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Early Start with John Berman and Zoraida Sambolin

New York Times Obtains 20-Plus Years Of President Trump's Tax Returns; United Kingdom Universities Struggle With Coronavirus Outbreaks; Democrats Frame SCOTUS Fight As Threat To Health Care. Aired 5:30-6a ET

Aired September 28, 2020 - 05:30   ET

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

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[05:30:56]

CHRISTINE ROMANS, CNN ANCHOR: Breaking news -- the bombshell revelations in "The New York Times" on President Trump's taxes. Staggering business losses, crushing personal debt, and a tax bill that's just a fraction of what most hardworking Americans have to pay.

Good morning, this is EARLY START. I'm Christine Romans.

LAURA JARRETT, CNN ANCHOR: And I'm Laura Jarrett. About 30 minutes past the hour here in New York.

And we begin this half-hour with the big breaking news overnight. The man who portrays himself as one of the wealthiest presidents in the nation's history has avoided paying federal income taxes for decades.

"The New York Times" publishing a devastating expose Sunday after obtaining two decades' worth of the president's tax returns -- the very records that Trump has fought tooth and nail to keep secret from journalists, prosecutors, and the American public.

The "Times" report pulls back the curtain to tell a story completely at odds with the public persona that Trump has worked so hard to create. Instead, the reality is a serial tax avoider who takes in hundreds of millions of dollars in losses and is crushed by a mountain of debt.

Here's just a sample from the story in the "Times".

Quote, "The picture that perhaps emerges most starkly from the mountain of figures and tax schedules prepared by Mr. Trump's accountants is of a businessman-president in a tightening financial vise. Most of Mr. Trump's core enterprises, from his constellation of golf courses to his conservative-magnet hotel in Washington, report losing millions, if not tens of millions of dollars year after year."

That hotel and the tax records revealing even more details on the potential conflicts of interest created by Mr. Trump taking so much money from foreign officials and lobbyists.

White House correspondent John Harwood has more on last night's big revelations.

(BEGIN VIDEOTAPE)

JOHN HARWOOD, CNN WHITE HOUSE CORRESPONDENT: On the eve of the first 2020 presidential debate between Donald Trump and Joe Biden, a bombshell report from "The New York Times" showing that the president, after an extensive review of his tax records, paid only $750 in 2017, his first year as president, in federal income taxes. The same in 2016, the year he was running for president.

And more broadly, paints a picture of a president in financial distress, increasingly squeezed by the losses at his businesses that are part of the Trump Organization and reliant on his status as president to make money, both from taxpayers through visits to his properties, from having lobbyists and foreign officials come to his hotels to seek access -- come to Mar-a-Lago to seek access.

This is a president who has portrayed himself as a tremendous business success to the American people and used that argument to say he could turn the country around.

This "New York Times" report that says it relies on tax records that it says it got from people with legal -- the legal right to possess them shows a much different picture of this president.

Now, this issue has come up before. The president faced Hillary Clinton in a debate in 2016 and she pointed out another "New York Times" report showing he hadn't paid taxes in particular years. He said that makes me smart.

The question is, are all of those American voters and taxpayers who paid a lot more than $750 over the last four years going to think that that is -- they paid more because he's smarter than them or for some other reason.

And you can bet that Joe Biden is going to bring this up on the debate stage on Tuesday night just as Hillary Clinton did four years ago -- Laura and Christine.

(END VIDEOTAPE)

ROMANS: All right, John Harwood at the White House. Thank you for that, John.

You know, the full extent of the president's financial stress has been something of a mystery. You know, the signs of tax avoidance have been there. Let's play the moment during the 2016 debate that John Harwood was just talking about.

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HILLARY CLINTON (D), FORMER PRESIDENTIAL CANDIDATE: The only years that anybody's ever seen were a couple of years when he had to turn them over to state authorities when he was trying to get a casino license, and they showed he didn't pay any federal income tax. So if he's paid -- DONALD TRUMP, PRESIDENT OF THE UNITED STATES: That makes me smart.

(END VIDEO CLIP)

ROMANS: The president bragging then about not paying income taxes. He also bragged about how successful his businesses are.

[05:35:03]

(BEGIN VIDEO CLIP)

TRUMP: And I built a great company -- one of the best companies. I have some of the greatest assets in the world. My finances are very clean.

(END VIDEO CLIP)

JARRETT: In reality, as we mentioned at the top of the show, the "Times" reports that President Trump's core businesses, from his golf courses to his Washington, D.C. hotel, have been losing millions of dollars year after year.

Also dangling over the president's head, a decade-long audit by the IRS, and it's all over the legitimacy of nearly $73 million in a tax refund that Trump received. An adverse ruling could cost Mr. Trump more than $100 million according to the "Times."

And he's also personally responsible for loans and other debts totaling $421 million -- most of that coming due within the next four years. That means if he's reelected, his lenders might have to decide whether to foreclose on a sitting president.

And, Christine, the question I have this morning is just how much of the story did those lenders know about.

ROMANS: It's just -- it shows you that he made so much money as an entertainer. He was an entertainer and lost money on the business side of the -- you know, he was an entertainer pretending to be a master businessman but really, on the business side, he was losing the money. The contradiction is just remarkable when you look at these "Times" documents.

Let's take a look at a couple of side-by-side comparisons here. In 2017, Joe Biden filed jointly with his wife Jill and paid more than $3.7 million in taxes. Kamala Harris paid more than half a million. Bernie Sanders, nearly $344,000. Elizabeth Warren paid more than $268,000 in taxes.

And take a look at what past presidents paid in their first year in office from Bill Clinton's $63,000 up to Barack Obama, who paid $1.8 million. Most of that, Laura, on royalties from his books.

JARRETT: So in response to these new revelations, the president is trotting out the same familiar tactics, insisting there's nothing for the voters to be concerned about while falsely claiming, once again, that he can't release his taxes because of his ongoing audit. That's an argument refuted by his own IRS commissioner.

(BEGIN VIDEO CLIP)

TRUMP: Yes, basically -- well, first of all, I paid a lot -- and I paid a lot of state income taxes, too. The New York State charges a lot and I paid a lot of money in state. It will all be revealed. It's going to come out. But --

REPORTER: When?

TRUMP: -- after the audit is. After the -- I'm being -- they're doing their assessment. We've been negotiating for a long time. Things get settled, like in the IRS.

But right now, when you're under audit, you don't do it. You don't do that. So we're under audit.

But the story is a total fake and all of this -- this one -- you know, we had the same exact questions usually asked by the same people, and that took place four years ago, you remember.

(END VIDEO CLIP)

JARRETT: Trump Organization lawyer Alan Garten tells "The New York Times" that most, if not all of the facts appear to be inaccurate, without specifying which facts. And he's requested the documents that have been obtained by the "Times."

ROMANS: A scathing line from "The New York Times" report. Quote, "Mr. Trump has been more successful playing a business mogul than being one in real life."

The tax bombshell reveals three things. The president is adept at losing money. The tax system rewards rich people who lose a lot of money. They can write it off of future gains. The average citizen has paid more to support America's military, roads, schools, and democracy than he has.

Data from the Tax Policy Center shows roughly half of Americans pay no income taxes, largely because of how low their income is. But, IRS data shows the average tax filer paid roughly $12,200 in 2017. That's about 16 times more than what President Trump paid the same year.

As a candidate, Trump sold Americans on being a successful businessman, but he found multiple ways to write off the cost of creating that image. Trump took huge deductions, including $70,000 to take care of his hair during "THE APPRENTICE." And he appeared to write off hundreds of thousands of dollars paying his daughter Ivanka as a consultant to the Trump Organization.

JARRETT: We move now to coronavirus as Cal State Long Beach is locking down classes after some students test positive for COVID, as New York and New Jersey officials worry about an uptick in cases.

CNN has reporters across the country bringing you the latest developments on coronavirus. (BEGIN VIDEOTAPE)

PAUL VERCAMMEN, CNN REPORTER: I'm Paul Vercammen in Los Angeles, California.

A frightening projection from state health officials. They say that COVID-19-related hospitalizations could rise by as much as 89 percent. They are basing this on some rising metrics, including the number of people being admitted to the hospital, as well as more people going to the E.R. with COVID-related problems.

Also, one of those hotter spots, Cal State Long Beach. The campus now closing in-person classes after five students tested positive for COVID-19.

RANDI KAYE, CNN CORRESPONDENT: I'm Randi Kaye in Palm Beach County, Florida where the governor says Florida is officially open for business to 100 percent. We are officially entering phase three.

[05:40:03]

He says that restaurants, bars, nightclubs can all open to 100 percent. There will be limited social distancing protocols in bars and nightclubs.

The governor also says that the counties and the local municipalities will not be able to fine people anymore for not wearing their masks. Many of the counties have mandates that you must be wearing a mask inside, at the very least. Now those people will no longer be fined.

The governor says if there is a spike in cases, the state is prepared to handle those infections.

POLO SANDOVAL, CNN NATIONAL CORRESPONDENT: I'm Polo Sandoval in New York where health officials are watching what they describe as a concerning uptick in COVID cases. The city's health department says parts of Brooklyn and Queens have experienced an increase in infections during a short period of time recently. The health department threatening with stricter restrictions if numbers continue trending up.

Statewide in New York, just over 1,000 additional cases were reported on Saturday. That's a slight uptick from the day before.

And in neighboring New Jersey over the weekend, the highest daily COVID case count was reported since this summer. According to the state's COVID-19 data dashboard, 760 new COVID-19 cases were confirmed on Saturday. That's the highest daily case count for the state since June fourth when 864 cases were reported.

EVAN MCMORRIS-SANTORO, CNN CORRESPONDENT: I'm Evan McMorris-Santoro in New York.

This city is now just one day away from a huge test for its public school system, the nation's largest. Elementary school students are set to welcome students back into the classroom from a hybrid in- person schedule on Tuesday. Middle schools and high schools are set to follow two days later. That's if all goes according to plan, which is a very big if.

This process of reopening schools has been marked by political squabbles and delays. And over the weekend came more complaints from large unions representing teachers, as well as school administrators. Their concern is that there aren't enough teachers to meet the increased demand required by socially-distant classrooms.

The union representing administrators and principals asked Gov. Andrew Cuomo to step in, while also telling parents their students will be taken care of if they report to school buildings this week.

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ROMANS: All right. Thanks to all of our correspondents for those reports.

The United Kingdom is reporting some of its highest single-day coronavirus case counts ever and the surge is being fueled largely by young people.

Scott McLean joins us live from London with the latest developments. It's a story that's been repeated in a lot of different places that young people feel that they're immune, I guess, or just go about their daily life, and that is spreading the coronavirus.

SCOTT MCLEAN, CNN INTERNATIONAL CORRESPONDENT: That's right, Christine. And right now, there are major concerns in this country about outbreaks on university campuses. Seventeen hundred students at one university in Manchester are currently under quarantine in their dorm rooms after a small outbreak there.

Meanwhile, Scotland has actually banned students from going to restaurants, bars, and cafes for fear of spreading the virus off- campus to more vulnerable parts of the population.

Even the health secretary here has not ruled out the possibility of asking students not to go home to visit their families over Christmas.

Now, over the past two weeks, the U.K. has made all kinds of new rules and regulations when it comes to the coronavirus. But the prime minister, Boris Johnson, is facing somewhat of a revolt from within his own party. A group of MPs is now pushing an amendment in Parliament which would require parliamentary approval -- a vote on any new COVID-related rules.

In March, the Parliament voted to give the government the power to make new rules without actually consulting them and one MP said this weekend that that is precisely how liberty dies.

Will it pass? Well, one prominent Labour MP said this weekend that he is sympathetic to this cause but would not yet commit his party to actually voting for it, Christine.

ROMANS: All right, Scott McLean for us in London this morning -- this Monday morning. Thanks, Scott.

JARRETT: All right.

Also developing this morning, French authorities responding to a coronavirus resurgence with new restrictions. The country surpassed half a million cases on Friday. As of today, bars and restaurants in big French cities face a 10:00 p.m. curfew.

Joining us now from Paris is CNN's Melissa Bell. Melissa, nice to see you this morning. How are folks responding to these new restrictions?

MELISSA BELL, CNN INTERNATIONAL CORRESPONDENT: Well look, Laura, they've proved pretty controversial.

You're right, 11 major cities, including Paris, from tonight, see not only bars closing at 10:00 p.m. but a whole host of other new rules. For instance, gyms are having to close, limits on social gathering. And down in the south, in Marseille, it's even worse since bars and restaurants are having to close altogether.

That's how bad the situation is and how fast the figures are rising. Probably the most worrying ones, the number of people in ICUs. Nationwide, the number of people in ICU has nearly tripled this month. And if you look down in Marseille, it has more than tripled.

That's the key figure to watch because what you're talking about is whether the health system can continue to cope with this massive surge in cases, this massive surge in the number of people needing intensive care treatment. And for the time being, that is the case.

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The question is whether these latest restrictions, as controversial as they are, will be enough -- just as we saw during the first wave -- to allow the health system to cope. For the time being, there's no sign of those numbers being brought back under control -- on the contrary. We see them rise day-after-day, Laura.

JARRETT: All right, Melissa. Thank you so much from Paris for that reporting.

ROMANS: All right, to politics now.

The battle lines are now drawn over President Trump's Supreme Court pick. How Democrats plan to reframe this fight. That's next.

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JARRETT: Welcome back.

The battle over President Trump's third and perhaps most consequential Supreme Court pick, Judge Amy Coney Barrett, has officially started. Take a listen to Democratic nominee Joe Biden.

(BEGIN VIDEO CLIP) JOE BIDEN (D), PRESIDENTIAL CANDIDATE: Never before in our nation's history has a Supreme Court justice been nominated and installed while a presidential election is already underway. It defies every precedent, every expectation of a nation where the people -- the people are sovereign and the rule of law reigns.

[05:50:15]

It's no mystery about what's happening here. President Trump is trying to throw out the Affordable Care Act and he's been trying to do it for the last four years.

(END VIDEO CLIP)

JARRETT: CNN's Jessica Schneider has more now.

(BEGIN VIDEOTAPE)

JESSICA SCHNEIDER, CNN Christine and Laura, Democrats are really drilling into this idea that a confirmation of Amy Coney Barrett -- in particular, a speedy confirmation -- could have detrimental effects for health care in this country.

That's because the Supreme Court, on November 10th, one week after the election -- they are set to hear arguments on the Affordable Care Act. In particular, whether the individual mandate, now that the penalty is a zero dollars for people who don't get insurance -- whether that's constitutional. And if it's not constitutional, whether the entire Affordable Care Act should be struck down.

Remember, it was in 2012 that Chief Justice John Roberts stepped in to save the ACA by ruling that the individual mandate was constitutional because it was a tax.

But in 2017, just before she joined the 7th Circuit Court of Appeals, Amy Coney Barrett wrote this about the chief justice, saying, "Chief Justice Roberts pushed the Affordable Care Act beyond its plausible meaning to save the statute." And it's that line that's causing great concern for Democrats.

And, House Speaker Nancy Pelosi talked about the practical effects that would happen if the ACA was, in fact, struck down.

REP. NANCY PELOSI (D-CA): It doesn't matter what the process is here. What matters is what it means personally to the American people.

If you have a preexisting medical condition, that benefit will be gone. If you are a woman, we'll be back to a time where being a woman is a preexisting medical condition. If your children are on your policy, say -- your adult children are on your policy, no longer will they be -- and that in a time of a pandemic.

And if you have seniors in your family who are having long-term care paid for by Medicaid, they're going to be pretty soon moving back home and living with you. SCHNEIDER: And it is the Trump administration that is advocating for the ACA to be struck down. In fact, the president tweeting on Sunday it would be a big win if the ACA was struck down, promising for a better and cheaper alternative. But it's notable that it was just the past few days that the president issued an executive order protecting preexisting conditions but really not laying out exactly how that would happen.

Now it is important to note that while the arguments will be heard one week after the election, the Supreme Court would not likely come down with a decision on the Affordable Care Act until the late spring or early summer of 2021 -- Laura and Christine.

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ROMANS: All right, Jessica. Thank you so much for that.

Let's get a check on CNN Business this Monday morning. Gains around the world to start the week. Asian markets closed mixed there. Tokyo and Hong Kong higher there. European shares have opened higher.

And on Wall Street, gains this morning as well. Investors are preparing for the last jobs report before Election Day. That comes on Friday. Economists estimate 875,000 jobs were created in September, bringing the unemployment rate to 8.3 percent. That would be the highest jobless rate ever recorded going into a presidential election.

Lawmakers on both sides agree more stimulus is needed to help millions of struggling Americans. House Speaker Nancy Pelosi expressed optimism Sunday she could reach a deal in talks with the Treasury Sec. Steven Mnuchin.

House Democrats have put together a slimmed-down proposal of the plan they passed back in May. The new proposal has a price tag of about $2.2 trillion. It includes money for unemployment insurance, direct payments, small business loan funding, and aid for struggling airlines. Pelosi did not rule out the possibility of offering that proposal as a bill if a deal can't be reached.

Last-minute legal drama for TikTok. It won't be kicked off U.S. app stores, at least not yet. A judge blocking the Trump administration's attempt to ban the app in the U.S. hours before a Sunday deadline. The administration has argued that TikTok's ownership by the Chinese company ByteDance is a threat to national security.

The Commerce Department delayed banning downloads of the app last week after the president gave his blessing to a deal between ByteDance, Oracle, and Walmart. That deal still hasn't been finalized. This court ruling gives them a little more time.

The Commerce Department said it would comply with the injunction.

JARRETT: It will be interesting to see what happens with that case next.

ROMANS: What a drama, right? JARRETT: I know, right?

All right, thanks so much for joining us today. I'm Laura Jarrett.

ROMANS: Yes, happy Monday, everybody. I'm Christine Romans. "NEW DAY" is next.

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[05:59:02]

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UNIDENTIFIED MALE: A bombshell "New York Times" report says Donald Trump didn't pay any federal income taxes for 10 of the 15 years before his election.

TRUMP: The story was a total fake. It's total fake news.

HARWOOD: This report is a devastating picture of a president who is bleeding financially and depending on the presidency to prop him up financially.

UNIDENTIFIED FEMALE: Globally, coronavirus deaths are approaching one million. Dr. Fauci cautions we are still in the first wave of the coronavirus and has warned infection rates will likely rise.

UNIDENTIFIED MALE: The virus is not going away, so we're not turning the corner. We're not on the final turn.

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ANNOUNCER: This is NEW DAY with Alisyn Camerota and John Berman.

ALISYN CAMEROTA, CNN ANCHOR: We want to welcome our viewers in the United States and all around the world. This is NEW DAY. It is Monday, September 28th, 6:00 here in New York.

Breaking overnight, we now know what is in President Trump's taxes. The long-awaited mystery is over this morning. "The New York Times" obtained two decades worth of Donald Trump's tax records. Here's the headline -- "President's Taxes Chart Chronis Losses, Audit Battle and Income.