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Heated Debate Within Trump Administration Over Obamacare; FAA Faces Grilling from Lawmakers After Deadly Crasher; Prosecutor Who Dropped Smollett's Charges Says Smollett is not Innocent; Prosecutors Drop All Charges Against Actor Jussie Smollett; Rahm Emanuel: It Seems Smollett was Treated Differently Because He's an Actor; Comey Says He's Confused By Mueller's Decision on Obstruction. Aired 9-9:30a ET

Aired March 27, 2019 - 09:00   ET

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


[09:00:26] JIM SCIUTTO, CNN ANCHOR: A very good Wednesday morning to you. I'm Jim Sciutto. Poppy Harlow has the week off.

A debate over healthcare, affecting more than 20 million Americans insured through Obamacare and Medicaid expansion, is now raging at the highest levels of the White House. CNN has learned that the Trump administration's push to strike down the Affordable Care Act, Obamacare, ignited a heated debate inside the president's own team.

"Politico" reporting that two cabinet secretaries, the new Attorney General William Barr and Health and Human Services Secretary Alex Azar, argued against the move because Republicans still don't have a viable healthcare plan to replace Obamacare. And without a plan to replace it, 20 million newly insured Americans, along with more than 50 million affected by provisions protecting those with pre-existing conditions, would be in jeopardy, that is nearly one in four Americans.

Joining me now is CNN's Jeremy Diamond live at the White House.

Jeremy, you reported on these heated conversations within the administration. Tell us what the battle lines are in the White House.

JEREMY DIAMOND, CNN WHITE HOUSE REPORTER: Well, Jim, it all began back in December when this federal judge in Texas ruled to strike down the entire law, the entire Obamacare law that as you said affects so many millions of Americans. And that set off a heated debate within this president's administration about what to do going forward, whether or not to support that judgment that the entire law should be struck down indeed, or whether the administration should retain its position that only certain parts of the law should be invalidated but that other provisions in the law such as the Medicare and Medicaid expansion, for example, should remain in place.

And that debate resulted ultimately in this decision on Monday by the Justice Department to release this brief legal filing to the courts that argued essentially that the administration supports this federal judge's ruling to invalidate the entire Affordable Care Act? So that, obviously, is something that is going to have huge ramifications. And obviously, it's resulted in these battle lines within the administration.

As you mentioned, these reports that Attorney General Bill Barr and Health Secretary Alex Azar oppose this decision and apparently Mick Mulvaney, the acting White House chief of staff, was -- and his allies in the White House were driving this decision to invalidate, to support invalidating this entire law.

The president yesterday as we heard said that he believes the Republican Party will be the party of healthcare. And this is all setting up for 2020. What will be the biggest issue in this election. It's very possible now that health care could be one of those issues. We know that it was a rallying cry for Democrats already in the 2018 midterms, so some concerns among Republicans about making this such a central focus, particularly if this invalidation goes forward, what will the Republican plan be to put something up to ensure that millions of Americans don't lose their healthcare from one day to the next -- Jim.

SCIUTTO: Yes. More than 70 million Americans, in fact. It affects a lot of people.

Jeremy Diamond, thanks very much.

Let's discuss now with Patrick Healy, politics editor for the "New York Times."

So, Patrick, this is a perilous political territory for this president and for the Republican Party. They lost the healthcare issue certainly in the midterms. Why is the president pursuing a drastic course like this now?

PATRICK HEALY, CNN POLITICAL ANALYST: Yes. The president really has always believed that he is his own best political strategist that he came out of 2016. No one thought he would win. He didn't even think he would win. But he understands where the country is, what it wants. He also believes very strongly in the socialism message that he is driving against Democrats, that the Democratic candidates in 2020 are pushing for kind of a Medicare for all plan that goes even beyond Obamacare, and that he thinks that he can sort of have them on the ropes on this very liberal message.

And the notion that the Republicans can be the party of healthcare goes, though, so against where they were in 2018 when candidate after candidate on the Republican side was losing over pre-existing conditions.

So, Jim, the evidence would suggest that this is sort of a non-starter for Republicans. But the president in his own head still believes he knows he needs a message for 2020 for re-election. He wants to pivot certainly off of the Mueller report. But I think it's less -- a lot of attention has been on Mueller. I guess it's somewhat less bad and more the notion again that he believes this is the best strategy. He needs a message for 2020. He feels that the Democrats are painted as socialist.

[09:05:01] SCIUTTO: Yes. I mean, this impression that he has this somehow unassailable political sense.

HEALY: Right.

SCIUTTO: Has been wrong. He was wrong on the healthcare issue in the midterms, he was wrong really on the immigration issue that seemed to push many of these swing seats in the Democrats' direction.

Just to be clear.

HEALY: Yes.

SCIUTTO: Republicans do not have a plan to replace Obamacare.

HEALY: They do not have a plan to replace Obamacare. And they got really whacked during the 2018 midterms, when one after another they kept coming out and saying we're going to fight for preexisting conditions. We're going to do that. That was a falsehood. It was proven to be that. These Republicans who are saying, some of them, folks like Tom MacArthur, the Republican congressman in New Jersey, had put up an amendment that would clearly have knocked down, lead to -- you know, for Republicans, if they succeeded, lead to the elimination of Obamacare and really kind of jacked up rates for pre- existing conditions.

SCIUTTO: Right.

HEALY: He lost. A lot of Republicans lost on this. But again, you're right about President Trump having been wrong on these issues, but he comes back, his central idea comes back to 2016.

SCIUTTO: Right.

HEALY: When everyone wrote him off and he won.

SCIUTTO: It doesn't mean that always applies.

HEALY: Does not.

SCIUTTO: Did not happen in 2018.

Patrick Healy, thanks very much. We'll certainly be watching this. Affects a lot of you who are listening and watching today.

To Washington now, the state and D.C., where two events today will highlight major fixes to the Boeing 737 Max 8 and key reforms to the process of certifying airplane safety going forward. In the Seattle suburb, Boeing is set to unveil a software update to an anti-stall feature that has implicated in both recent deadly crashes.

Later on Capitol Hill, the heads of the FAA and NTSB face a grilling. They're set to promise lawmakers, quote, "significant changes in the way that the government signs off on aircraft designs and renovations."

CNN's Jessica Schneider is following all this. Let's begin, if we can, with Boeing here, Boeing certainly aware it has a problem. So it's introducing a fix. Are we confident that this software fix does the job, to keep these planes safe?

JESSICA SCHNEIDER, CNN JUSTICE CORRESPONDENT: Well, Boeing plans to submit that software fix to the FAA by the end of this week, Jim, so presumably the FAA will be going through to safeguard and make sure that this software is right. But you know, Boeing really is taking center stage here in trying to sort of ease those concerns because if just a few hours, they'll host 200 pilots and industry stake holders at their facility just outside of Seattle.

That's where they assemble that 737 Max. And really this is all an effort to begin restoring industry confidence in that product so this session will center on the 737 Max and Boeing's planned software update that we just mentioned. The company as I said, it plans to submit it to the FAA by the end of the week.

Now this is really a software update that is set to resolve issues that aviation authorities believe lead to that crash of the Lion Air jet flight back in October when investigators say there that a malfunctioning sensor fed incorrect data to the system and the software system then pushed down the nose of the plane while the pilots, of course, fought to correct course which they never got a handle of.

So we've learned that software designers, they actually first submitted this fix to the FAA back on January 21st. That was nearly two months before that second crash in Ethiopia, and notably that submission of the software fix, Jim, came while the U.S. government was shut down.

Now, the FAA has said that the shutdown had no impact on the eventual rollout of this new software and the whole process, but still, a lot of questions for the FAA today. And it will be probably handled at the Senate hearing -- Jim.

SCIUTTO: Well, beyond the question of the shutdown having an effect, this gets to a broader issue of how the FAA allows airlines under some circumstances to, in effect, police themselves on issues like this. I mean, I imagine that's going to be a topic at the hearing as well so this doesn't happen again.

SCHNEIDER: That will exactly be a topic of this hearing because, you know, this is all about the FAA, the Department of Transportation, and the NTSB, and Boeing, they won't be front and center at this hearing. But they could face a grilling from senators at a later committee hearing. But this afternoon, of course, there'll be the acting FAA administrator, Department of Transportation inspector general, top NTSB officials.

And we've actually seen the opening remarks of the acting administrator. He will acknowledge that the agency's oversight approach really needs to evolve after these two fatal crashes and he's also expected to actually defend this whole self-certification process which has really been scrutinized since it allows Boeing essentially to self-report to the agency.

We expect that the acting administrator will say that changes to this self-certification process could be coming this summer, so, Jim, they know that this whole process has really drawn scrutiny and they perhaps plan to change it.

SCIUTTO: Jessica Schneider, thanks very much. I'm joined now by former FAA safety inspectors as well as CNN safety analyst David Soucie.

David, it's good to have you on today.

[09:10:01] I mean, these are really remarkable circumstances. You have two deadly crashes in the span of months. And just yesterday you have another 737 Max 8, it was flying, it had an engine issue, had to return for an emergency landing.

In your experience, is there any precedent for so many safety issues with a new jet in such a short period of time?

DAVID SOUCIE, CNN SAFETY ANALYST: Jim, the only other parallel that might be is the lithium batteries on the 737 Dreamliner, and that was a few years back. But those were quickly resolved, and the airplanes went back. It's a physical issue rather than a software issue.

SCIUTTO: And no deadly crashes --

SOUCIE: But that's unprecedented in our software.

SCIUTTO: There were no deadly crashes where they're blamed on that.

SOUCIE: No. That's correct.

SCIUTTO: Yes. That's a big difference.

SOUCIE: No, they're not.

SCIUTTO: And is looking at what's happened here, you know, is Boeing potentially guilty of negligence due to these crashes?

SOUCIE: Well, that's a really good question. And that's one of the things that the Senate hearing is going to be looking at and also Congress. Congress also is going to be looking at it as well so this is something that can look very damaging for Boeing if it's determined that they had reckless safety practices. That's really the terms that they're looking for. Were there reckless safety practices that led to these deaths?

SCIUTTO: Yes. You have hundreds of families dealing with lost loved ones, as a result of these crashes.

One thing I learned in this, and I wonder if folks at home are as surprised as I am, but if airlines are allowed to self-report, self- certify, I mean, in what industry does that work to have the companies themselves rather than the regulator, you know, decide what's safe and what's not, in effect?

I mean, is -- first of all, how did that happen? Second of all, is that something that as these hearings go underway that Congress, that the administration is likely to change?

SOUCIE: Yes, I think it is something that's going to be closely looked at and changed. Now it's important to point out that since 1965, the designation authority has been around. It's been used. The difference here is that they were individually, in each individual that had that authorization, had to be overseen and checked, if you will, every couple of years by the Federal Aviation Administration.

But in 2015 or possibly '16, I believe, between those two years, it was approved by Congress and actually pushed forward by Congress that acting administrator at the time didn't like the idea. But now the Organizational Designation Authority, the ODA, allows Boeing to certify their own individuals at the individual level. And that's the part that's going to be closely looked at, I'm certain.

SCIUTTO: Final question, just before we go, what do you need to see? So Boeing has sent out this software fix. I mean, the question is, how do you trust the software fix if it makes these planes safe to fly? You know, if I'm flying with my family and I see a 737 Max 8 as the equipment, do I feel safe? What do you need to see to believe that this fix actually fixes the problem?

SOUCIE: There's two things, Jim. One is we need to make sure that there is a closed loop between the information that's going into the Maneuvering Capabilities Augmentation System, the MCAS. Once that's known, in other words, before all it did was look at one angle of attack indicator. When that happened, it got a false reading from that one. It didn't have anywhere to verify that that was a false reading. So that's number one.

And number two is it has to be set where it doesn't recalibrate itself when it's reset. Currently and what caused the Lion Air crash and we suspect the Ethiopian crash is the fact that the software allows -- when the trim is pushed by the pilot, it allows it to re-center itself. It's only can move 2 1/2 degrees but it will continue to add those 2 1/2 degrees every time it's reset.

SCIUTTO: Yes. Listen, it's something we all got to watch closely.

David Soucie, thanks very much for helping us understand.

Still to come this hour, the Cook County prosecutor who let Jussie Smollett off the hook says he does not think he's innocent. Explain that. Why were there 16 felony charges against the actor dropped?

And President Trump goes after Puerto Rico again, reportedly upset at the amount of aid money given to the devastated island in the wake of Hurricane Maria.

Plus, weeks not months, the Justice Department says that's how long it will take for us, the public, to get more information about Special Counsel Robert Mueller's report, and really only then will we know what Mueller knows.

(COMMERCIAL BREAK) [09:15:00] JIM SCIUTTO, HOST, NEWSROOM: This is a story that's amazed a lot of folks, myself included. Sixteen felony charges dropped against the actor Jussie Smollett, and in an interview with the prosecutor raising even more questions and confusion this morning.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Do you think Mr. Smollett did what he was charged with doing.

JOSEPH MAGATS, FIRST ASSISTANT STATE'S ATTORNEY, COOK COUNTY: Yes, we stand behind the CPD's investigation, in this case, the great work, the tremendous work that they do in investigating this case.

UNIDENTIFIED FEMALE: Do you consider him innocent?

MAGATS: No.

(END VIDEO CLIP)

SCIUTTO: OK, so now the fraternal order police, Chicago's Police Union is demanding an investigation into why then the Cook County's state attorney's office didn't pursue those charges. CNN national correspondent Ryan Young is following these developments.

Ryan, what explains this? I mean, you see the prosecutors there, saying they believe he's guilty, and they trust the police work done to establish that guilt. Why drop the charges then?

RYAN YOUNG, CNN NATIONAL CORRESPONDENT: Jim, that's the million- dollar question at this point. So many people have had their feelings sort of hurt over this story, and we can't even chase the facts down anymore because as we've been talking about, this court case has been sealed because the charges have been dropped.

But if you think about this, when you think about the fact that the prosecution actually stood at the mics and read from the indictment and gave us all this information. If this was the course turn they were going to take, why not have the same news conference yesterday where they gave us all the information and laid out why they did not decide to do these charges.

[09:20:00] That's the big question that so many people are asking. Don't forget the superintendent and mayor pretty much found out their charges were being dropped at the same time we found out. And this was an emergency here. We all ran down there to try to figure out exactly what's going on.

But so many people are asking the questions about, wasn't this a special privilege? Did something else happen here? In fact, listen to the prosecutor talk about how this case was set up.

(BEGIN VIDEO CLIP)

MAGATS: The only reason that it's getting the scrutiny that it is, is because of who got the disposition. There are plenty of other cases, like I said, over 5,700 that have gotten some type of alternative or deferred type of prosecution.

(END VIDEO CLIP)

YOUNG: Jim, that may be the case if you think about this. This story has gotten international attention, Jussie Smollett called police or one of his friends called police to say that he had been attacked. Let's not forget, it was one of the coldest nights in Chicago, he was walking back from a subway as he tells police, when he was attacked by two people who put a noose around his neck and were screaming racial and homophobic slurs at him.

And then there was this manhunt where 12 detectives worked nonstop to try to find who did this. They believed the Olson Darrell brothers were the ones who were paid by Jussie Smollett to attack him. And you have that news conference that none of us will forget, where the superintendent of police laid out the case almost like it was a prosecution, and of course, now people are saying, well, that's not court.

And if you listen to Jussie Smollett's attorney, they believe that this has played out too much publicly.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Did someone potentially, you know, very important or influential do a favor and make a call on Jussie's behalf?

PATRICIA BROWN, ATTORNEY: No, there was no political influence in this case.

(END VIDEO CLIP)

YOUNG: So at the end of all this, Jim, if you think about it. The case is sealed, we'll never see the information police have. But let's point to something the mayor has been pointing to. They took this information to a grand jury, they heard the brothers' testimony, that's how you got the 16 count indictment.

Out of all this, maybe finally, the brothers will talk because they've never granted an interview, you know they have the text message exchanges between Jussie and themselves. So maybe they talked about part of this story. But at the end of this, it doesn't seem like anybody is going to be charged. The brothers, don't seem like they're going to be charged, Jussie is not going to be charged, just a lot of questions, a lot of hurt feelings at this point.

SCIUTTO: Yes, it's remarkable, Ryan Young, thanks for being on this story. Chicago's top officials are still calling the actor's claim a hoax.

(BEGIN VIDEO CLIP)

MAYOR RAHM EMANUEL, CHICAGO, ILLINOIS: This is a whitewash of justice. A grand jury could not have been clear.

EDDIE JOHNSON, SUPERINTENDENT, CHICAGO POLICE DEPARTMENT: Do I think justice was served? No, what do I think justice is? I think this city is still owed an apology.

(END VIDEO CLIP)

SCIUTTO: For more, let's speak to Andy Grimm; he's a reporter for the "Chicago Sun Times". So Eddie, you're right in the middle of this. Help our viewers understand the disconnect here between that news conference that we may remember a couple of weeks back from the superintendent of police, you know, laying out the case, in effect, plus all we know about even those brothers testifying against Smollett.

And yet, no charges, or at least the charges dropped in the end. How did that happen?

ANDY GRIMM, REPORTER, CHICAGO SUN-TIMES: You know, we at this point, we really don't know that the state's attorney's office is characterizing this as a routine disposition of a case that involves some very low level non-violent charges, saying that, you know, roughly 10 percent of the cases they handle get like a pre-trial diversion-type solution where the charges are essentially wiped out and the records might be expunged.

Those are usually, you know, contingent on some sort of completion of a probationary-type period or some community service. Here we learn that Jussie Smollett did community service essentially on Saturday and Monday for a few hours at operation push here in Chicago and forfeited his $10,000.

But they didn't say, hey, this is a fine, that's restitution, I mean, it was very unusual. I had a veteran defense attorney grab my sleeve as I walked out of the courtroom yesterday, you know, during the -- following the five-minute hearing where these charges were wiped out.

We just really don't know, I mean, other than the state's attorney's office saying that this was a routine disposition, Smollett's team is saying there was no deal and Smollett himself, they seem to be playing it as an --

SCIUTTO: Yes --

GRIMM: Exoneration of Jussie Smollett. It's --

SCIUTTO: Yes --

GRIMM: It's an amazing disconnect and this case has been controversial from the start.

SCIUTTO: You cited an argument there, which is an important and a fair one, saying that, you know, prosecutors in effect, they don't want to -- they want to pursue him more aggressively than other folks accused of similar crimes, possibly a fair point.

But listen to what the mayor of Chicago Rahm Emanuel told my colleague Wolf Blitzer yesterday, a different point of view, have a listen.

(BEGIN VIDEO CLIP)

EMANUEL: If it wasn't for the fact that he is an actor with influence and capacity to have influence, you would not get off with two days of community service and operation push. And you wouldn't get off if we found out that -- or I will not get off if you found out I put on my front door a swastika with all the symbolism of what that means to the Jewish people.

[09:25:00] And we found out from my own career, I put that on the door or you for your own career put that on, you think two doors -- two days --

SCIUTTO: No --

EMANUEL: Of community service at ADL, the slate would be clean, it would all be sealed.

(END VIDEO CLIP)

SCIUTTO: That's quite an argument. I mean, how are the prosecutors and other city officials responding to that?

GRIMM: Yes, well, even if they're saying that this was a routine disposition, the way it was handled was not routine. The hearing yesterday was not on the docketed court schedule. The defense team described it as an emergency hearing so there was no announcement to the press, there was no -- nothing on the court calendar that we could have seen.

And then for it to go down as it did very briefly and quickly, I mean, the mayor is right that this doesn't seem to be following the normal course of things, even if it is a normal disposition.

And lest we forget, adding to the intrigue of this is the fact that the top elected state's attorney here, Kim Fox early on, recused herself about two weeks before Smollett was charged, about a week before he was charged because of a conflict of interest, because she had made phone calls to the superintendent of police about this case at the behest of family members of Jussie Smollett, with whom she had had phone calls and text conversations.

SCIUTTO: And that raised a lot of questions as well. Andy Grimm, thanks for helping walk us through it. A truly remarkable story. Also this hour, Democrats are outraged that the special counsel Robert Mueller did not make a determination as to whether the president obstructed justice.

He let that question open. And as for fired FBI Director James Comey, he says he is just plain confused.

(COMMERCIAL BREAK)

END