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North Korea Threatens Guam; Trump Warns North Korea; WSJ Board Rips Bannon; Manafort's Home Raided. Aired 12-12:30p ET

Aired August 09, 2017 - 12:00   ET

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

(COMMERCIAL BREAK)

[12:00:13] DANA BASH, CNN ANCHOR: Welcome to INSIDE POLITICS. I'm Dana Bash. John King is off.

Are we barreling towards the brink? President Trump is warning North Korea of fire and fury after a U.S. intelligence assessment that Kim Jong-un can put a nuclear warhead on top of his missiles.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: North Korea best not make any more threats to the United States. They will be met with fire and fury like the world has never seen.

(END VIDEO CLIP)

BASH: Pyongyang, which knows a thing or two about saber rattling, claims it is now examining strike plans to hit Guam, a U.S. territory. The president's advisers say his refusal to back down is meant to end what they call extortion that happened under the watch of three administrations that preceded him.

But while Trump is promising to respond with never seen before power, his rhetoric sounds very familiar to other ominous speeches, the likes of which we have seen before. Like this address from President Harry Truman during World War II announcing the first time America used nuclear weapons.

(BEGIN VIDEO CLIP)

HARRY TRUMAN, FORMER U.S. PRESIDENT: If they do not now accept our terms, they may expect a rain of ruin from the air, the like of which has never been seen on this earth. Behind this air attack will follow sea and land forces in such numbers and power as they have not yet seen and with the fighting skill of which they are already well aware.

(END VIDEO CLIP)

BASH: Here to share their reporting and their insights, Michael Shear of "The New York Times," Abby Phillip of "The Washington Post," "The New Yorker's" Ryan Lizza and "The Washington Post's" Karoun Demirjian.

And CNN's chief national security correspondent Jim Sciutto joins me now to talk about what is going on, the latest situation -- the latest information you're getting from your sources, I should say, with this situation.

Jim, you spent a lot of time, you lived in Asia, so you understand the complexities of this and the kind of nature of this very difficult diplomacy. What are you hearing?

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: Well, it seems to be a very public and very deliberate walk back or clarification you might say of the president's comments yesterday. Military officials telling us that there are no plans for additional military steps or deployment of resources, for instance, to Guam, which is what North Korea threatened to strike with medium range ballistic missiles following the president's tough talk yesterday.

We did hear from the commander of U.S. missile defense forces today saying that he's confident that U.S. missile defenses could handle a North Korean ICBM. But then also from the top U.S. diplomat, Secretary Tillerson, during his trip, he said the following to reporters on his plane, again a very different message than the one you were hearing from the president yesterday.

(BEGIN VIDEO CLIP)

REX TILLERSON, SECRETARY OF STATE: I think the president -- what the president is doing is sending a strong message to North Korea in language that Kim Jong-un would understand, because he didn't seem to understand diplomatic language. We're hopeful is that this pressure campaign, which the entire world now has joined us in, and with the engagement of China and Russia, two of North Korea's closest neighbors, that they can begin to persuade the regime that they need to reconsider the current pathway they're on.

(END VIDEO CLIP)

SCIUTTO: Interesting that, Dana, because even administration officials are saying today that the president's words yesterday were not planned, fire and fury, that it was not surprising, but not an expected formulation or an intentional new American threat with some meaning behind it.

And just to be clear, when you look at the military options here, and we've said this many times on the air before, they are not only horrific in that you have the chance of enormous collateral damage, civilians in South Korea, U.S. troops stationed there as well. But there's also a handicap here in that U.S. intelligence inside North Korea is not great. They don't know for sure where all the nuclear forces are buried, as it were, where they are hidden. That's by design. North Korea has mobile launchers. They move them around. They're buried under ground. So that hampers the effectiveness of any military option as well going forward.

BASH: Jim Sciutto, thank you so much for that reporting. And President Trump's promise of fire and fury came without a clear distinction of what would push him to act. But some Republicans see a red line.

(BEGIN VIDEO CLIP)

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: President Trump has basically drawn a red line saying that he'll never allow North Korea to have an ICBM missile that can hit America with a nuclear weapon on top. He's not going to let that happen.

(END VIDEO CLIP)

[12:05:07] BASH: And let's bring it around the table now.

Michael, look, this is something that was a little bit jarring because we're not used to hearing presidents speak like this, vis-a-vis North Korea. Is it your sense that the president had this in his prepared remarks, that he -- that he very carefully calculated this as one maybe should do, or historically does with something this delicate, or was he being Donald Trump and just kind of going with his gut?

MICHAEL SHEAR, "THE NEW YORK TIMES": So my sense is that the administration, you know, has been frustrated broadly with the -- what they would consider maybe the passivity of previous administrations and their -- and the way they've been handling North Korea. I don't get the sense, and I don't think we have reporting that suggests that this was a -- that the specific remarks were kind of a well thought out, you know, kind of thing that went through a process -- a national security process that ended up in those particular words.

Look, I think part of the issue here is when you bluff, when you're playing poker and you bluff, one of the worst times to bluff is when your opponent is not a rational player and is not going to back down thinking through the -- the sort of --

BASH: And Kim Jong-un is anything but rational.

SHEAR: Anything but. And so I think that's the thing that a lot of people are reacting to is, you know, is this the right moment to sort of promise fire and fury when you're not necessarily going to be able to follow through.

BASH: And that's -- that's the -- the sentiment that we heard from Senator John McCain, who's the chairman of the Armed Services Committee. Listen to what he said about the president's statements.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), ARIZONA: I take exception to the president's comments because you've got to be sure that you can do what you say you're going to do. In other words, the old walk softly but carry a big stick.

(END VIDEO CLIP)

BASH: He loves to quote T.R.

ABBY PHILLIP, "THE WASHINGTON POST": What's interesting about what Trump did yesterday was that the red line that he drew was actually at the point of threats, which is one of the things that surprised people. That he basically said to North Korea, if you make threats toward us, we will respond. The problem is, North Korea makes threats virtually every day. So if you're going to draw a red line, a lot of people said, that's really not the place to draw it, otherwise you're going to end up doing exactly what Trump says he doesn't want to do, which is -- which is say that he's going to have -- there are going to be consequences for actions and then not follow through on it. So --

SHEAR: And the difference was, this is our leader, right?

PHILLIP: That's right, hours later, yes.

RYAN LIZZA, "THE NEW YORKER": This is why there's no way that this was a well thought NSC approved policy. The president's -- I mean that's the absurdity of what he said. He was basically saying, we're going to nuke you if you threaten us verbally, which North Korea has been doing this for decades. And within an hour, they threatened Guam.

SHEAR: They did it again.

LIZZA: And so now he -- and that's why you have Lindsey Graham going on TV trying to clean it up and saying, oh, what the president actually meant, the red line is actually miniaturized nukes on a missile that could reach the United States. Well, that's not what the president said. So that -- and so other countries are looking at that and saying, well, his threat is meaningless.

KAROUN DEMIRJIAN, "THE WASHINGTON POST": Obviously --

BASH: You know -- go ahead.

DEMIRJIAN: You've got to define what fire and fury actually is. I mean --

LIZZA: I don't think we know.

DEMIRJIAN: Well, I mean, is it that we're actually going to fire off a nuclear warhead, because that sounds like a very dramatic thing that probably nobody in his administration would approve. But short of that, are we going to take a preemptive strike against North Korea, which opens up South Korea to some sort of attack by Pyongyang? Would we try to just use the THAAD interceptors that we have in Guam, which would actually be the first time that they've been used to intercept any sort of nuclear attack? Because they've been used in test scenarios but not like this. I mean it could mean so many different things.

BASH: Or does he need to define it? I mean, you know, this could be one of those cases, like he said a million times in the campaign, why would we tell our enemies exactly what we're go to do, keep them guessing.

On the idea of kind of deescalated rhetoric, I was with the vice president at the DMZ in April. And at the time the administration was kind of trying to find its footing and changing up the rhetoric along these lines saying diplomacy isn't working, we've got to fix it. This is the way he framed it then. (BEGIN VIDEO CLIP)

MIKE PENCE, VICE PRESIDENT OF THE UNITED STATES: It was the policy of the United States of America, during prior administrations, to practice what they called strategic patience. And that was to hope to marshal international support to bring an end to the nuclear ambitions and the ballistic missile program of North Korea. That clearly has failed. And the advent of nuclear weapons testing, the development of a nuclear program, even this weekend to see another attempt at a ballistic missile launch, all confirms the fact that strategic patience has failed.

(END VIDEO CLIP)

BASH: Now those were North Korean troops behind him, so he didn't talk about fire and fury and everything like that. But, you know, he does have a point. And I thought, you know, at the time that I went to the region with the last Republican vice president, Dick Cheney in 2006, and he was talking about the six-party talks. Didn't work. The Obama administration tried diplomatic policy. It didn't work. The Clinton administration before them. So they do have a point that changing it up, I mean, why not?

[12:10:05] PHILLIP: Yes. I mean I think that, look, they're right to say, to your point, that nothing has worked in the past. That is true. We are at this point because nothing has worked.

The question is, are we proceeding forward with a clear strategy? Perhaps there is a clear strategy among Trump's national security advisors. But the president going off the cuff and doing something that may or may not be a part of that strategy is really alarming in a situation when you're talking about nuclear warfare here.

BASH: No question. The other theory is that maybe this is a theory being ascribed to, a statement kind of ipos facto, but let's just go with it for a second, that the president was trying to send a signal to China that, you know, you've got to step up here. You know, if you don't do this, this is your backyard, it's your region. You know, if this really gets out of hand, it's going to be your problem.

LIZZA: So escalating tensions so that the Chinese would say, well, wait a second, this -- this is getting out of hand. OK, we -- maybe we should do x, y and z.

BASH: We'll step in.

LIZZA: If that was the strategy, it probably -- the statement probably would have been a little bit more well thought out.

I think this is one of the reasons why all of the focus on White House chaos and whether the chief of staff is strong or not and all of this dysfunction in this White House, that sometimes we in the press get attacked for as just, you know, soap opera or gossip. But this is why that stuff matters. Having a well-functioning White House with a good process produces presidential statements that are clear and effective and have a strategy behind them. When you don't have any of that, you have the president just going out there and seeming to wing it.

BASH: All right, guys, we have a lot more to discuss. Don't go anywhere. You don't go anywhere.

We are -- guys, let me -- OK, we are going to go to break. We're going to talk up next about the fight inside the walls of the White House spilling on to editorial pages of prominent conservative media. And it all has to do with something that we've been talking about, a critically important issue, the president's approach to foreign policy. We'll tell you what it's about after a break.

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[12:16:09] BASH: As tensions heat up with North Korea, there's a tug of war inside the West Wing that has big implications for how the president will approach that rogue regime and many other global threats. The president's chief strategist, Steve Bannon, who has a nationalist point of view, is at odds with National Security Advisor H.R. McMaster, who has a more internationalist approach. It is playing out on key issues, like the U.S. policy in Afghanistan and it's also continuing to play out in conservative media.

This morning, "The Wall Street Journal's" conservative editorial board is ripping Bannon, along with his allies like breitbart.com for going after McMaster with attacks like these. "The former Breitbart publisher has been a White House survivor, but his warring habits have also been responsible for much of the White House dysfunction." Policy brawls are routine in any White House, and Lt. Gen. McMaster can surely handle his corner. The key issue for Mr. Kelly," speaking of the chief of staff, "and Mr. Trump is what to do when disagreement inside the White House turns into vilification of his staff from the outside."

Ouch. This is the first time that I've seen a prominent conservative outlet, you know, the editorial page of "The Wall Street Journal," kind of beat back against the skewering that H.R. McMaster is getting from Breitbart and conservative radio. I've been listening to it, you know, just in the car coming down here. I mean it's day after day after day of going after McMaster for lots of reasons.

LIZZA: It's like somebody flipped a switch and all of a sudden all of these outlets aligned with one side --

BASH: There you go. You can see Breitbart on the screen.

LIZZA: Of the faction just -- and not just on policy, it's personal. It's -- look, it's just -- it's almost like an opposition research campaign from certain segments that are associated with Bannon going after this White House rival. And it seems to have come after McMaster made some moves, personnel and policy, that Bannon was upset about.

BASH: Right.

SHEAR: Well, and I think to Ryan's point, like earlier about there are -- there's ways in which these stories all, you know, connect together. And, you know, when you see the kind of, you know, really important and really scary North Korea situation involving the potential for nuclear conflagration, and at the same time you have a real, you know, tension erupting over the very person inside the White House who's supposed to be coordinating the response to issues like that. That's where, you know, concern about, you know, division within the people that are sitting around that table in the situation room is, you know, really has the potential to undermine the effectiveness that the president brings to these situations.

BASH: And amplified by the fact that this president didn't come into office with a very specific world view. I mean he certainly played up the nationalist point of view during the campaign. It helped with the base. But it's not clearly defined.

SHEAR: Right.

PHILLIP: That's why this dispute is so important internally and perhaps to Bannon because one of the complaints about H.R. McMaster from the conservative wing is that essentially he is disloyal. He is like a representative of the deep state within the White House itself.

BASH: Exactly.

PHILLIP: That's a really significant charge against someone who is currently the national security advisor. But it reflects the seriousness of the dispute. They believe that McMaster does not have the president's sort of ideological framework in mind, which is why this is such a pitched battle. It's not just about whether H.R. McMaster is firing people or not. It's about whether H.R. McMaster represents a sort of normalization or a -- of Trump that goes against everything that Bannon has been pitching to the conservative base for a year and a half now.

DEMIRJIAN: The problem though is that there's collateral damage as this takes -- as this dispute kind of keeps going because not everything, not every foreign policy matter can fit into the nationalist -- nationalistic ideology in laying it down when you're dealing with things like North Korea. It's kind of like personality is guiding this first before policy and you're losing the policy in the shuffle because there's so much sniping happening on the personal level that has to do with things, you know, going back to immigration, other matters that really are at the core of the ideology and nobody is thinking about the bigger picture. And the bigger picture is pretty darn existential right now.

[12:20:17] BASH: It is. And I think that that instead -- and I think that bears repeating, this is not a, you know palace intrigue story about who's up and who's down. This is a fundamental question of which direction this administration, this president is going to go on foreign policy.

I want you all to stand by. We're going to switch topics and talk about new details that we have coming in on the Russia investigation. FBI agents raised the home of President Trump's former campaign chairman Paul Manafort. And a source says the raid came late last month, a day after he met with the Senate Intelligence Committee.

Our CNN justice reporter, Shimon Prokupecz, is with me now.

And, Shimon, you've been talking to your sources about this. What are your hearing?

SHIMON PROKUPECZ, CNN CRIME AND JUSTICE REPORTER: Yes, that's right, Dana. It certainly came as a surprise to many. The search warrant was executed, as you said, you know, at the end of last month and certainly appears to be an escalation of this investigation.

It was FBI agent and lawyers working for the special counsel's office who appeared at Mr. Manafort's Alexandra, Virginia, home. They were there to search, look for documents. And as we all know, the special counsel's office is investigating the Trump campaign, including the one-time chairman of the campaign, Paul Manafort.

But, Dana, this appears -- you know this raid appears to be sort of beyond the campaign investigation and has to do with, you know, this red line we've been talking about. This sort of, you know, Mueller's office crossing this red line, looking at finances of people around the campaign, and even some of Trump's family members.

We're told FBI agents removed financial and tax documents. And keep -- also some of this Manafort has already given to the Senate Intelligence Committee. We're told this was quite an unusual tactic for a white collar investigation, especially one that has been ongoing for quite some time and with a subject of the investigation who has been willing to cooperate. And by all accounts, Dana, this appears to be a tactical move by the special counsel's office.

BASH: It sure does. Thank you so much for that reporting, Shimon.

And, look, I mean, we're all rightly focused on what the president said about North Korea. Robert Mueller has a singular job to do and he is not getting away from that focus despite, I'm sure, much, much, much to the chagrin of the president of the United States. And this raid makes that very clear.

LIZZA: Yes. I mean -- go ahead. Go ahead.

DEMIRJIAN: Yes, I was just going to say, I mean it makes it -- he's doing one of two things. Either they don't trust that Manafort is going to be complying to the full extent of all of these subpoenas to get these documents and information, or Mueller wants to show everybody who's under investigation who is boss and use as an example to everybody beyond Manafort as well of, if you do not comply, I am not afraid to take fairly extraordinary measures. A predawn raid is about as dramatic as it gets.

BASH: And Shimon mentioned red lines. And to our viewers at home, I'm sure, if you're confused about which red line applies to which story, we get it. So in this particular issue and this particular context, it is the president saying, if the special counsel starts looking into my finances, that's a red line.

LIZZA: Yes.

BASH: Go ahead.

LIZZA: Well, and also one of the questions that's hung over this investigation is, has Mueller gotten anyone to sort of flip, right? Has Mueller gotten anyone to say -- to -- found other crimes maybe even unrelated with the Russia investigation, say, hey, we'll go soft on that if you tell us what you know about the core investigation. And a lot of people have speculated, if you were going to try and flip someone, it would be Michael Flynn, who was very close to Trump and the leadership of the campaign, or Manafort, who ran the campaign. And I don't know enough about -- about what -- why you use a raid to squeeze someone or not, but maybe it suggests that Manafort hasn't taken that step yet, you know, that he's not actually cooperating as much as we all thought if they felt like they needed to be this aggressive.

BASH: And meanwhile, at the White House, that you guys, you know, both cover daily, the question is how -- I mean when they see something like this, I know Manafort was briefly in the campaign, but, you know, it's --

LIZZA: Yes.

BASH: How much do they say, uh-oh, are they coming for my house next?

PHILLIP: Well, to Ryan's point, one of the things that my colleagues reported earlier this morning on this story was that the Manafort camp believes -- some in that camp believes that what Mueller is trying to do is build a completely separate case against Manafort that would basically put the squeeze on him to flip in the case of the Russia investigation. Which if that were the case, that would be really extraordinary and it would be very alarming to the White House because there is the real possibility that that -- that Mueller is driving at whatever means necessary to get witnesses in the Russia investigation to provide evidence and information.

And, you know, I think that Manafort is also provide -- has a key moment in the campaign, which is that meeting with the Russians during the campaign with Don Jr. Apparently he had notes of those meetings. That's all being looked at by the special investigator.

[12:25:10] BASH: Yes, I mean, and let's -- let's, you know, sort of be clear, Paul Manafort, historically, way pre-Trump, is the person who had the most ties, business ties, to Russia. So --

SHEAR: And one other -- just one other quick thing I will say is that in terms of reaction inside the White House, that morning of the raid, several hours later, was when Donald Trump started tweeting again about Andrew McCabe at the FBI.

BASH: Oh, that (INAUDIBLE).

LIZZA: Yes.

SHEAR: And that was the morning -- and that was the morning of the transgender tweet. Which may well have been a desire to change the subject. BASH: And that was a good plus point. Thank you.

Coming up, President Trump faces fallout from lawmakers over his fiery warning to North Korea. Up next, we'll tell you how the Trump team is responding.

(COMMERCIAL BREAK)

[12:30:04] BASH: President Trump certainly has the world's attention thanks to his fiery warning to North Korea. Here's a reminder of what he said after it was reported that the regime is now believed to have the technology