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Trump Administration Calls for Obamacare to be Stricken Down after Texas Court Invalidates ACA; Pelosi Blasts GOP, Trump on Obamacare Reversal; Democrats Will Continue to Push for Full Mueller Report; All Charges Against Jussie Smollett Dropped. Aired 11-11:30a ET

Aired March 26, 2019 - 11:00   ET


[11:00:00] JIM SCIUTTO, CNN ANCHOR: I'm Jim Sciutto, here in New York.

"AT THIS HOUR" with my colleague, Kate Bolduan, starts right now.

KATE BOLDUAN, CNN ANCHOR: Hello, everyone. I'm Kate Bolduan. Thanks for joining me.

A major reversal from the White House, or is it more of a reversal on an old reversal? I will leave you to decide what it is. The Trump administration now calling for the entire Affordable Care Act, all of Obamacare to be stricken down and thrown out. This comes after another court battle over the health care law. A federal court in Texas invalidated Obamacare. The administration's response, the Justice Department -- in their words, "The Justice Department is not urging that any portion of the district court's judgment be reversed." To put it another way, going against what the president has said repeatedly in the past year.


DONALD TRUMP, PRESIDENT OF THE UNITED STATES: We will always protect Americans with preexisting conditions. We're going to take care of them.


TRUMP: The next major priority for me and for all of us should be to lower the cost of health care and prescription drugs and to protect patients with preexisting conditions.


BOLDUAN: OK. Joining me now CNN justice reporter, Jessica Schneider, with much more on this.

Jessica, what are you hearing about this move from the Trump administration?

JESSICA SCHNEIDER, CNN JUSTICE REPORTER: Kate, the administration, they are ready to argue that the entire Affordable Care Act is unconstitutional. That's a shift in stance from what we have seen before. The Justice Department spokesperson, Kerri Kupec, really making that stance clear in just a few short words last night. Here is what she said. She said, "The Department of Justice has determined that the district court's comprehensive opinion came to the correct conclusion and will support it on appeal." That referring to the Texas court decision back in December."

So this administration now really trying to dismantle Obamacare by way of the courts. Of course, that is something they couldn't undo in Congress.

Democrats are already fighting back. House Speaker Nancy Pelosi tweeted almost immediately that Democrats will fight relentlessly, in her words, to preserve affordable health care. She is pitching health care legislation a little bit later today.

And this is really a remarkable shift for the Trump administration. This comes about six weeks after William Barr was sworn in as the new attorney general. It is notable, Kate, because, under Jeff Sessions, the previous A.G., the administration argued that some parts of the Affordable Care Act were unconstitutional, namely protections for people with preexisting conditions, saying that should be struck from the law. But they did stand by other parts of the ACA, like Medicaid expansion. Now they are latching on completely to a district court judge in Texas, his ruling back in December that was very controversial at the time, where that judge ruled that the individual mandate, that being the penalty that people must pay, he said it was unconstitutional and then said the whole health care law was then void. That ruling has been on hold as this plays out in the courts. But the administration, Kate, now saying for the first time they agree with this Texas judge, saying that this whole law, the whole Affordable Care Act cannot be defended. And they filed a letter yesterday saying they are prepared to file briefs siding with that stance.

OK, so where does it go from here? Notably, this will play out in the Fifth Circuit Court of New Orleans. That is the most conservative circuit court in the country. After that ruling, it could potentially wind up back at the Supreme Court because, of course, all of what is at stake here is really the health care of millions of Americans, including those now covered by Medicaid expansion in states all over the country, and plus, Kate, that guarantee that insurance companies can't turn people away because of preexisting conditions.

The big question, will all of that be wiped out if the Trump administration gets its way and how will this continue to play out in the courts. We're going to watch for it. But a notable shift from the Trump administration here -- Kate?

BOLDUAN: Yes. And leaving -- I hope everyone feels the same way I do, or maybe I'm odd man out -- confused as to what the president's position on even the most basic provisions in the health care law.

Jessica, it's great to see you. Thank you so much.

SCHNEIDER: Thanks. BOLDUAN: Joining me now for a little more analysis is CNN legal analyst and former federal prosecutor, Shan Wu.

Shan, I want to get your take on what you make on the shift from the administration. Going from backing a partial repeal, that coming from the president, but keeping some parts of it in place, as Jessica lays out, and now going straight to they support throwing the whole thing out. Is this unusual?

SHAN WU, CNN LEGAL ANALYST: It is really unusual. And frankly, it seems very difficult to justify for the Department of Justice. What has changed? Did the law suddenly change, the precedent change? Why are they reversing themselves? The only answer seems to be you have a new attorney general and he seems to be a big supporter of the administration's agenda. So I think, first of all, it would be embarrassing to be a Justice Department lawyer having to explain that reversal position. And second of all, it is a dereliction of their duties to defend the federal laws. If they have a strong position that this is unconstitutional, fine. You might decide not to take a position on it. But this original opinion by a district court judge is a very weak opinion. This whole idea that, because a single provision might be unconstitutional the entire law goes, that's 101 principles of construction of laws. It's a violation of that very simple first-year law-student understanding of how you construe laws.

[11:05:41] BOLDUAN: I know this sounds basic, but how does a decision like this get made? And how the administration responded to this court decision with basically those two sentences, saying we don't want anything changed from the judge's decision? Does this have to come from the president? Or could this shift be decided just within the Justice Department?

WU: The shift could theoretically be decided, Kate, within the Justice Department. But the way the department works, like any good federal agency, it comes up from the bottom. All the real substance experts in the divisions, they are briefing this with their supervisors, who brief their supervisor, and finally it makes it up to the leadership offices of Justice. By the time I looked at something, like, dozens of people have prepared it and vetted it. So it bubbles up very slowly. The Office of Legal Counsel certainly take a position, the solicitor general's office oversees all the courts of appeals decisions, as well. There's a lot of career people looking at that. For something to be reversed this suddenly, it's highly unlikely that it is like an organic growth from beneath. It is far more likely that someone put their thumb or finger on a scale from above.

BOLDUAN: As Jessica was getting to, where does this go from here? There are two tracks on how Obamacare has been fought out. It's been fought out in the political realm. We have seen that in many different ways on Capitol Hill. It has been fought out and, at one point, decided and then fought out again in the courts. The Supreme Court upheld Obamacare before. Now what?

WU: Well, when they upheld it before, Roberts was really basing that on the notion that the individual mandate was constitutional. He treated it as a tax. There's some controversy about that. But taxing is a constitutional power. That's gone now obviously. So there's question as to how they will treat it if it gets to them. My personal view is that the district court's reasoning is so poor that it is not going to survive the Fifth Circuit of Appeals, granted, conservative circuit, conservative court. Say what you will about their politics, these are good legal analysts. I just don't think they will find that the district court's reasoning, which is so poor, will survive the scrutiny. If it doesn't get past the court of appeals, then I don't think the Supreme Court will take the case. If it does, they certainly will take the case.

BOLDUAN: Say what you will about court shopping, the criticism that came from the president in other regards, especially when it comes to like the travel ban and such, I wonder what's happening here.

Thank you so much, Shan. I appreciate it.

Where does Congress go from here on this?

CNN's Phil Mattingly is on Capitol Hill filled with everything that's involved in health care.

This is confusing. What are you hearing from Democrats and Republicans about this?

PHIL MATTINGLY, CNN CONGRESSIONAL CORRESPONDENT: To give you context about where Democrats are right now on this, last night, I was texting back and forth to the senior Democratic aid, asking, what was the response going to be internally after the Mueller report was submitted, and a lot of Democrats thought it didn't live up to the billing. He sent me a text message with a link to the Fifth Circuit filing from the Justice department actually --


MATTINGLY: -- for the full validation of Obamacare. That meant this, the pivot now for Democrats is straight on to this issue. They had a closed-door caucus meeting a short while ago. A large portion was about that caucus meeting was talking about health care. At 2:30, they will unveil a legislative package filled with fixes to the Affordable Care Act that they want to push forward. Essentially, from a Democratic perspective, after what I think everybody would acknowledge has been a good couple of days for the president, this moves into where they want to be from a messaging perspective. I think Republicans I'm talking to right now just don't really know what to do with it. One person told me it was bizarre. Another person told me it was ridiculous. It's just frustration. Because there's an acknowledgment that an entire overhaul of the health care system is not tenable in a split Congress with a Republican president. It wasn't tenable in a Republican-controlled Congress. So where does that leave things right now if this issue comes back on to the table?

BOLDUAN: And the timing is somewhat baffling that the Trump administration would want to shift the focus back to health care right now. I would say, absent this move, you would have had Democrats in that caucus meeting saying, how do we shift the focus back to health care? What does this mean?

MATTINGLY: It's a great question. Nobody has a great sense right now in terms of why it happened now. I think a lot of people are pointing at the attorney general, Bill Barr's confirmation hearing where he said -- he told Senators he would go back and look at the initial position of the Justice Department that obviously was more limited to this but now it's expanded.

But I think what you hear consistently is this basically gives Democrats a message. You want to know why? You want an illustration of that? Take a listen to what Nancy Pelosi had to say after the caucus meeting.


[11:10:21] REP. NANCY PELOSI, (D-CA), SPEAKER OF THE HOUSE: Republicans did say during the campaign that they weren't there to undermine the preexisting condition benefit. Here they are, right now, saying they will strip the whole Affordable Care Act as the law of the land. They say one thing and they do another.


MATTINGLY: So just to kind of underscore the point here, if you followed 2018 -- and I know you did as well as anybody. You had no choice, to be frank, given your position at CNN - but this was the issue the Democrats campaigned on. It wasn't Robert Mueller. It wasn't the special counsel or the Russian investigator. It was health care and --


BOLDUAN: Phil, Phil, slight correction, Republicans ran on health care, as well.


BOLDUAN: Republicans tried to run on we're going to save preexisting conditions. Even if that was a complete flip-flop for them, hence, many of them lost.

MATTINGLY: Right. There was a reckoning. You can go back to repeal- and-replace debate, where Republicans figured out how popular preexisting conditions coverage was and moved to embrace that. You saw, particularly in the Senate, where Republicans gained a couple of seats, they made clear during their campaign that they supported preexisting conditions coverage. You had governors doing the same thing, Republican governor candidates, saying, we will do whatever it takes to make sure preexisting conditions are covered. Now that entire very messy fight that really starkly divided the Republican conference is now back on the table. You are seeing Democrats seize on that for the most part.

BOLDUAN: So also, behind closed doors, Speaker Pelosi was talking with Democrats this morning about the attorney general, the Mueller report being wrapped up, and when, if, how they will see the full Mueller report. What are hearing about that?

MATTINGLY: The focus from Democrats and the focus I'm told from the speaker this morning in that closed-door caucus meeting was essentially it's not about what Attorney General Bill Barr sent to Capitol Hill or his four-page letter, his interpretation of the report. It's about Democrats continuing to push for the full report. Last night, six Democratic committee chairmen sent a letter to the Justice Department saying they wanted the full report submitted by Congress by April 2. They want the underlying investigative materials as well. It's unclear whether or not the Justice Department will meet the deadline or what Democrats will do if they don't.


MATTINGLY: There's some talk about them trying to compel the report if they don't get it. But I think what they are trying to do right now is say, this is what the summary from the attorney general said, there's more to this, we will focus on that but, in the meantime, let's focus on policy issues as well -- Kate?

BOLDUAN: Honestly, left, right and center should want to see what the Mueller report says in full. I always talk about this, Chuck Grassley said -- I thought this was really poignant -- no matter where you stand on this, taxpayers pay for this report, taxpayers should be able to see this report. I'm kind of with that in that regard.

Thank you, Phil. Good to see you, man.

Coming up, the Pentagon says it is shifting $1 billion in defense funds to build new border wall at the southern border. Democrats, not shockingly, not happy about it. Details on that ahead. What does it mean?

Plus, the Mueller report is still a secret at this moment. Democrats are demanding the full release by next week. But will the Department of Justice comply? What are the options here?

We'll be right back.


[11:17:41] ANNOUNCER: This is CNN breaking news.

BOLDUAN: We are following some breaking news in the case against "Empire" actor, Jussie Smollett. I want to read to you -- as we're getting more reporting -- I want to read to you a statement from Jussie Smollett's attorneys, Tina Glandian and Patricia Brown Holmes. This is what it says. They say that all charges have now been dropped against Jussie Smollett. "Today, all criminal charges against Jussie Smollett were dropped and his record has been wiped clean of the filing of this tragic complaint against him. Jussie was attacked by two people he was unable to identify on January 29. He was a victim who was vilified and made to appear as a perpetrator as a result of false and inappropriate remarks made to the public, causing an inappropriate rush to judgement." They go on to say this, "Jussie and many others were hurt by these unfair and unwarranted actions. The entire situation is a reminder that there should never be an attempt to prove a case in the court of public opinion. That is wrong. It is a reminder that a victim, in this case Jussie, deserves dignity and respect. Dismissal of charges against the victim in this case was the only just result. Jussie is relieved to have the situation behind him and is very much looking forward to getting back to focusing on his family, friends and career."

Ryan Young has been following the many twists and turns that have followed since Jussie Smollett had filed that -- told police that he was attacked late in January by two unidentified people. Ryan Young is joining me now by phone.

Ryan, what are you hearing about this?

RYAN YOUNG, CNN NATIONAL CORRESPONDENT (via telephone): This has so many twists and turns. We were surprised to get the e-mail basically telling us we need to get here this morning. When we arrived, the rumors were all around the courthouse that charges may be dropped. That was a 360-degree change from what we were hearing before. You think about this office that is charging him with a 16-count indictment and now you are saying they are dropping the charges. When he heard this was happening, we were sort of baffled by what would happen next. Of course, the people that we know that work in the courts said he appeared here at the courthouse. We are setting up cameras now because we are expecting the actor to talk to us within the next 20 minutes. So this was really a shocking reversal when you think about the strong news conference that was had here where you had the police superintendent come out and basically believe this was all a setup.

[11:20:13] What happens with the Osundario brothers? We don't know just yet. We're not sure if they're here. Will those two men who allegedly attack him face charges? We know the two men knew him and one guy is a trainer. There's all this conversation about what happened next. I don't think anybody has that idea because this is all a shock to us.

So as of right now, apparently, he is going to come down and maybe give us some sort of statement with his attorneys in the next 20 minutes. We are also waiting for that to happen.

But in a shocking reversal, those charges have been dropped, those 16 chrges, after that January 29 attack.

I'm taking everyone back to that. You have to remember, it was one night in Chicago that he said he went to a Subway. As he went to the Subway and returned home, two men attacked him. There was that cheerful conversation that he had with "Good Morning, America. All of us were shocked by that. When you think about the stops from there, the two people who police alleged attacked him not only work on "Empire" but also knew him as a personal trainer. And they said they were hired.

What is the next step in all of this? The question marks are still out there because, will there be a statement? I will tell you this. I have been talking with some sources at the police department. The mayor and the police department will give a statement within the next hour. There's a graduation going on at the police department. Hopefully, we will have a statement from the city, try to figure out exactly how we got to this point. There were some improprieties we know in terms of people calling the state's attorney's office and try to get some help for Jussie Smollett. Kim Foxx actually stepped away from parts of this case. So there are so many questions about this in terms of how you move forward. It would be interesting to see what happens next. It's anyone's guess at this point.

BOLDUAN: It has been anyone's guess to this point.

Ryan, I don't think for our viewers we can underscore enough how far out there the police superintendent and the prosecutors went in publicly detailing what they believe happened on that night and in the days afterward and in the days before when it came to the alleged attack on Jussie Smollett. The superintendent calling it a disgrace, calling it a hoax, calling it a setup, saying that Jussie had taken advantage of the pain and anger of racism to promote his career. And now all charges dropped. The big question is, why. Is that what you are expecting to learn when they come out to speak?

YOUNG: You have to imagine the mayor and the superintendent, who are together right now at that police graduation, know that there's going to be a lot of focus on not only the investigation but how we arrived at this situation. As you remember, the superintendent used very strong words talking about the idea that who could talk about a noose or go through the length that they did in order to pull this off? In fact, they even said they believed the motivation at that point was because they believed Jussie Smollett was upset about how much he was being paid. We have seen it swing all the way to the other side because people said, I cannot believe Jussie Smollett would do this. And people were upset about the man hours that were used. We're talking about 12 police officers who were working around the clock. And then after all that, they were talking about over 140 man-hours were used to try to investigate this case.

Here is the thing. At the end of the day, where are we, Kate? Was he attacked by the two men who he knew? Did he know about it or did he not know about it? The charges have been dropped. Hopefully, someone can clarify for all of us because you think about the spotlight put on the case and to have no answers right now for why we are where we are. We expect the state's attorney's office to come down stairs, and how can you indict 16 times and then, all of a sudden, say the charges are being dropped? Someone will have to answer to why the state went forward with this and how we got to this point that we are right now.

BOLDUAN: Yes. This is just -- this is a mess of questions. I mean, I'm looking at some of the past statements from that press conference that we watched together, ryan. The police superintendent saying -- calling it a publicity stunt, saying, "It's a scar that Chicago didn't earn and certainly didn't deserve," and putting it all on Jussie Smollett. That is a key question.

Ryan is there. We are possibly going to hear from the attorneys or maybe from Jussie Smollett in the coming minutes. We'll bring that to you. Ryan, is there, as always as they're getting set up. As we wait for that, let me bring back in Shan Wu.

Shan, I really appreciate you sticking around.

A key question at this moment is, with the charges dropped, are, what does this -- on the most basic level, what does it mean? Does it mean he was attacked? That the attack did happen? Does it mean that he definitely did not stage it? What is your take here?

[11:25:18] WU: Those are facts we won't know until we get some kind of statement. But I can certainly tell you what typically would cause such a dramatic reversal. There has to be something very wrong with the case. In a case like this, violent crime, it is a problem with the witnesses or the complainant. Speculating obviously. Based on my experience in trying and prosecuting violent crime cases, this is probably a situation where something went south with the testimony of those two men that knew him, who were alleged to have been accomplices. It's a great example of why, when you are prosecuting cases or doing law enforcement, you don't want to get that far out ahead of things. Those statements were very far out ahead of the case in terms of laying the blame. It is a classic example of trying things in the public arena rather than in the court. It will be difficult for their credibility to have to walk that back. As a prosecutor and investigator, I would say I was struck by the fact that these two men really were accomplices and had been hired by them, why weren't they being charged or at least still potentially targeted. They were quick to essentially clear them, which tells me someone quickly believed one side over the other, and that could be a big mistake, Kate.

BOLDUAN: In the statement coming from Jussie Smollett's attorneys, at the very end, they say, "Jussie is relieved to have the situation behind him." So does that mean that with these charges being dropped, as this says, coming from his attorneys, does that mean that he -- is he now cleared? Is this now over?

WU: I think the criminal case is very likely to be over. Once they have dropped the charges or dismissed them, they typically don't dismiss them with prejudice. That will be an interesting thing to watch for. It's usually simply dismissed, which means, theoretically, it could be brought back. It would be really, really tough to bring it back because there's no credibility to the case after this. If they dismiss it with prejudice, that is a real sign they are almost offering a public apology saying this is never coming back, this was a mistake, it should be dismissed forever.

BOLDUAN: What are you listening for if his attorneys or Jussie himself come to speak before cameras? Obviously, there are statements we need to wait to hear from the state on this, but what questions, what is the big question right now? It's only questions at this point. This is a really surprising turn of events. What is your biggest question right now, Shan?

WU: My biggest question, is why are the prosecutors and police changing their minds? And so, from the point of view of him and his attorneys, what have they been told? They have basically told a narrative, which is that he was the victim, but hasn't really addressed the role of the two men. My big question is, for them, if they would answer it, what was that dynamic, what was the relationship with those two men. That's what we really want to know. I think that will be the key, Kate

BOLDUAN: Jussie Smollett himself has never changed, wavered in his position. He pleaded not guilty on March 14. He has maintained that he is not guilty all throughout.

For the Control Room, if we do have access to pulling up some of the press conference when we heard from the Chicago police superintendent and how he laid out in detail what they believe happened in the investigation, let me know because I would like to roll it.

I keep harping on that, Shan, because it happened during the show. We were so struck about how definitive the police superintendent was. And then when the state came out and laid out their case, it was all out there and they were mad, they were frustrated that this is something that Chicago had to deal with right now.

I have been told that I think we have part of the press conference. Just for our viewers to remember, let me play you some of it.


EDDIE JOHNSON, SUPERINTENDENT, CHICAGO POLICE DEPARTMENT: This announcement today recognizes that "Empire" actor, Jussie Smollett, took advantage of the pain and anger of racism to promote his career. I'm left hanging my head and asking why. Why would anyone, especially an African-American man, use the symbolism of a noose to make false accusations? How could someone look at the hatred and suffering associated with that symbol and see an opportunity to manipulate that symbol to further his own public profile?


BOLDUAN: Shan, everyone was struck by the police superintendent there. I guess maybe nothing should shock you as a former prosecutor. But does it surprise you now that that was -- that was not long ago and now what it appears to be happening now with all charges dropped?