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Interview with former Ohio Gov. John Kasich on 2020 Budget, Green New Deal; Overnight Air Strikes in Syria to Push Out Remaining ISIS Forces; United Kingdom Grounds its Boeing MAX Airplanes Following Ethiopian Airlines Crash; Paul Manafort to Face Second Sentencing Hearing Tomorrow; Dozens of Federal Arrests Today for College Entrance Exams Racketeering. Aired 10:30-11a ET

Aired March 12, 2019 - 10:30   ET

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


JIM SCIUTTO, CNN ANCHOR, NEWSROOM: A day after President Trump sent his 2020 budget blueprint to Congress, his budget chief is defending it. It's a harder sell this year since Democrats now control the House, including the crucial House Budget Committee. And there is a lot in the new Trump budget for Dems not to like, even some Republicans.

Joining me now with his thoughts on the budget and this week's Senate vote on the president's national emergency, is John Kasich. He's a former member of Congress. Also Ohio governor, now a CNN senior political commentator.

Governor, always good to have you on.

JOHN KASICH, CNN SENIOR POLITICAL COMMENTATOR: Hi, Jim, how are you?

SCIUTTO: So as you well remember, when he was campaigning against you in 2016, then-Candidate Trump, he promised to eliminate not just the deficit but the entire national debt. This budget will add to it.

He also promised to protect Medicare. This budget will cut Medicare. Did the president lie during the campaign?

KASICH: Well, I don't use terms like that. But here's what I will tell you, Jim. He said he was going to balance the budget by getting rid of waste, fraud and abuse. You remember that?

And the budget now, of course (ph) the debt is skyrocketing. And we're going to get to the point where the interest on the national debt could even be greater than the amount of money we spend on defense.

There's no interest, no inclination by either party to be concerned about this growing debt. In fact, some people in the country say, "Well, it doesn't matter."

That's like saying you can hand a credit card to your spouse or you yourself, and you go out and you spend and you have no way to pay it -- you know, you're ringing up all these bills. And you know what? We live in grade (ph) here. But at some point, the bills come due. Then if you can't pay it, you've got to pay sky-high interest.

That's what we face. In fact, governments, the Chinese, owning more and more and more of the debt of the United States. This is just a terrible, crazy thing that our kids are going to be bitter about someday, when they figure out they're paying for our party today.

SCIUTTO: Let me ask you this. You know how well the health care message did for Democrats in the midterms. Voters, particularly in swing districts --

KASICH: Yes.

SCIUTTO: -- they want more affordable health care. You have a president in this budget, cutting Medicare. Very popular program. Is this, in your view, a gift to Democrats in the 2020 election?

KASICH: Well, I don't know what the details on the Medicare changes are, Jim. But I bet they're just very, very minor. And the fact of the matter is, there are ways to improve Medicare and extend its life.

Because if we keep just running down this road, at some point, we're not going to -- we're going to end up having to either charge more, or we're going to have to cut back services.

I mean, Medicare needs to be put on a more solid footing. And there are ways to do it, just like what we did, out here on Medicaid, to be able to improve the system, reduce its cost and provide better care. The same can be done on Medicare, but you have to be creative.

Here's the problem, Jim. There's no interest in that town. Nobody wants to talk about this.

SCIUTTO: Yes.

KASICH: They're not interested in this subject. And frankly, to some degree, it's not very sexy --

SCIUTTO: Yes.

KASICH: -- until the economy starts to plummet, and then all of a sudden, they're like (ph) --

(CROSSTALK)

SCIUTTO: Absolutely.

KASICH: -- "Why didn't we do something?"

SCIUTTO: Yes. No party likes to cut spending. I want to ask you, because there's a key vote this week on the president's national emergency declaration. You wrote in a column just out this morning, that "senators will have the opportunity to demonstrate their love of country and their commitment to constitutional values by voting for the resolution to disapprove of the president's emergency declaration." TEXT: "Republican senators will have the opportunity to demonstrate their love of country and their commitment to constitutional values by voting for the resolution to disapprove the president's emergency declaration."

SCIUTTO: I want to ask you this. As you know, the president's putting enormous pressure on Republicans to not defy the president here. By voting to support this declaration, are they choosing the president over their country, in effect?

KASICH: Well, if -- I mean, look. Pressure, what does -- pressure is a woman, you know, a single mom, trying to feed a couple kids. Not these senators who are sitting over there, in the lap of luxury, and they live high and all those kinds of things.

And the fact of the matter is, they all know that this is a very bad precedent. They ought to just stand up and -- and take control. You know, I don't know what they're going to look back on in their career if they do not stop this. And they're going to pass this resolution. There'll be a vote on the override.

If they don't stop this, they are handing a very dangerous precedent to the next president, who may be philosophically totally different than they are.

SCIUTTO: Yes.

KASICH: Of course they ought to pass this resolution and then override the president.

SCIUTTO: We'll see. You've been very vocal on the Democrats' proposal of a Green New Deal. You wrote in "USA Today" that it might not be the answer, but it's asking the right question.

And that's quite a unique position for a Republican to take because as you know, many have panned this as far too expensive. But you say that lawmakers, Republicans included, should at least be talking about solutions. What solutions?

KASICH: Jim, you brought up -- you brought up health care, OK? In the last midterm election, all Republicans were painted as being for stripping health care away from, like, 20 million Americans. And they got crushed in the midterms.

SCIUTTO: Yes.

[10:35:01] KASICH: Now, there's an issue of the environment. More and more Americans realize something has to be done. Now, what's proposed in a New Green Deal, really, is only marginally about the environment. In many respects, it's about centralizing power in Washington, redistributing wealth.

But I believe that there is a bipartisan approach to -- whether it's cap and trade or taxing carbon, it's market-oriented, extending the incentives for things like electric cars, investing in battery technology and being at the Paris Accord so we can stop the Chinese and the Indians from being able to pollute to the point, no matter what we do, their bad practices will overwhelm ours.

So this is vital. This is about the future of the planet, and it's about being good stewards of a creation that the Lord handed to us.

SCIUTTO: Yes, yes. I mean, listen, it's a fair point. You know, the president, today, again, tweeting, denying climate science. That's the reality we live in.

KASICH: I mean, come on. Come on.

SCIUTTO: Yes.

KASICH: What are we talking about here? When he's got 13 government agencies and even the military preparing for something that involved bad impacts --

SCIUTTO: Yes.

KASICH: -- of climate change, I mean, this is -- it's silly. And I'll tell you something, a little message to the Republicans. The Democrats, you may not like what they have, OK? But they have energy.

I was down at the South by Southwest --

SCIUTTO: Yes.

KASICH: -- Festival. They've got energy. Where is the Republican energy? It seems to be against rather than for. Ideas are what change the world, and I see an absence of them from my former colleagues.

SCIUTTO: Governor John Kasich, thanks very much.

KASICH: OK, Jim. Thank you.

HARLOW: That was fascinating. I mean --

SCIUTTO: And, listen, that frustration, it's just -- where are we? I mean, can you not accept the science?

HARLOW: And what are we leaving for our kids? On the national debt front that he got into, and on climate change, right?

SCIUTTO: They will pay for it.

HARLOW: All right. Overnight, wait until you see this. Air strikes in Syria as U.S.-backed forces make a big push against the last ISIS stronghold there. We'll take you live to our reporter on the front lines.

(COMMERCIAL BREAK)

HARLOW: U.S.-backed forces in Eastern Syria have killed more than three dozen militants in this major push to reclaim the last bit of territory there controlled by ISIS. Take a look at this because overnight, bombs and bullets sounded while

flares lit up the sky as a U.S.-backed coalition carried out these air strikes.

SCIUTTO: The Kurdish fighters, of course, U.S. allies on the ground, are making slow but steady progress, capturing and destroying two weapons depts. The view this morning? Smoke rising over what is left of the Islamic State. Ruined buildings, burned tents.

CNN's senior international correspondent Ben Wedeman, he's been on the ground for days now in the midst of this.

Ben, tell us what the situation is on the front lines now, and how close are they to grabbing this last bit of the caliphate?

BEN WEDERMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Jim, Poppy, today actually has been relatively quiet. There are occasional blasts and exchanges of machine gun fire in the background, but by and large it's been quiet. Quiet because we understand from officials from the Syrian Democratic Forces that people have been surrendering. ISIS fighters as well as their families, leaving this last enclave.

The overnight bombardment was intense. We -- at about 10:00 p.m. at night we heard four huge explosions in the area behind me. And this morning for the first time, we saw that the U.S.-led coalition aircraft were beginning -- or mortars, it's hard to say which -- were beginning to use white phosphorous as well, which is used to provide cover for advancing troops.

So there's been a lull. But what we've seen, the pattern is that around sunset, things become very noisy. That is when the Syrian Democratic Forces, in conjunction with the U.S.-led coalition, keeping in mind that there are French, British and American special forces manning mortar batteries and artillery.

And once the sun goes down, all hell breaks loose. It becomes very noisy here. And we expect the same thing to happen this evening.

We're getting indications that, certainly, the end is near. That they -- even though they aren't (ph) allowing for people to leave, that they have decided that it's time to bring this battle and this presence of ISIS on the ground to an end -- Jim, Poppy.

HARLOW: Ben Wedeman, it is remarkable that you are there covering it for us. Our enormous thanks to you and your team. Stay safe.

New information just in about that deadly crash of Ethiopian Airlines Flight 302.

SCIUTTO: Richard Quest has been covering airlines for a long time now. Joins us now with details.

Flight control problems, that's concerning.

RICHARD QUEST, CNN BUSINESS EDITOR AT LARGE: It is. I was just talking to the CEO of Ethiopian Airlines, Tewolde Gebremariam, whom I've known for many years. And we were talking about this flight that -- he said the other day that the pilot had said -- had told air traffic control they were having technical difficulties. Well now, he told me that what those difficulties were is, they said "We're having flight control problems."

This will be extremely worrying because that's exactly what was happening with Lion Air. Flight control problems. The ability to fly the aircraft, for your inputs to be registered and for the plane to follow through. And it would appear that that was the issue, or at least seems to be what's happening here.

[10:45:12] He also told me that the data recorders will not be read out in Ethiopia. The country doesn't have the technology. Instead, they will be sent elsewhere. When pushed, he said somewhere probably close by. Probably Europe, he suggested, would suitable places to send it.

And on the issue of the pilots, did they know about -- obviously they knew about what happened with Lion Air, but had they been retrained? He said yes. They were aware. They'd read the directives and they'd had the extra training.

HARLOW: Wow.

SCIUTTO: That would be alarming. It's an early indicator, an alarming one.

QUEST: OK. And so, sorry --

SCIUTTO: Sorry, complete your thought. Yes.

QUEST: -- there's one other thing. The number of airlines -- well, the number of countries that are now banning, temporarily, the MAX, is growing. The United Kingdom, the CAA has just done it. If they've done it, it's highly likely EASA, the Europeans will do it before tea time.

We also know that Norwegian, the airline, has also announced it's grounding its MAX fleet.

HARLOW: OK.

SCIUTTO: All right. When will the U.S. move? That's the question. Richard Quest, thanks very much.

HARLOW: Yes.

SCIUTTO: We'll be right back.

QUEST: Yes.

(COMMERCIAL BREAK)

[10:50:38] UNIDENTIFIED MALE: This is CNN, the most trusted name in news. HARLOW: All right. So this could be a pretty pivotal week in terms

of the investigations into the president. The latest, "The New York Times" reports this morning, that New York's attorney general has subpoenaed two international banks as part of its probe into four major Trump organization entities and projects. Important to note this is civil, it's not criminal.

TEXT: Trump Organization Under Investigation: Civil investigation; Deutsche Bank and Investors Bank subpoenaed; Focus and scope unclear; NY Attorney General has broad authority to investigate fraud

SCIUTTO: It comes as several former Trump insiders in the special counsel's probe appear in court this week. Former campaign chairman Paul Manafort is the first up, facing his second sentencing, this time for conspiracy and witness tampering.

TEXT: Special Counsel Key Events: Wednesday, Manafort sentencing; Flynn status report; Thursday, Roger Stone status hearing; Friday, Rick Gates status report

SCIUTTO: Let's speak now to Elie Honig. He's a former assistant U.S. attorney for the Southern District of New York.

Let's talk, first, there's a lot of stuff for folks at home to keep track of. So you've got Manafort. This is for a second prosecution in D.C., not in Virginia. But also a second sentencing --

ELIE HONIG, CNN LEGAL ANALYST: Right.

SCIUTTO: -- after what was seen as a relatively -- and I know you had strong feelings about that sentence last week.

HONIG: Yes.

SCIUTTO: So do you expect a stiffer sentence? And just in short form, give our viewers a sense of what this crime is about as opposed to last week's.

HONIG: I do, right? So last week's crime was what Manafort was tried for this past summer, and that was basically hiding money from the IRS in overseas accounts. That judge, I think, came up with way short on the sentence, 15 years under the advisory guidelines for this sentence of just under four years.

Tomorrow, he will be sentenced for witness tampering. If you remember, he tried to reach out to witnesses while he was awaiting trial. And this judge, Judge Jackson, threw him into jail for violating his bail, and for failing to register as a foreign agent.

So two different types of conduct. The sentence he faces here is actually lower than what he was facing in Virginia. Here, in D.C. tomorrow, he's facing a maximum of 10 years. And I think Judge Jackson's going to have to look at the whole picture and decide what does the total sentence need to be here?

HARLOW: But is -- but technically speaking, judge -- this is Amy Berman Jackson, also has the Roger Stone case -- is not supposed to sentence him in any way related to the much shorter sentence that he was handed down last week from Judge Ellis, right?

HONIG: Right. Correct.

HARLOW: But will she?

HONIG: I think she will. How could she not be aware of what --

HARLOW: Like, make up the difference?

HONIG: -- Judge Ellis did? Yes. And so I guess in sports they'd call it a make-up call, right? I mean, judges do this. Judges are aware of the big picture.

And yesterday, I thought it was really interesting. Mueller's team put in a new submission to Judge Jackson. And it was a one-pager and it said, "See attached." And it attached the transcript of Ellis' hearing.

SCIUTTO: Interesting.

HONIG: Now, I read that as, "Hey, Judge, we've still got some work to do here." Subtly.

HARLOW: Interesting.

SCIUTTO: Interesting. OK. So New York attorney general opening up another line of investigation on this president. Again, for the sake of our viewers, we've got to keep track of a lot of stuff, as we do sometimes have trouble. Tell us the significance of this.

HONIG: So this is an investigation into potential insurance fraud. And the thing I think that viewers will remember is when Representative Ocasio-Cortez was questioning Michael Cohen in Congress a couple weeks ago, and Cohen said, "Yes, the Trump org would inflate its assets sometimes for the purpose of getting bank loans or insurance policies."

And my take on it is, if it came from Michael Cohen -- and it did -- Southern District and Mueller have had this for months. Southern District has debriefed Michael Cohen. And so I think the Southern District, if I had to guess, is way out ahead on the criminal look here.

Now as you said, the New York A.G. is looking at this civilly. But there's not a hard line there. Cases that start as civil investigations, if you find the right evidence --

HARLOW: They can become --

HONIG: -- can become criminal. Yes, happens all the time. So.

HARLOW: The president, remember in that interview, famous interview he gave to Maggie Haberman at "The Times," called his personal finances the red line. HONIG: Yes.

HARLOW: That's his opinion, clearly --

HONIG: Yes, says who?

SCIUTTO: Right.

HARLOW: Right. But I guess my question out of that is, do his finances -- and now with the New York A.G.'s looking into, even though it is civil -- potentially pose the most risk to the president here?

HONIG: Well, I think it's most risk of having a clean hit. A crime that you can show based on paperwork, based on financial statements, based on documents, politically, will this kind of thing carry as much of a hit as if he's shown to be, say, directly involved with Russia? I don't think so.

And politically, will it move the needle enough for the House to pursue impeachment? I mean, we heard Speaker Pelosi yesterday. So I'm not sure whether financial crimes will change the calculus politically.

But I think the strongest charge -- and there could be a charge waiting for the president when he's out of office -- will come on the financial side.

SCIUTTO: I mean, understood. That's the point. Could come later.

HARLOW: Yes.

SCIUTTO: Elie Honig, always good to have you.

We have breaking news now. Our Brynn Gingras has been following this. An investigation, 12 individuals indicted on racketeering charges. This -- wait for it -- regarding college entrance exams.

[10:55:01] Brynn, you've been covering this story. Tells us what was going on here.

BRYNN GINGRAS, CNN NATIONAL CORRESPONDENT: Yes. Federal agents have made dozens of arrests today in relation to this scam. The major one though, who I want to focus on really quickly, is of this 58-year-old Rick Singer. He seems to be the head of all of this, conducting these scams.

And essentially, Jim, what was happening is, parents were paying Singer to actually have people take SATs, ACTs -- of course those are entrance exams into colleges -- for their children in order to get admitted to elite colleges. That was part of his scam.

Another part of his scam was actually bribing coaches of elite colleges to help kids actually get into these universities. But a lot of people named in this, including two actresses, Felicity Huffman and Lori Loughlin from "Full House." We're going through it and we're going to give you more. HARLOW: Wow.

SCIUTTO: Lord. Paying people to take tests for your kids. That's remarkable.

HARLOW: Brynn, thanks.

Stay right there. Much more on this ahead. We'll be back.

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