual is it to have two accidents with the same brand new kind of airplane so close to each other and at the same point in flight?

FOREMAN: It's extremely unusual. I mean, frankly, air accidents are extremely unusual. One of the reasons we noticed this, and this is the countervailing sentiment here, air travel is incredibly safe and continues to become more safe. So when something like this happens, it obviously gets attention.

And when you have this happening, Lion Air, Ethiopian, both crashing, similar fashion, it seems so close together on a brand new aircraft which, by the way, is very popular around the world because it saves a tremendous amount of fuel compared to previous aircrafts. That's why all these airlines are buying this and because they believe it is a safe airline. But when you see this, yes, that's the result, all of a sudden you see all these airlines saying, we are going to ground these planes, countries debating it.

And I think it is a very good question right now as whether or not the FAA will step in and say, why take the chance?

[10:05:04]

Let's go ahead and shut this down now, sort it out and then get to the answer. Others are saying, let's keep moving forward because the safety record has been so strong.

SCIUTTO: Right. Well, I'm sure the debate going on right now in the Boeing boardroom, as well.

FOREMAN: [INAUDIBLE].

SCIUTTO: Tom Foreman, thanks very much. And just to know, you can easily find out what kind of aircrafts your flight is flying. And you can just Google it. We tried it ourselves. There are also websites flight aware and others. If this is a concern for you, look it up. I've done the same for flights I have coming up.

Boeing is taking a major hit from all of this. CNN's Alison Kosik following the markets this morning. How is Boeing stock doing? I mean, this is a company that has 5,000 orders, I believe, for this jet going forward.

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Yes, 5,000 orders, we're talking about, for any airline that has orders and to buy the plane. 350 of those planes have been delivered. This is a new plane. It was just built in 2017. it was responsible for Boeing's success in bringing the stock to record highs. And now, you see Boeing stock taking a huge hit, actually dragging down the Dow.

I know the Dow is down only 40 points. But if Boeing wasn't down this much, 8 percent, you would see the Dow in the green. That's because the Dow is a price weighted index and Boeing is the top, the priciest stock in the index. So it has the oversized sway or power to move the index in one day. This is actually the worst day for Boeing stock since September 13th, 2001. It is one of the worst days for Boeing shares on record.

Southwest Airline shares, we are watching those, as well. They are down a bit. Southwest does operate a fleet of these 737 Max 8 jets. They're only down about 2 percent. American Airlines also uses these jets. We are seeing their shares in the green, though. It is interesting to see how these accidents are going to continue to impact those Boeing shares. Jim?

SCIUTTO: 8 percent down from one stock in a morning. That's a big drop. Alison Kosik, thanks very much.

CNN Business Editor at Large, Richard Quest, joins me now. He knows a thing or two about flying. Tell us, Richard, in your long history covering the airlines how unusual it is to have two planes like this, brand new, so close to each other to have an accident? We don't know the cause, but at such a similar time in the flight and how concerning that should be?

RICHARD QUEST, CNN QUEST MEANS BUSINESS: Well, the difference, of course, between this and, say, the Dreamliner 787 incidents, there, you have a new plane that had problems, the fires kept breaking out. But nobody died and the planes didn't crash. You have to go back to the 1950s and the Comet, which is a British plane. It was the foreigner to the Boeing 707. And British built this jet there first and it kept blowing up and falling out of the sky. In the end, the result was because of pressurization issues.

Now, I'm not suggesting anything similar here. That's just a tight answer to your question. The point being, it is unusual.

And I think -- and I was fascinated to hear your discussion with Tom and asking about this issue of people and the safety of the aircraft and whether people should fly it? It doesn't really matter. The point is that the Chinese, the Indonesians and the Ethiopians, regulators with dozens of those planes in their fleets have decided it's not safe to fly.

So it leaves the FAA and European regulators to a bit of a quandary, because what do you tell the traveling public, Jim? The very people that were just saying, find out what plane you're on, well, the Chinese say it is not safe to fly or they are not sure it is safe to fly. The Americans say, yes, it is. Well, what's the answer, please?

SCIUTTO: So after the Lion Air crash, Boeing responded quickly. They instituted new training sessions for pilots to get over what at least with that incident seemed to be the issue, which is -- and help our viewers understand, I know you're great at putting this in laymen terms, but the pilots in effect fighting the automatic control systems of the plane.

QUEST: With Lion Air, the pilots didn't know what the plane was doing. The plane was doing something on its own, as Tom Foreman was explaining. So the pilots didn't know how to react. Since Lion Air, every 737 Max pilot knows that there is this bit of kit in the plane in a certain circumstances will push the nose down. And if that happens and it's uncommanded or unexplained, switch off the electrics. It's easy to say. It's much more difficult in reality. But that's the point.

So every Max 3 pilot now knows about it, which makes this even more troubling because it's a brand new plane, it's at the same phase of flight. There are certain oscillations in altitude or variations in altitude.

[10:10:05]

There are too many similarities, not to have an abundance of caution. And, Jim, that's the word, that's the phrase I would use. If you adopt a policy of safety first, then you have to say, always sure. Now, the Chinese have said, we are not sure. The Americans and the Europeans are currently saying, we are looking at it. My guess is, by day's end, the Americans and the Europeans are going to have to come out one way or the other.

SCIUTTO: That would be remarkable. Richard Quest, thanks very much. We do have a report on the scene of that crash. We had technical issues getting to him, but we will come back at first opportunity.

Still to come, the new but familiar battle setting up in Washington over President Trump's border wall, he is going to ask Congress again for billions of dollars. The democrats, even some republicans, they are already saying, no way.

Plus, a new CNN poll shows which democrats are leading the 2020 pack in Iowa, and one of them is not even in the race yet. We'll discuss.

A new report says the ex-owner of a spa tied to Robert Kraft's prostitution case arranged for Chinese business people to attend a fundraiser for President Trump, not to mention a selfie there with that owner. We're going to have a lot of report ahead.

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[10:15:00]

[10:15:48:] SCIUTTO: Here in Washington, lawmakers are getting their first look at President Trump's proposed 2020 budget this morning. Will it fly? Amid the cuts in basically every department but defense and deficits projected through 2034, one number stands out above the rest, setting up yet another slowdown -- showdown rather with democrats. The President is asking for $8.6 billion for his border wall. That's even more than he will get this year by declaring a national emergency, which he only did after Congress, of course, refused to give him anywhere near this figure.

CNN's Abby Phillip is at the White House. And so, Abby, the President lost this battle, he lost it in both Houses, including the republican- controlled Senate for less money. He is asking for more in the budget. What's the intention here? I mean, do they expect to get it? Is this about 2020 electioneering? What's going on?

ABBY PHILLIP, CNN WHITE HOUSE CORRESPONDENT: Well, Jim, the budgets are typically for any president, but particularly for this President a statement of priorities. It really tells the Congress and tells the rest of the country what the president wants to do. So it should be no surprise that in the President's budget, he is asking for more wall money.

He hinted at this when he ultimately assigned the deal that he didn't like that came out of the Congress last month. And he said, I'm going to continue to push for this money. So he is doing exactly that. At the same time, this budget is really presenting a picture of what the President wants to do long-term. He wants to balance the budget in about 15 years. But to do that, he has got to cut 5 percent discretionary spending from virtually everything in the federal government except for defense spending.

Now, that will allow him to balance the budget but it could mean steep cuts to basically every other federal agency with the exception of the Department of Defense and with the exception of some slight increases for priorities at the Homeland Security Department for the budget wall.

Now, where this money is coming from, 5 billion of it is going to be money for the customs and border protection, for wall-related activities. But 3.6 billion is going to be a military spending budget that the President is asking for a little bit more money from. But, interestingly, he is also asking for more money to backfill money that he is taking through a national emergency from the military construction budget to build the wall because he didn't get wall funding from Congress in this last budget deal.

So you're seeing some budget maneuvering here from this President. But the two main headlines, budget cuts across the board, increases in military spending, and, of course, that all important wall. But as you pointed out, this budget is unlikely to go anywhere in Congress. Democrats are already rejecting. And even a Republican Congress probably would reject it as well. Congress likes to hold the purse strings here in Washington and they take these budgets under advisement, Jim.

SCIUTTO: Yes. And they do it constitutionally. Abby Phillip, thanks very much.

Let's discuss now with Art Laffer, former Economic Adviser to the Reagan White House. Mr. Laffer, thanks for taking the time this morning.

ART LAFFER, FORMER ECONOMIC ADVISER TO THE REAGAN WHITE HOUSE: Thank you, Jim. It's a pleasure to be with you.

SCIUTTO: So we've got a big deficit. It's getting bigger. CBO agrees, non-partisan CBO. In the CBO judgment, that is part spending, part tax cuts. The President's budget basically just deals with spending. I mean, if the President were serious about reducing the deficit, wouldn't he also have to look again at the big corporate tax cut to get revenues back in line?

LAFFER: Well, I don't know if the corporate tax cut would get revenues back in line. So far, the revenues have been very nice coming from the corporate tax cut and deregulation. We've seen a good bit of revenues coming in. But that's on an accrual basis. The cash flows --

SCIUTTO: The CBO, which, as you know, is bipartisan --

LAFFER: I know CBO. Yes. SCIUTTO: Yes, you do. Just for the sake of our viewers. I know you know it well.

LAFFER: Okay, thank you.

SCIUTTO: I'm just going to read what their 2018 report on the tax said. It says, if lawmakers change current laws to maintain certain policies now in place, preventing a significant increase in individual income taxes in 2026, for example, the result would be even larger increases in debt. They have looked at this. They have looked at the numbers. And they say that this is adding to the deficit.

LAFFER: Yes. I know they're forecasting a huge increase in the deficit because of the tax cuts in 2017. I don't think they are right on that, Jim. But when you look at government, let me, if I just can. I mean, taxes and spending, but we're talking about here the deficits.

[10:20:02]

I mean, all taxes are bad and some are worse than others. What you want to do is collect your taxes in the least damaging fashion and spend the money in the best fashion. And when the damage is done by the last dollar of taxes collected is a little less than the amount spent, you should stop already. That's when spending and taxes should stop.

SCIUTTO: Haven't we learned this lesson already? I mean, let's throw up the data on the screen. Reagan cut taxes. Let's show the graph. Deficits went up. And then even Reagan noticed that and had to raise taxes to get the budget back in line. George H.W. Bush cut taxes. Deficit went up, realized he had to make some tax increases to balance the budget. George W. Bush, same thing. I mean, although he didn't have the -- he didn't take the step for raising taxes to correct it. Haven't we already learned this lesson?

LAFFER: Well, I hope so because when we cut taxes, they didn't start until January 1, 1983, and then we got an enormous growth. Let me just go through, Jim, from January 1st, 1983 to June 30th, 1984. The U.S. economy grew by 12 percent in that period. That's at an 8 percent per annum rate because that's when the tax rate cuts took effect. Now, if you look at this one, Kennedy has --

SCIUTTO: Well, you know the numbers as well as me that that recovery was coming. And The Washington Post has fact-checked this, by the way. It was coming after a deep recession and also deep cuts in interest rates from the highest level they have been in years. So you can't say it was all about the tax cuts. You can't say it's all about the tax cuts.

LAFFER: No, no, I don't. Paul Volcker did a great job. I mean, we all know that. We brought the inflation rate down. When we came into office, the prime interest rate in the U.S. 21.5 percent, mortgages are at 18 percent. We brought that way down because of Paul Volcker. He did just a great job. But the tax cuts and Paul Volcker together created an enormous prosperity that went all the way through Bill Clinton, frankly. It was a long period of great prosperity and I think we're in start of that again.

SCIUTTO: The Republican President saw they had to raise taxes at times in the midst of that to balance the budget. What happened to fiscal conservative republicans?

LAFFER: Well, there is no question you have to have taxes to balance the budget. That's for sure.

SCIUTTO: That rise is what I'm talking about.

LAFFER: But you've got to point your stop. When you've got the highest corporate tax rate in the world, at 35 percent, it makes no sense to double it to 70 percent. You will have no business done here. We dropped it to a little above the middle of the pack, which we should have done. We also did 100 percent expensing. We also got territoriality on our tax code [ph], so we are on an even field with the rest of companies in the world. That's just -- it's just common sense to do that.

SCIUTTO: But you've got to pay for it somehow and we haven't figured out how to pay for it. So that's - I mean, that's it.

LAFFER: Well, we're paying for it via economic growth. Those numbers are coming in fairly nicely so far.

SCIUTTO: But the deficit is still getting bigger. You see the numbers.

LAFFER: Oh, come on. You can't balance the budgets on the backs of the poor and the unemployed. You just can't do it.

SCIUTTO: Art Laffer --

LAFFER: Jim, thank you very much. It was fun.

SCIUTTO: -- let's keep up the debate. I know it's a big one. We'll keep it going. Thanks for coming on.

LAFFER: I'd love it. I'd love it. Thank you.

SCIUTTO: Let's discuss now with Sabrina Siddiqui. She is Politics Reporter for The Guardian. So help me out here. Are there any fiscal conservatives? I mean -- and let's be clear about this. Last year's budget, everybody wanted to spend everything, right? And they traded increased defense spending, a republican priority for increased spending for everything else. So, I mean, the truth is there is a lot of blame to go around for where the deficit is going now, right, politically.

SABRINA SIDDIQUI, POLITICS REPORTER, THE GUARDIAN: Well, there is. Now, obviously, conservatives are reluctant to point out that tax cuts have, in fact, ballooned the deficit according to most analysis that has been done.

SCIUTTO: Yes. I mean, you put up the numbers there and you go back -- you can go back 1,000 years, right, and you won't get them to admit that's what the numbers show.

SIDDIQUI: And I think a lot of concern throughout this process is that democrats have raised is that republicans were going to pass these massive tax cuts, then the deficit would, of course, go up in the way that it has and then they would turn around and blame popular government safety programs, such as Medicare, Medicaid, Social Security and perhaps try to slash those programs.

Now, of course, because democrats have a majority in the House, that's not going to happen. But I think the budget that the White House put out does show that this 5 percent reduction in domestic spending is a signal of their priorities and the President is also complicating things by renewing this fight over the wall. So, ultimately, we'll see what Congress does. They control the power of the purse.

SCIUTTO: What happens then? Because, of course, democrats are not give into broad spending cuts and spending programs that are their priorities. And after all, they control the House. I mean, do we find ourselves pushing up against this debt limit later in the year and then everybody blinks and says, well, I guess we've got to raise the debt limit again. I mean, is that the most likely scenario?

SIDDIQUI: Well, I think you you're going to have yet another showdown as you hit that September 30th deadline, when funding for the government runs out. You're also poised to have a fight over the debt ceiling. The Treasury Department has fallen back on extraordinary measures to give themselves a little bit of wiggle room. But the fact that the President is once again renewing this fight over the wall when he got nothing out of a 35-day shutdown, he got nothing out of a deal that was passed by Congress and instead resorted to a national emergency.

[10:25:09]

I think it's more of a statement of the White House's priorities and the sense that they are going to, in fact, be willing to take on this fight one more time perhaps because the 2020 election is looming, but, ultimately, because Congress passes appropriations bills. The question will be if there is some sort of deal between republicans in the Senate and democrats in the House, what will the President do when that legislation reaches the --

SCIUTTO: Which is what happened last time on the -- when his border wall funding was denied. I mean, the President is clearly calculating here that this fight, kind of an endless fight, in this category works for him with his base, right, whether it's the wall, fighting for the funding or the national emergency declaration.

SIDDIQUI: Well, the wall was the signature promise of the President's campaign. And it's something that he has been able to deliver upon, especially as he looks ahead toward reelection in 2020. And so I think that it does call into question though if he was going to go back to Congress and ask for this funding, why did he have to declare a national emergency. The argument that they're simultaneous to that is that the President does, in fact, have the authority to go around Congress and to authorize funding for the wall. So there are a lot of contradictions inherent here. This is notably coming as the Senate is poised to vote to terminate the President's national emergency, some republicans already breaking from the White House, saying that they will side with democrats. If it does reach his desk, that would be embarrassing for the President. It would signal some sort of defeat. But it's not clear that they're going to get to have a veto-proof majority. So the question over the national emergency and the wall will largely play out in the courts.

SCIUTTO: And he may want to have the veto. He may calculate that to his advantage, as well. Sabrina Siddiqui, thanks very much.

We want to make a clarification, because a few minutes ago, we had a banner on the bottom portion of the screen that said Boeing stock was down 300 points after the deadly crash in Ethiopia. That's incorrect. It's down about 8 percent, closer to 30 points. And we're going to stay on top of that story.

Coming up, despite a crowd of new democrats running for president, a new poll shows that two very familiar faces still lead the pack and by a long shot.

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