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Cohen Claims Provokes Denial; Trump Team Denied Advance Knowledge of Meeting; Economic Numbers Grow. Aired 12n-12:30p ET

Aired July 27, 2018 - 12:00   ET

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

(COMMERCIAL BREAK)

[12:00:11] JOHN KING, CNN ANCHOR: Welcome to INSIDE POLITICS. I'm John King. Thank you for sharing your day. It is a very newsy Friday.

A dramatic new confrontation between the president and his long-time fixer. Sources telling CNN Michael Cohen now prepared to testify candidate Trump had advanced knowledge of that now infamous Trump Tower campaign meeting with Russians. Not true, the president tweets.

Plus, Vladimir Putin showers new praise on Mr. Trump and says he's ready and eager to meet again, in Washington or in Moscow.

And the economy roared into higher gear in the second quarter, and the president raced to celebrate.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I happen to think we're going to do extraordinarily well in our next report, next quarter. I think it's going to be outstanding. I won't go too strong because then if it's not quite as good, you'll not let me forget it.

(END VIDEO CLIP)

KING: Back to the economy in a moment. But we begin with two pressing questions, who is lying and why now? The president, who bends and breaks the truth daily, finds himself locked in a credibility cage match with his former lawyer and fixer. Michael Cohen, CNN is told, prepared now to tell Special Counsel Robert Mueller that the president knew in advanced about a 2016 Trump Tower meeting with Russians who promised dirt on Hillary Clinton. The president this morning tweeting he did not know about the meeting, and he says Cohen making up stories because he's in a legal bind. Whoever is lying, well, the special counsel likely already knows, already knows who knew what when.

Sources say Cohen has no evidence to corroborate his claim. He does say others know, though. The Trump Tower meeting was, despite all the president's denials, cooperation, you could say collusion with the Russians. The question is, was it naive or was it nefarious? That is a question for Mueller and his investigators. And it's important to remember they already have testimony from dozens of witnesses, phone records, text messages, e-mails that point to the truth, point again to the big question, who knew what when. Why Cohen chose to tell others he's willing to share his recollection

with the special counsel now, well, that's beyond curious. Saying Trump knew in advance is a switch from what Cohen told congressional investigators. So he's calling his own credibility into question at a time he's hoping for some kind of deal or leniency from the feds. But if the goal was to rattle the president and provoke a tweet fight, well, then, mission accomplished.

CNN's Jeff Zeleny is over at the White House on this dramatic day.

Jeff, take us inside the president's tweet and how they feel about this inside the West Wing.

JEFF ZELENY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Well, John, it is a week of good news and bad news for the president. There's no doubt that that economic news that he was trumpeting this morning is indeed very good news. Any president would have done that, walked on the South Lawn and delivered that.

But, boy, what else is going on inside the president's mind and indeed inside the halls of the White House here are much more than about the good economic news. It's also about what's going on in these variety of investigations.

You saw the president, he's really been holding his tongue all week long. Again today, the third day in a row, not answering questions about if he -- what he feels about Michael Cohen, betraying him. Of course, he's his long-time confidant, his protector. Now he's anything but that. But, John, it still goes back to that meeting. Everything seems to go back to that meeting in June 2016 in the Trump Tower, did the president know, did he not? Michael Cohen, of course, now saying through sources, we're reporting that he did know about that meeting. The president always saying he did not.

We do not know how this will be resolved publicly, but as you said, a high likelihood that Special Counsel Bob Mueller already knows the answer. Certainly much more information than we have.

But, John, the White House would like to celebrate this economic news, but it is still, despite a sunny day here in Washington, that cloud of these various investigations hanging over the president. We'll have one more opportunity to try and ask the president questions this afternoon when he goes to Bedminster, New Jersey, for a weekend there. We'll see if the president answers any questions or not. We don't know the answer to that, but he has yet to talk publicly at least about Michael Cohen.

And, again, a self-inflicted wound, if you will, because the president has had him as his long-time protector in spite of all this otherwise which would be a sunny, good news day here at the White House, John.

KING: I'm going to place what I think is a safe bet the president's lawyers would prefer the president not say anything publicly about this.

Jeff Zeleny live for us at the White House. ZELENY: (INAUDIBLE).

KING: Amen for that.

Appreciate it, Jeff.

Here with me in studio to share their reporting and their insights, Eliana Johnson of "Politico," CNN's Manu Raju, Olivier Knox with Sirius XM, and Jackie Kucinich with "The Daily Beast."

This is a big deal. You got to say right up front, the president often wanders far from the truth. Michael Cohen often wanders far from the truth. If you knew Michael Cohen back in the days of the Trump Organization, his relationship with reporters, very combative, often fact free. So the question now is why? Why is Michael Cohen -- we know the president hasn't reached out to him. He feels betrayed by the president. Why is Michael Cohen saying, I will cooperate with the special counsel and I will say, and this would be a very big deal if you can corroborate it, the president knew in advance the president news in advance about that meeting. Why now, and can he be believed?

[12:05:20] ELIANA JOHNSON, WHITE HOUSE REPORTER, "POLITICO": This is a tricky one, I think, because both of these guys are on the record already having fudged the facts about this. Michael Cohen not having disclosed this to Congress, and so he will have been caught lying under oath essentially, or at least not disclosing this under oath. The president and his team already clearly having fudged the facts at the very least about Don Junior and what he knew about the meeting, issuing that statement afterwards. So this is like a battle between two people who have zero credibility. So at the very least I think Michael Cohen is going to have to surface somebody else or some sort of document or tape that backs him up on this before he really backs the president against a wall.

KING: And another example of this dramatic moment in the sense that Michael Cohen, for years, did all the president's work. Some would call it dirty work, taking care of things, fixing things, getting them done. When they thought Michael Cohen was going to be loyal when he came under investigation, the White House had no worries. Now, listen to Rudy Giuliani's then and now.

(BEGIN VIDEO CLIP)

RUDY GIULIANI, PRESIDENT TRUMP'S LAWYER: The man is an honest, honorable lawyer.

I don't see how he has any credibility.

There's nobody that I know that knows him that hasn't warned me that if his back is up against a wall, he'll lie like crazy because he's lied all his life.

(END VIDEO CLIP)

KING: He's lied all his life, but just a month before that he was an honest , honorable lawyer. MANU RAJU, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Just a few weeks

ago. It's pretty remarkable.

Look, I think one of the ways that we can test who's telling the truth is who's willing to say that under oath. I mean if Cohen does go forward and say this under oath, will the president also say something opposite or in his view point under oath or will he say something different?

I do think that it does raise a lot of questions. You mentioned what did Michael Cohen disclose to the -- to Congress. Almost certainly he was asked about this in his House Intelligence Committee interview that was not disclosed in their report. But the Republican report and the Democratic report, presumably if he said the president had knowledge of it, Democrats would have noted that in their report. So that was not -- not included.

And it also raises big questions about what Donald Trump Junior said to Congress in the transcripts released by the Senate Judiciary Committee. He said that he did not tell his father about this meeting in advance of the meeting. And when asked about those blocked phone calls that he placed three calls before and after the meeting, he said he did not know if those were his father's -- that was his father who called on the other side of the line. So those are also big questions for him going forward.

KING: And to that point, before you jump in, just because he mentioned this, I just want to put that -- that, again, in this story, where there are no clean actors, everybody raises your doubts or suspicions in some way, I'm absolutely sure my father didn't know. Well, who was the blocked call from before and after? I don't know. So you know except when you don't know. Here's the question, does your father use a blocked number on his cell phone or any phones that you call him on? I don't know. So you don't know whether or not this might have been your father? I don't.

JACKIE KUCINICH, WASHINGTON BUREAU CHIEF, "THE DAILY BEAST": You know, I have to say, Michael Cohen had to have seen this coming. This -- you know, all of a sudden he's, you know, a liar and a cheat. Paul Manafort doesn't even exist at this point. I mean he was the --

KING: For trump, you mean.

KUCINICH: Yes, Trump.

KING: Yes, he was that guy who was around for a couple weeks.

KUCINICH: He was that guy who was sort of there. I mean no one really knew his name. Sam? Sam Manafort? Is that his name? I mean, seriously, they've done this with other people with the exception of Michael Flynn. He is someone they still acknowledge is on this earth. That said, everyone else who has -- who has gotten in trouble, who has crossed them, who seems to have flipped, out the door.

KING: Well, they don't have any public knowledge, at least public knowledge, they may know privately, what Flynn has told the special counsel. That's probably one of the reasons the loyalty exists.

KUCINICH: That's true, but I -- I mean in their public statements. Yes.

KING: Loyalty still exists because they have no -- at least there's no public evidence that Flynn has given damning information about the president himself.

I'm sorry, go ahead.

OLIVIER KNOX, CHIEF WASHINGTON CORRESPONDENT, SIRIUS XM: First, happy anniversary of the president asking Russia if they can find Hillary's e-mails.

But, also, I think at least as important as Cohen saying the president had advanced knowledge is the fact that he says others can corroborate this story.

KING: Right.

KNOX: And that's -- that's very important. And it goes back to what we don't know about what Bob Mueller knows. Does he have documented evidence? Can he already essentially corroborate what he's claiming? I think that's (INAUDIBLE).

And I also -- I want to point out, Michael Cohen has stage managed this kind of in an interesting way. In his interview with George Stephanopoulos, he very conspicuously declined to say whether the president knew about this meeting. And then he's been sort of tiptoeing ever closer to this line. And now he's finally sort of given this -- apparently given this reveal.

KING: Right. And to your point about Michael Cohen says there are others who knew. We know the special counsel has been at this for months. I will give you one name and I think it's central to this and many other of these unresolved questions, Hope Hicks, who was at the president's side throughout the campaign when these things -- when the meeting was happening, who was at the president's side on Air Force One when they had the phone call with Donald Trump Junior about issuing a statement to "The New York Times" that was not factually correct, if you will.

Again, if this -- if your memory is a little blurry on this because so many things happen in this investigation and this administration, June 2016, Donald Trump Junior takes a meeting with Russians who promised dirt on Hillary Clinton. Several other top campaign, Paul Manafort included, Jared Kushner included, are brought into the meeting. This has been asked about a lot of times, who knew about it in advance? Did the president know about it in advance? Here's a little bit of the history.

[12:10:16] (BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: When did the president learn that that meeting had taken place?

SARAH SANDERS, WHITE HOUSE PRESS SECRETARY: I believe in the last couple of days, is my understanding.

UNIDENTIFIED MALE: Did you tell your father anything about this?

DON TRUMP JUNIOR, PRESIDENT TRUMP'S SON: No. It was such a nothing. There was nothing to tell.

UNIDENTIFIED MALE: Let's focus on what the president was aware of. Nothing. The president was not aware and did not attend this meeting.

He said he has no -- had no meetings, was aware of no meetings with Russians, was not aware of this one until really right before it all broke. And that's what the president has said.

UNIDENTIFIED MALE: Did you know at the time that they had the meeting?

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: No, I didn't know anything about the meeting.

(END VIDEO CLIP)

KING: And there is zero wiggle room here for the president. This is not one of those things where he meant this, if it turns out that Cohen's telling the truth now and that there's others who corroborate that and the president did know about it in advance, then there's no way to wiggle out of that one.

JOHNSON: So the question to me sort of is, what's the worst-case scenario for the question -- for the president, excuse me? You know, let's say he did have advanced knowledge of this meeting and it's proven indisputably. So the president is caught in a lie. His lawyers are caught in a lie. His children are caught in a lie. That's happened quite a few times before.

Collusion is not a criminal offense. And so I sort of wonder, you know, what will the upshot of that be? And that, I think, is sort of an interesting question to ponder. The president can't be indicted for that. He can be impeached for it. But I do sort of wonder whether House Republicans or if Democrats take over after November will move to impeach the president for having advanced knowledge of a meeting that we're not quite sure whether anything came out of.

RAJU: And also the way that it came out and whether the president tried to essentially cover up what happened, we know that he dictated that statement while on Air Force One about when "The New York Times" first reported about -- on this. They initially denied that he had any role whatsoever at the White House and Jay Sekulow also denied that and it turns out that he did dictate that statement. So, I mean, it goes to the president did know about this ahead of time and he -- they denied that. Maybe, you know, this --

KING: Right, how does this fit into the bigger story and the other potential mistruths, distortions, and the like I think is the bigger question here.

RAJU: Right.

KING: But, still, dramatic to see, just to your point, Michael Cohen's evolution, shall we call it, in recent days.

Up next for us, big economic news that should boost the president and the Republican Party, but what does it mean for your wallet as the president says his tariffs aren't going away any time soon.

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[12:16:46] KING: Welcome back.

Gangbusters economic news today. The government reports the economy grew at a 4.1 percent rate last quarter, the fastest growth rate since 2014. The president quickly adding a White House event to celebrate. He says his big tax cut and his war on regulations are big reasons. The big question is, can this boom last? CNN's Christine Romans first breaks down the numbers.

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: John, the American economy roared back in the spring from its first quarter lull. It was the strongest quarter since 2014 when the economy grew 5.2 percent under President Obama. President Trump says this quarter was not an anomaly. In fact, he is promising 3 percent plus annual GDP growth for the year.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: As the trade deals come in one by one, we're going to go a lot higher than these numbers. And these are great numbers.

These numbers are very, very sustainable. This isn't a one-time shot.

(END VIDEO CLIP)

ROMANS: It would take another two very strong quarters to get there. You know, gross domestic product, John, is the broadest gauge of an economy's health. It shows in the second quarter consumers dug into their pockets. They bought more. Companies invested more in plants, technology, and equipment. The government spent more on defense. This strong quarter reflects an economy in excellent shape. Unemployment is low, companies are enjoying record profits and lower tax bills, and exports -- exports are surging. In fact, exports rose more than 9 percent.

But, John, for an interesting reason, Morgan Stanley says soybean shipments surged some 9,000 percent in a rush of stockpiling before farm tariffs kicked in. The tariff threat boosted exports in the second quarter, but economists expect tariffs to drag on growth after that.

The big question now is, can all this hot growth last? The president says it can. But the effects of tax cuts will begin to fade later this year. Higher interest rates could depress consumer spending. The big word today is sustainability. Can this strong growth continue?

John.

KING: Thank you, Christine.

And let's try and answer that question with our panel.

Erica Werner is congressional economic policy correspondent for "The Washington Post," Craig Ip is chief economics commentator for "The Wall Street Journal." This is the big question. This is great news. And it's great news for the president. We'll see if it turns out to be any good news or better news for the Republican Party in a tough election year. But for Americans out there at home, a strong economy is good. Is it as sustainable as the president wants us to believe?

ERICA WERNER, CONGRESSIONAL ECONOMIC POLICY CORRESPONDENT, "THE WASHINGTON POST": Most economists say that it's not. They expect that this quarter, the over 4 percent GDP growth, will not be replicated in the next quarter. But it's important to note, of course, that the timing of this really could not be better for Republicans heading into the midterms. So the next quarter numbers are going to come out just 11 days before the midterms. That won't be enough time to change the narrative, which now is strong economic news.

KING: Strong economic news.

And as you jump into the conversation, I just want to show this scorecard because, again, the president always says he doesn't get enough credit. Some of this started under Obama. There's no question the tax cuts and the deregulation of the Trump administration have helped. They've added fuel to the fire, if you will. GDP growth, 4.1 percent for the quarter. The unemployment rate of 4 percent. Consumer confidence near a 14-year high. So whether you voted for the president, whether you're a fan or not, he does have reason to brag today.

[12:20:00] GREG IP, CHIEF ECONOMICS COMMENTATOR, "THE WALL STREET JOURNAL": Absolutely. I mean, yes, 4.1 percent growth is itself unsustainable. But if you look below the details, you ignore the export stuff, you have consumption growing around 4 percent. Very strong growth for business investment. It looks to me like the underlying trend is around 3 percent and that that will continue through the third quarter.

Can the president take credit? That's the $65,000 question. The tax cut was supposed to help business investment, and we're getting strong business investment, but maybe a lot of that is just because oil prices are up, and so there's a lot of drilling going on. If you look at some of the other numbers like how much equipment are people buying, that seems to have actually tapered off a little bit. But these little nuances aren't going to matter much either to the president or to voters. It is still underlying all that, a very good, solid picture.

KING: Right. And just to add a little context, that sometimes the president likes to and sometimes he doesn't. We've got to look at this -- this is not -- this is a great quarter. The president deserves every right.

But we have seen this before. If you go back to the Clinton administration, you had quarters with 7.8 percent growth. The George W. Bush administration, 6.9 percent. Obama had a high of 5.2 percent. This president's high -- this president's high right now, 4.1 percent.

The question again is the sustainability. And to the big -- to that big question. You heard Christine talk about how some of the soybean exports boomed because those farmers were like, OK, the tariffs are coming, let's get this out of here now. Is there any evidence -- or when will we have any evidence of if this trade, call it what you will, skirmish, war, will smother the growth?

WERNER: Well, it is very ironic, really, that the trade war, which a lot of corporations and economists are very worried about, in fact, contributed to the strong growth in this quarter because of the stockpiling that Christine was talking about. So, you know, it's difficult to predict where that goes. The deal that the president struck with the European Union, although, you know, we don't know really what it's going to mean, is that going to be replicated, that kind of came out of nowhere. So those things are hard to predict.

KING: It's a deal -- the deal is to talk about a deal.

WERNER: Right.

KING There's no specific deal. Ad you heard the president saying when those trade deals come in. He's been saying that for 18 months.

IP: And I would also say that thus far businesses are very worried about the uncertainty about the trade war, but that doesn't seem to have affected their actual behavior yet because as the economists keep telling us, the actual numbers don't add up to very much in a $20 trillion economy.

In terms of the sustainability, the outlook elsewhere for things to worry about, one of them is the fact that obviously one of the reasons people are spending a lot of money is they just got a big tax cut. Unless they get another big tax cut next year and the year after that and the year after that, that's got to slow down.

The second problem is, we are running out of people. A big reason that growth has been so strong is we keep adding 200,000 jobs per month. At the rate our population is growing, that is not sustainable, especially if we go ahead and restrict immigration.

KING: If you're Jerome Powell and you're chairman of the Fed, you look at this data and you think, I'm right, we're going to keep gradually -- we have to keep gradually increasing interest rates. That's what the data says. This is what the president says.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I'm not thrilled because, you know, we go up and every time you go up they want to raise rates again. And I don't really -- I am not happy about it. But at the same time, I'm letting them do what they feel is best. But I don't like all of this work that goes into doing what we're doing.

(END VIDEO CLIP)

KING: Is it a safe bet that the Fed follows the numbers and continues the policy? Or does the Fed get intimidated by the president at all?

WERNER: Well, no. The expectation is that the Fed will, despite the president's unusual intervention there, maintain its traditional independence.

KING: A very polite way to say it. I like that.

IP: I don't think the Fed does anything differently as a result of the comments.

WERNER: Right.

IP: I think the president just hurts himself because there's going to be Fed officials who are saying, gosh, I was torn between going once more this year and twice more this year, but now I have to show I'm independent, so maybe I'll go twice more.

But if you look at the numbers, I think, you know, that, you know, Trump really stepping aside from all that rhetoric, he should be like delighted. He has this really strong economy and like incredibly low interest rates than a Fed chairman who has said publicly he doesn't want to stamp out this growth. He wants to get unemployment lower. What more could you ask for?

WERNER: Well, the president has asked for 5 percent and 6 percent growth. In fact, that's what he predicted or called for during the campaign. Those numbers are highly unlikely to emerge.

KING: Highly unlikely, but still a day for the president so celebrate.

Erica, Greg, appreciate your coming in.

Up next for us here, an offer the president has not refused.

(COMMERCIAL BREAK)

[12:28:55] (BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Russia, if you're listening, I hope you're able to find the 30,000 e-mails that are missing.

(END VIDEO CLIP)

KING: A little flashback Friday. That unforgettable moment exactly two years ago today. And now, today, well, the love fest between President Trump and Russia's Vladimir Putin is again front and center. President Putin today heaping new praise on his American counterpart and saying he's ready -- ready for more summitry.

(BEGIN VIDEO CLIP)

VLADIMIR PUTIN, RUSSIAN PRESIDENT (through translator): We are ready for such meetings. We are ready to invite President Trump to Moscow to be my guest. He has such an invitation. I've told him that. And I'm ready to go to Washington. I repeat once again, if the right conditions for work are created.

(END VIDEO CLIP)

KING: Now, remember, there was giant Republican blowback when President Trump suggested a second summit this year here in Washington just before the midterm elections. So the White House pulled back and said any meeting would have to wait until after the new year and after the Russia meddling investigation ends. Still, the White House is responding warmly to president Putin's offer today. This from the White House Press Secretary Sarah Sanders, quote, President Trump looks forward to having President Putin in Washington after the first of the year, and he's open to visiting Moscow upon receiving a formal invitation.

[12:30:11] So the reviews of Helsinki were horrible.