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Trump Names Robert C. O'Brien As New National Security Adviser; Sen. Graham Speaks As Trump Announces Higher Iran Sanctions; Federal Reserve Poised To Deliver Another Rate Cut. Aired 9:30-10a ET

Aired September 18, 2019 - 09:30   ET

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

[09:30:22]

ANNOUNCER: This is CNN breaking news.

JIM SCIUTTO, CNN ANCHOR: This just in to CNN. President Trump announcing in a tweet that he has selected a new National Security adviser. He is Robert C. O'Brien, until now, Special Presidential Envoy for Hostage Affairs at the State Department.

You may remember O'Brien's name because he used that role as hostage negotiator shooter in an unusual case, trying to get ASAP Rocky freed from Stockholm -- from Stockholm prison where he was under charge for getting involved in a fight there. Joe John's is at the White House.

Joe, interesting choice for the President here for his new National Security adviser. What's the background?

JOE JOHNS, CNN SENIOR WASHINGTON CORRESPONDENT: Well, there is a lot of background to this and Robert O'Brien is something of a fixture over recent years in Washington. He was connected, among other things to the Mitt Romney campaign. He is also well-known for being a part of the Judge Advocate General's Corps.

O'Brien is also, as you said, connected to the ASAP Rocky case, apparently well-liked by the President. Also, factually, the President did say that he would by this week name someone else to be as National Security adviser to replace Mr. John Bolton.

And this is the President's choice. Someone he had to quick -- I should say, pick quickly, and as someone who appears non-offensive to this administration.

Now, we have been told, of course, that there will not be a sea change in policies here at the White House, with the switch to O'Brien, from John Bolton, that he is going to stay the course, if you will. Back to you.

POPPY HARLOW, CNN ANCHOR: All right, Joe Johns, thank you for that update. Let's talk about this and a lot more. David Swerdlick is here, assistant editor for "The Washington Post."

So the question becomes for O'Brien, Joe just said he is, you know, close to the President. The President likes him. But will he have the President's ear over anyone else on this or is Secretary of State Mike Pompeo still going to be the leading voice on that front? And is he an ally of Pompeo? Or will they have a division like Pompeo and Bolton did?

DAVID SWERDLICK, CNN POLITICAL COMMENTATOR: Yes. Good morning, Poppy. So I think close to the President and the President likes him is a qualification for a lot of positions in the administration. This one being no different.

O'Brien does have some experience in a variety of mid-level government roles, so I think he probably meets the qualifications. But if you compare him to the previous Trump National Security advisers, you can see a stark difference.

General Flynn had been the head of the Defense Intelligence Agency. General McMaster was a three-star. Then you had Ambassador Bolton, who was both the U.S. Ambassador of the U.N., and then became the National Security adviser, similar to Susan Rice.

This is someone who is more like a mid-level functionary, not as known as a big brain or a team of rivals type guy, and think that signals to me that they want to sort of in-house this a little bit and say that Secretary Pompeo was taking the lead role, and that they're going to have someone under him running the day to day.

I will just say, though, that yes, like Joe said they probably needed to get someone in place with everything going on in the world. U.N. General Assembly, potential war between Iran and Saudi Arabia. I guess they thought they couldn't wait.

SCIUTTO: As a matter of fact, David, is the actual dynamic here that the President is his own National Security adviser because, yes, Mike Pompeo has enormous influence in the administration with the President. He has shown his willingness to go a different course than Pompeo as well that he takes cues from himself in effect.

SWERDLICK: Yes, I think that's fair to say. Although, I do think that Secretary Pompeo, having been at C.I.A. and Sate and still staying very close to the President, I do think the President values his input.

But yes, President Trump, whether it's on National Security, whether it's on press, whether it's on domestic affairs, at times, he does seem like his own last word to himself on some issues. Sometimes that works out -- that has worked out fairly well for him. Sometimes it hasn't.

If you go by the reporting of "The New York Times" and others, back when Iran shot down one of our drones, the last word in his ear was Tucker Carlson from another network telling him not to retaliate with a strike.

The President takes advice from, you know, sort of all sides and all angles. And then as you say, Jim, in the end kind of makes his own decision. Whether that decision always works out for him is another matter. HARLOW: David, if you know, help us understand and our viewers

understand, you know where O'Brien stands in terms of how hawkish he may be. People had a lot to go on with Bolton because he had a long history.

[09:35:08]

SCIUTTO: Right.

HARLOW: He wrote a lot. He wrote, you know, bomb Iran to stop Iran. And so they knew where he stood, even if that didn't come first, as Jim says, the President's view came first when it came to Iran and the situation in the Middle East over Bolton, and that ultimately cost him his job. Do we know what O'Brien is like on that front?

SWERDLICK: I don't know enough about O'Brien's background to give you a close read on that, Poppy. But I will say that if one of his credentials going into this is that he was instrumental in the ASAP Rocky extraction from Sweden. That suggests to me that again, this is someone who's coming in again, with the basic qualifications and no shade on him in terms of his capabilities.

But in that situation, he was functioning more like an errand boy than someone who was an independent adviser and senior State Department official so that again, we don't know yet, but it suggests to me that they are slightly downgrading this position someone to manage the National Security Council, but not necessarily be a Bolton, a team of rivals, a counterpoint to the others in the administration.

SCIUTTO: Or a Kissinger you know, in that kind of role with that level of influence. I mean, let's talk for a moment about the ASAP Rocky case, because the timing is interesting here. That was a very unusual use of the position of Head of Hostage Affairs. This is typically the person who tries to get people freed from a Syrian jail, like the case of Austin Tice, not get a rapper out of prosecution for getting into, you know, essentially a bar fight in in Sweden.

We know the way this President operates, you scratch his back, and that puts you in a good position for senior roles. Is it wrong to make a connection between that case and this appointment?

SWERDLICK: Well, I don't want to draw too close of a connection. But I mean, yes, as you say, with the ASAP Rocky case, that was not a hostage situation, that was an unusual situation for a White House or a State Department to get involved in at all.

ASAP Rocky without weighing in on his guilt or innocence was in jail in a progressive western U.S. allied country, Sweden that has due process of law. The idea that he needed the personal intervention or intercession of the President of the United States and a State Department envoy was strange and also probably inappropriate.

HARLOW: And just talk about finally, David, the context. This comes in the week of the U.N. G.A. this comes, you know, as Iran and the President are further and further divided on whether they will even talk. SWERDLICK: Right, I think we have to see how this week plays out,

because with President Trump, you just never know, it seems to me that Iran is sort of waiting to see what the next move is from the United States and Saudi Arabia and how closely we are working with Saudi Arabia on this.

I don't know what the incentives would be for President Trump to simply sit down with President Rouhani at the U.N. G.A. now that this attack on the Saudi oil facility has happened.

But again, with President Trump, you just never know. At some level, President Trump likes a surprise, like a big reveal, likes the optics of saying, I took a meeting, but none of my other predecessors, whatever take. What he gets out of it is unclear.

SCIUTTO: He has taken it through with Kim.

HARLOW: Yes, look at North Korea. I was just going to say that. Look at North Korea.

SWERDLICK: Right.

HARLOW: David --

SWERDLICK: Yes.

HARLOW: Thank you for your brain and your insight on this breaking topic as it just came in.

SWERDLICK: Thanks, you guys.

HARLOW: We appreciate it. We'll see you soon. We'll take a quick break. We'll be right back.

(COMMERCIAL BREAK)

[09:43:30]

SCIUTTO: Welcome back. Senator Lindsey Graham speaking just moments ago on the Hill about Iran, Saudi Arabia and the President's response. Have a listen.

(BEGIN VIDEO CLIP)

SEN. LINDSEY GRAHAM (R-SC): Well, the first thing I want to do is congratulate President Trump on picking Robert O'Brien to be the national -- the next National Security adviser.

Mr. O'Brien is a great choice. He understands the world for the dangerous place it is. He has great negotiating skills as our hostage negotiator, and I think you'll be very sound policy adviser to the President of the United States and President Trump made a very good choice in Robert O'Brien.

As to Iran, I'm hoping that Secretary Pompeo can pull together a coalition that will act in a fashion to change Iran's behavior. I support the idea of working on a regional coalition. I would like to see the President go to the U.N. and make the case that Iran's behavior is an act of war against Saudi Arabia and must be dealt with firmly. Whether or not the United Nations would respond, I don't know.

As to Iran itself, I appreciate the effort of the President to be measured when it came to the drone attack. But the point I'm trying to make is not what I think is what the Iranians think, and clearly they have not gotten the message.

This attack on the oil refinery by any reasonable definition is an act of war. It is attacking the world economy and stability of the oil markets throughout the world, and in addition to attacking a refinery in Saudi Arabia, the Iranians are increasing enrichment, putting them closer to a bomb.

[09:45:10]

GRAHAM: Why does all this matter? If the Arabs bleed, and the United States and our allies throughout the world will not stop Iran from marching toward a nuclear weapon, the Arabs are going to get one of their own. Then you have a nuclear arms race in the Mideast.

So what I'm looking for is action by the administration and the world to restore deterrence because when it comes to Iran's misbehavior, we have lost deterrence.

QUESTION: When you look at the sanctions that President Trump announced, I mean, he hasn't really announced the details of it. But is that enough of a punishment to deter in your mind Iran from future attacks? Or do you think that this is also going to be perceived as weakness?

GRAHAM: Well, the maximum pressure campaign has worked in the sense it has crippled the regime's economy. It has made life difficult for the regime, but it has not changed their behavior.

So what I'm looking for is a response to restore deterrence. If you do not deter Iran, they will move forward even more aggressively, quite frankly, I am shocked they were this bold and brazen after the drone attack.

The bottom line with Iran is radical Islam does not accept subtlety well. The only conclusion I think you can reach is that the Iranians, while having been hurt by the maximum pressure campaign have not been deterred in terms of their provocative behavior. And it's going to take something I think beyond sanctions to achieve that deterrence.

QUESTION: You don't think sanctions are enough?

GRAHAM: In the past, they haven't been. Time will tell. But I'm looking for a response that would be unequivocal. If they don't pay a price for bombing a neighbor's oil fields, then all hell is going to break out in the Middle East.

I appreciate building a coalition. I think, they are smart. I'm not looking for a response immediately. But I am looking for a response that would restore deterrence. And my belief is that additional sanctions will fall short because the sanction regime in places, the toughest we've had in the history of the problem with the Iran, I give the President great credit for a maximum pressure campaign that has punished Iran, but the goal is to deter their aggressive behavior and we're not there yet.

QUESTION: Given the President's tweet yesterday about his disagreement with you on sort of how you characterize the drone strike. I'm curious, are you in the President on the same page when it comes to Iran?

GRAHAM: I like the President, I like the maximum pressure campaign. I like his foreign policy. I think he's been a good Commander-in- Chief. But I'm trying to make the point, and I've been consistent about this.

Iran, once you withdrew from the nuclear deal, which I thought was a right decision, you need to reinforce that we're going to stop Iranian misadventure. And the point I was trying to make, the restraint shown and the measured response, which made sense to me, I'm not the audience, it is the Iranians.

And the only conclusion you can gather is that what we did regarding the drone has not worked. Because this escalation is beyond what I thought they would even consider.

Can you imagine the thought process after the drone attack, after seizing ships on the high seas? Why don't we bomb Saudi Arabia and see what happens? I am convinced it was an Iranian attack.

So just think for a moment, the thought process that goes into the leadership of Iran, when they say, let's put on the table and attack on Saudi Arabia and see what they will do.

I think this is a moment of testing for the region, the United States and I hope we passed the test in the eyes of the Ayatollah.

QUESTION: There have been reports that Iranian officials said that any kind of response that the United States has will be met with prompt -- responsibly prompting strong in maybe broader areas --

HARLOW: One of the President's closest allies in the Republican Party, Senator Lindsey Graham disagreeing with the President saying sanctions aren't enough to deter Iran.

Jim, I thought it was interesting that he has just said, I'm convinced that this was an attack by Iran -- going further at least for now ...

SCIUTTO: For sure.

HARLOW: ... than the President has.

SCIUTTO: Also it convinced me, the doubling down on this criticism of the President yesterday via tweet that not responding militarily to the drone shoot down emboldened Iran. They have laid the groundwork for this. He says if you do not deter Iran, they will act aggressively. That's a marked public difference between Graham and Trump.

HARLOW: He said he hoped that the U.N. would take action, not convinced and then he said I'm not calling for this right away. But basically, if we don't take action beyond sanctions, Iran will not change. A testing moment he says for the President and this country. Significant. We'll be right back.

(COMMERCIAL BREAK)

[09:53:29]

HARLOW: All right, welcome back. A highly anticipated meeting by the Fed underway right now. They are facing growing pressure from the President to cut rates once again by about 25 basis points. Will that happen?

This comes as a new survey out today shows more than half of the CFOs -- Chief Financial Officers -- in the country think a recession could hit before the 2020 election.

Our senior business writer, Matt Egan is with me. There's so much to get to with you. Let's start on that 53 percent of CFOs polled by Duke think this thing is going to turn south.

MATT EGAN, CNN BUSINESS SENIOR WRITER: Poppy, this is the longest economic expansion in American history.

HARLOW: Ever.

EGAN: It's been going on for more than a decade and business executives are getting worried that it might end soon, right? We've got the trade war and the global growth slowdown and both of those things are linked together and they're both causing uncertainty.

And so that's why U.S. business optimism is at a three-year low. We made a screen to show this. Just -- right now, it's just 12 percent of U.S. chief financial officers are more optimistic about the economy. That's down from 44 percent just a year ago, it's a really sharp decline.

HARLOW: What's so interesting to me is a lot of this would be preventable. Meaning many of them wouldn't feel this way if we didn't have this trade war getting escalated with China if this were being dealt with perhaps in another way.

But Matt, also a very scary sign, a crack in the strength of the economy and it's a little wonky, but it's very important. The New York Fed has had to inject $128 billion into operations so basically shore up the overnight lending market. Why does that matter to the average American?

[09:55:05]

EGAN: Well, it matters because it's unprecedented, at least in the post crisis period. The New York Fed hasn't had to do this kind of emergency style liquidity pump since 2008. And what happened was overnight lending rates spiked and that forced the New York Fed to step in. That's really important.

I mean, we look at the Dow, we look at the S&P 500, the 10-year Treasury, but this is a very important market that is central to financial --

HARLOW: But spike from like, two percent to 10 percent, not just a few points.

EGAN: Right. Exactly. And that's why the New York Fed stepped in here and it is a sign of perhaps that the market is having some trouble absorbing all of these treasuries that have been issued to pay for the trillion dollar deficit. And that, of course, is linked to the tax cuts and the spending surge.

HARLOW: Yes. Well, apparently, Democrats and Republicans in Washington don't care about debt and deficits anymore. But then you see things like this, and maybe they think again.

EGAN: They may have to start to actually care about it.

HARLOW: Matt, thank you. I think a million people read your story on this overnight.

EGAN: Something like that.

HARLOW: If you haven't read it, you should read it on CNNbusiness.com. Thank you, Matt, very, very much.

EGAN: Thank you, guys.

SCIUTTO: We are following multiple breaking stories this hour, President Trump announcing new sanctions against Iran while also naming a new National Security adviser. There's more news. Stay with CNN.

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