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Trump Digs in Over Taxes as Clinton Slams Him; Tim Kaine, Mike Pence to Face Off in V.P. Debate; RNC Ad Attacks Tim Kaine on Capital Punishment. Aired 7-7:30a ET

Aired October 04, 2016 - 07:00   ET

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

[07:00:04] ALISYN CAMEROTA, CNN ANCHOR: All this as Donald Trump attacks the political fire storm over his taxes, touting his own financial brilliance, and possibly avoiding federal taxes for nearly two decades.

Hillary Clinton, though, slamming her opponent as the king of greed, accusing him of taking from America with both hands.

CNN's Phil Mattingly has a lot to talk about. He's live in Farmville, Virginia, the site of tonight's vice-presidential debate. Hi, Phil.

PHIL MATTINGLY, CNN CORRESPONDENT: Hey, Alisyn. In an election year that is running increasingly low on days until the actual voters go to the polls, Donald Trump's taxes are all anybody's talking about. Whichever candidate gets the upper hand on this issue, they may very well win the White House.

(BEGIN VIDEOTAPE)

DONALD TRUMP (R), PRESIDENTIAL NOMINEE: I understand the tax laws better than almost anyone, which is why I am the one who can fix them.

MATTINGLY (voice-over): Dangerous campaign liability or political opportunity?

TRUMP: I have brilliantly used those laws.

MATTINGLY: Donald Trump hoping for the latter after the leak of a few pages of his 1995 tax return. Attempting to turn the fact he may not have paid federal income tax in years into a testament of his business expertise.

TRUMP: As a business person, I've legally used the tax laws to benefit -- really, I mean, it's to my benefit, and to benefit my company, my investors, my employees. My family.

MATTINGLY: The Clinton campaign attempting to undermine Trump's spin.

HILLARY CLINTON (D), PRESIDENTIAL NOMINEE: Some of his supporters said, "Well, it just shows he's a genius that he didn't pay any taxes." What kind of genius loses a billion dollars in the first place?

MATTINGLY: Painting the Republican nominee as representing the same system he claims he's going to change.

CLINTON: Trump was taking from America with both hands and leaving the rest of us with the bill.

MATTINGLY: Trump trying to downplay the near billion-dollar loss "The New York Times" reported he had leading up to 1995.

TRUMP: The conditions facing real-estate developers in the early '90s were almost as bad as the Great Depression in 1929 and far worse than the Great Recession in 2008.

MATTINGLY: While casting himself as the comeback kid.

TRUMP: I used the tax laws of our country and my skills as a business person to dig out of this real-estate depression when few others were able to do that. I did a great job.

MATTINGLY: This as Trump sparks new criticism after suggesting that veterans suffering from PTSD lack strength.

TRUMP: When people come back from war and combat, and they see things that maybe a lot of the folks in this room have seen many times over. And you're strong and you can handle it, but a lot of people can't handle it.

(END VIDEOTAPE)

MATTINGLY: And guys, that's a comment that really flies in the face of a central tenant of how to treat posttraumatic stress that doctors have figured out over the course of the last decade.

But still, the Trump campaign pushing back, saying that comment was taken out of context. And among those pushing back, the Marine staff sergeant who actually asked Trump the question about treating posttraumatic stress that elicited that response. So they feel comfortable that they're on safe ground when it comes to what he had to say -- Chris.

CAMEROTA: I'll take it, Phil. Thank you very much for that preview.

The first and only vice-presidential debate gets under way in just hours. Senator Tim Kaine and governor Mike Pence are ready to face off in Longwood University in Virginia. That's where we find CNN's Sunlen Serfaty. She's live in Farmville with a preview of that for us.

Hi, Sunlen.

SUNLEN SERFATY, CNN CORRESPONDENT: Good morning to you, Alisyn.

Well, both candidates, they really seem to be taking a much more disciplined, much more consistent approach as they prepare for this debate. That's certainly notable for Mike Pence, because he's preparing in a much different way than his own running mate, Donald Trump. Engaging in a more traditional debate prep. We know that both candidates, Mike Pence and Tim Kaine, are running

through these full-fledged mock debates, practicing with their aides and using stand-ins to play their opponent.

And certainly for team Pence, first and foremost, top on their mind going into tonight is that they know that they're going to get questions and likely have to address the continued fallout over Donald Trump's tax returns.

Now, meantime, team Kaine certainly trying to cash in on some home- field advantage, this being the hometown of the former Virginia governor and senator from Virginia, Tim Kaine, where aides say he will likely be trying to really draw a distinct contrast as far as ideological differences between him and Mike Pence tonight. Certainly, this being their first and only debate, Chris, a lot here at stake.

CHRIS CUOMO, CNN ANCHOR: All right, Sunlen. Thank you very much.

Joining us now from the site of tonight's V.P. debate, chief strategist and communications director of the RNC, Sean Spicer.

Sean, thanks for being with us. Let's try and get a taste of what the state of play will be tonight. There's a new ad out going at Tim Kaine specifically. Well-timed to tonight's debate. Let's take a little look at it, and then we'll discuss its implication.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Percy Walton brutally murdered three people. As governor, Tim Kaine commuted his sentence, citing concerns disproved by the courts.

Jens Soring and his girlfriend murdered Derek and Nancy Haysom, stabbing them to death in their home. On his last day as governor, Tim Kaine tried to have Soring sent to Germany, where parole would have been possible in just two years.

(END VIDEO CLIP)

[07:05:17] CUOMO: This ad is being likened to Willie Horton ads from back in the day, although you did have some white defendants who were at play, as well. What's the point of this ad? What's the attack angle?

SEAN SPICER, CHIEF STRATEGIST/COMMUNICATIONS DIRECTOR, RNC: First of all, I think anybody who compares it to Willie Horton is -- either hasn't seen the ad or doesn't understand history. As you pointed out, the folks in the ad are all -- three of the four are white.

So this just goes back to Tim Kaine's record. I mean, there are rapists and murderers that he defended to keep out of prison that have done horrible things.

I think part of this is Tim Kaine had previously said that someone should be judged by the totality of their record. This is the Tim Kaine part of the record that they don't want to discuss. His defense of people who went out and murdered and raped people in the commonwealth of Virginia and elsewhere.

CUOMO: But he was a lawyer, Sean. That's a what lawyer does, is defend people's rights.

SPICER: No, no, no. But I think everybody makes choices in their careers to what they do and what they don't do. He wants to talk about his record, he should be judged on the totality of this record.

CUOMO: But Sean, I just want to understand the criticism. I just don't understand the criticism. We both agree, of course, you have the right to do whatever you want to do. You get judged for your choices.

So are you saying that people who commit crimes and are facing the death penalty shouldn't have lawyers?

SPICER: No, of course they do. That's a constitutional right. But there's a difference between advocating -- he went out and advocated and talked about and tried to get them off the hook for certain things.

CUOMO: Because he doesn't believe in the death penalty. Because he's a Catholic and has a moral opposition to the death penalty. And as an advocate of the law, he went out there and argued that. I don't understand how it's a criticism.

SPICER: He made a choice to go out and defend -- it's not just about the death penalty, Chris. It's about making sure that they served the least amount of time possible. That's a big difference.

And I think you know, it's amazing how quick everyone runs to Tim Kaine's defense. The fact of the matter is, is that his record, if you look at in its totality. He went out and defended people who committed heinous crimes, and he sought to get the lowest penalty for them. That's fine. He chose to do that. But he should be judged for it, as well. That's part of his record.

CUOMO: All right. It's certainly fair play. That's what politicians do. They play up what they think will be their positives, down play their negatives. I'm just trying to get your head on where this attack goes, this ad.

Then there's also this one that you guys are circulating around about him spending time with all this -- with this Marxist when he was down in South America. It was a priest. He was on mission, and he was spending time with this Catholic priest you guys are defining as Marxist.

I guess all priests are Marxists in some ways, I guess if you wanted to say that. But what's the point of that criticism?

SPICER: Again, I think part of this is to talk about his ideology and his record. Tim Kaine wants to whitewash what, you know -- just look at the last few years; and he doesn't want to talk about its totality. He doesn't want to talk about the fact that, when he was governor of Virginia, unemployment went up, taxes went up. There's a huge contrast.

And I think part of the problem is that the Clinton/Kaine machine only wants to talk about pieces of their record. They should be judged on the totality of it. The people that they hung out with, the choices that they made, and the people that they defended. So let's look at it all. And that's the point here.

CUOMO: Absolutely. That's your job, my friend, is you want to expose what you see as avenues of opportunity. How do you feel tonight it goes between Kaine and Mike Pence? Do you think Kaine is going to come at Pence for his conservativism on a cultural level, his resistance to rights for the LGBTQ community, his desire to try to keep out Syrian refugees out of Indiana, a court just telling him he can't do that. Conservative judges, by the way. Do you think that that will find its way into the debate?

SPICER: I think Tim Kaine is going and try to do everything he can to distract and distort from the real record.

The fact is the matter of what I just mentioned. I mean, look, when Tim Kaine was governor, taxes went up, unemployment went up. When Mike Pence has been governor of Indiana, unemployment's gone down, taxes have gone down. I think you're going to see a huge contrast in their records and a huge contrast in the tone.

I mean, Mike Pence and Donald Trump are talking about bringing change to Washington, ending the status quo and business as usual. Tim Kaine and Hillary Clinton are literally the epitome of the establishment and status quo.

If you're happy with Washington the way things are going with a government that's unresponsive, I think that you should vote for Hillary Clinton and Tim Kaine. They are literally every -- you know, they tout their experience, time in government, the establishment and bureaucracy. That's what they're all about.

CUOMO: Sean...

SPICER: If you're ready for change, I think you're going to continue to see the contrast tonight.

CUOMO: I just asked you about LGBTQ and what he did with the Syrian refugees that was rebuffed by the court, and you ignored it. Well- played. You're doing what you said Tim Kaine wants to do, which is ignore the weak parts and focus on the strong parts.

SPICER: You asked if Tim Kaine was going to attack. And if so -- and I think he is.

CUOMO: I know. I was looking for your take on those issues. Let me ask one final one.

SPICER: With regard to the Syrian -- hold on.

CUOMO: Go ahead, please.

SPICER: Let me answer the question.

CUOMO: Please, please.

SPICER: On the Syrian refugee front, I think Mike Pence is going to talk about making sure that he did everything, and he continues to do everything as governor to protect the people of Indiana. That's his job.

[07:10:02] And so, while the courts may overturn it, that doesn't mean that Mike Pence didn't and will continue to do the right thing and look after the interests and the safety of every citizen of Indiana. And frankly, the same kind of attitude that he'll bring as vice president, which is that no matter what a court says or no matter what, that doesn't mean that you don't fight for the right thing every time.

CUOMO: All right. Except the court said he was fighting for the wrong things. It's worth reading that decision.

One last thing. On taxes with Trump, 57 percent of people polled are now concerned that Trump is hiding something, and that's why he won't release his taxes. Do you believe that he should now release his taxes as every other candidate has?

SPICER: He's made it very clear that he's under audit and, as soon as the audit is over, he'll do it.

CUOMO: How about the audit letter? How about releasing the audit letter, just one.

SPICER: Then that's up to him. I'm not in a position to -- it's to him, his counsel to decide what they can and can't release. Not me.

CUOMO: Sean Spicer, well argued, as always. Thanks for coming to us early in the morning. You're always welcome on NEW DAY. Appreciate having you.

SPICER: Thanks, Chris.

CUOMO: All right.

Meantime, the vice-presidential nominees, Indiana Governor Mike Pence and Virginia Senator Tim Kaine, face off tonight right where Sean Spicer just was, 9 p.m. Eastern. We're going to have full coverage starting at 4. What will change in the race after tonight -- Alisyn.

CAMEROTA: All right. Hillary Clinton and Donald Trump sparring over Trump's leaked taxes. He says he's a genius for doing that. Clinton says he's anything but. How will this all play out? Our panel discusses that next.

(COMMERCIAL BREAK)

[07:15:29] CAMEROTA: Donald Trump and Hillary Clinton sparring on the campaign trail over the new tax revelations.

(BEGIN VIDEO CLIP)

TRUMP: As a businessman and real-estate developer, I have legally used the tax laws to my benefit. I mean, honestly, I have brilliantly -- I have brilliantly used those laws.

CLINTON: While millions of American families, including mine and yours, were working hard, paying our fair share, it seems he was contributing nothing to our nation. Now Trump represents the same rigged system that he claims he's going to change.

(END VIDEO CLIP)

CAMEROTA: All right. Let's discuss this with CNN political commentator and former Donald Trump campaign manager Corey Lewandowski; and CNN political commentator and Clinton supporter Christine Quinn.

Great to have both of you.

So Corey, we're now 24 hours into this, at least. Maybe since the revelation Saturday night. But it sounds like the Trump campaign is not denying that he has not paid federal income taxes for the past 18 years. Are we right?

COREY LEWANDOWSKI, CNN COMMENTATOR: That's not what he said. So what the extrapolation here is, is that based on the losses that he supposedly claimed in 1995 and the revenue which he made in 1995, if you extrapolate that and Donald Trump made the same amount of money every year after year after year, that that loss carried forward, then "The New York Times" has said he hasn't paid income taxes in 18 years. Donald Trump has never said that.

CAMEROTA: I know that. So the campaign is not denying "The New York Times" report and their math. So has he paid federal income taxes?

LEWANDOWSKI: What Trump has said is, as a businessman and an obligation to his business, he has done what every other businessman in this country has done, including Warren Buffett, Hillary Clinton's favorite billionaire, including George Soros, who lost a billion and a half dollars last year.

So look, this is what business people do. Under the same exact rules in 1995, half a million people...

CAMEROTA: Yes.

LEWANDOWSKI: ... took the same deduction Donald Trump did.

CAMEROTA: The only difference is, Corey, is that it also appears that Donald Trump, at least since 2008, has not given money to charity.

LEWANDOWSKI: Let me stop you, because that's not true. What we know unequivocally...

CAMEROTA: Go ahead. Tell us.

LEWANDOWSKI: Unequivocally, is the Marine Corps Law Enforcement Foundation here in New York received a million-dollar check from Donald Trump last year. You can call Jim...

CAMEROTA: From his own wallet, not from the Trump Foundation.

LEWANDOWSKI: Well, you didn't say the Trump Foundation. You said he hasn't given money to charity. That's not true.

CAMEROTA: I mean, his personal wallet.

LEWANDOWSKI: He wrote a personal check. And you can check with the Marine Corps Law Enforcement Foundation. He gave a million-dollar check. And I encourage you to check on that. Because to say he hasn't given money to charity is factually inaccurate. And the Marine Corps Law Enforcement Foundation is on the record saying they received a million-dollar check.

CAMEROTA: A million dollars is impressive. It's not as impressive for a billionaire. Corey, the problem is, all of this could be cleared up if he released his taxes. Then we would know how much he gives to charity and what his effective tax rate is. Why not do that?

LEWANDOWSKI: Look, the IRS is a failed organization, clearly. They've been auditing Donald Trump for the last ten years.

CAMEROTA: He can release them. The IRS says everybody -- lawyers, everybody can release them, even while being audited.

LEWANDOWSKI: Why -- why would you do that if you're under routine audit?

CAMEROTA: So people don't doubt your charitable giving and your tax rate and all of these questions that are swirling around.

LEWANDOWSKI: And then you have every potential accountant in the country going through every line of his tax returns and causing, potentially, more problems or less problems or being a Monday morning quarterback.

CAMEROTA: One last thing.

LEWANDOWSKI: If I were a counsel to Donald Trump or a CPA, I would say absolutely don't release.

CAMEROTA: Well, let's get Christine in here, because there are challenges for your side on this, as well, and I want to bring those up. In the latest polling, 73 percent of registered voters would like Donald Trump to release his tax returns. Fifty-seven percent of registered voters believe that he's hiding something. Is that a problem, Corey?

LEWANDOWSKI: I think if the IRS would do their job quicker and more efficiently, then we would see their taxes. What Donald Trump has said very clearly in the debate, in front of 85 million people, "I will release all of my taxes as soon as Hillary Clinton releases her 33,000 e-mails."

CAMEROTA: That's different, by the way, than the "I'm being audited." He's changed the logic on that one.

LEWANDOWSKI: He is being audited.

CAMEROTA: But he won't care that he's being audited if Hillary Clinton releases some e-mails. That's a different argument.

LEWANDOWSKI: Thirty-three thousand e-mails, he'll release the taxes.

CAMEROTA: OK. Here's the thing, Christine, is that we've just had a panel of Trump supporters on. They don't see this as a big deal. They do see the fact that he's made so much money and that he's been able to work the system in this way as a sign of his business acumen. Let me play a sound bite of what his supporters say.

(BEGIN VIDEO CLIP)

TERRY JONES, RETIRED ELECTRICAL CONTRACTOR: I don't know anybody that checks the box under tax returns and says, "I want to pay twice as much as I need to." So I don't have a problem with it. If it was done legally -- he's been audited every year, apparently forever. I don't have a problem with it.

UNIDENTIFIED FEMALE: To me, it doesn't matter what his tax returns show. It's more about what kind of person he is. Politicians are more crooked than businessmen, to me.

(END VIDEO CLIP)

[07:20:02] CAMEROTA: It doesn't matter to them. It's working for him, is what he's saying about why he took this loss and may not have paid federal income taxes.

CHRISTINE QUINN, CNN POLITICAL COMMENTATOR: Let me say a couple things. One, I don't think anyone thinks that the hardcore Donald Trump supporters, right, the people he's kind of had throughout the whole process, whatever that hardcore number is, I don't think this is going to change their opinion. I don't think actually there's a lot between now and November that's going to change their opinion, honestly.

So that, with all due respect, isn't relevant to me as it relates to between now and election day. But I think for independent voters, as we're seeing with Hillary picking up white college-educated voters, there are a significant portion and groups of voters to whom this matters. Why does it matter?

One, Corey couldn't even answer the question of has the campaign denied this. They have not denied this. They haven't denied this, one can extrapolate, because there's truth to the report. What this report shows is a number of things.

One, Donald Trump is not the sensational business person he claims to be. Sensational business people don't seemingly hold back this loss. Two...

CAMEROTA: Hold on. Not exactly. You can also spin it, Christine, in a different way, which is, yes, he had this big loss, because he was overextended and risk taking, which is what the investigation has shown, but he's the phoenix that rose from the ashes. He came back from that.

QUINN: Potentially, but we don't know the actual story of it, right? Because...

LEWANDOWSKI; We do know the story.

QUINN: No, Corey, you got to go. No, no, no. Alisyn -- Alisyn, with all due respect.

LEWANDOWSKI: Donald Trump is back.

QUINN: No, I sat here respectfully. Corey needs to do the same.

CAMEROTA: Go ahead.

QUINN: Whether he rose from the ashes or not, being a good business person is focusing on the entirety of your business. And we know when he took this loss, he left a significant portion of New Jersey small business people holding the bag and never paying them.

Beyond that, this speaks to Donald Trump's tremendous hypocrisy. He spent much of this campaign criticizing people and hedge funders and other groups who don't pay taxes, never saying -- never saying he did the same thing.

CAMEROTA: That's a good point. Corey, I do want to bring that up. Because he has hit President Obama, as well as other people who he thought were not paying a high enough tax rate. So that does sound like hypocrisy, now that we know that he might not have been paying any federal income taxes.

LEWANDOWSKI: We don't know that that's the case. And look, there's a couple issues.

CAMEROTA: Hasn't denied it.

LEWANDOWSKI: There's a couple of issues. Dean Baquet of "The New York Times" stood in front of Harvard University and said he's willing to go to jail to publish Donald Trump's tax returns. That is a felony, punishable by five years in prison. And guess what happened? "The New York Times" miraculously, two weeks later, received in the mail...

CAMEROTA: As did other news organizations.

LEWANDOWSKI: Miraculously in the mail received this document and decides to publish it.

CAMEROTA: Yes. LEWANDOWSKI: He should be held accountable for that.

No. 2, Warren Buffett, George Soros. The liberals of the left, who have business executives who no one questions how successful...

CAMEROTA: And they gave millions of dollars to charity.

LEWANDOWSKI: Look at how much money George Soros has given to charity.

QUINN: Oh, my God.

CAMEROTA: Millions.

LEWANDOWSKI: Billions. He's worth billions. He lost a billion and a half dollars.

CAMEROTA: You say Donald Trump gave one million.

LEWANDOWSKI: No, no, I didn't say that. You said he's never given money to charity. And I said it's factually inaccurate.

CAMEROTA: They have no evidence.

LEWANDOWSKI: We do have evidence.

CAMEROTA: They haven't released his taxes.

LEWANDOWSKI: But we do have evidence.

CAMEROTA: Your evidence is one million.

LEWANDOWSKI: I gave you one example. There's hundreds of examples out there.

CAMEROTA: Bring more in tomorrow when you're back.

QUINN: And if we had his taxes, we would know.

But I just want to note, with all due respect, Corey, he hasn't answered one question you've asked him, because there are no good answers. The Trump campaign can't answer about his hypocrisy. Because they divert, they divert, they divert.

LEWANDOWSKI: Trump being down a billion to over 10 billion.

(CROSSTALK)

QUINN: God knows those small business people, thank you.

CAMEROTA: You guys get fired up at the end of the segment. Have you noticed that?

Quinn: I'm trying to be respectful, but Corey is interrupting. Just riles a girl up.

CAMEROTA: Corey, take it to the green room, people -- Chris.

CUOMO: Two takeaways, my friend. One, they love to work the clock at the end of the segment. And second, whenever they say "with all due respect," you're getting punched in the nose. Those are -- those are two takeaways there.

All right. So coming up next, we're going to have more of our one-on- one with Vice President Joe Biden. What he thinks you should look for tonight in the V.P. debate and why he believes this race matters more than ever. Here's a taste.

(BEGIN VIDEO CLIP)

CUOMO: If you had known back then what you know now about what this race is, you would have made a different decision?

(END VIDEO CLIP)

CUOMO: Would he have? Would he be in the race right now? Next.

(COMMERCIAL BREAK)

[07:28:25] CAMEROTA: OK. We have a weather alert for you right now. Look at your screen. Hurricane Matthew is already battering Haiti. It is about to make landfall there, and it has already killed people.

The storm is also expected to hit Cuba later today. Millions of coastal residents in the U.S. are on high alert as the storm takes aim at the East Coast. The governors of North Carolina and Florida have declared states of emergency when -- for when Matthew makes a direct hit.

New Hampshire Senator Kelly Ayotte says she misspoke when she said Donald Trump is a role model for children during a debate last night.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Would you tell them to be like Donald Trump? Would you point to him as a role model?

SEN. KELLY AYOTTE (R), NEW HAMPSHIRE: I think that, certainly, there are many role models that we have, and I believe he's -- can serve as president, and so absolutely I would do that.

(END VIDEO CLIP)

CUOMO: And by absolutely, she later backtracked and said she didn't mean absolutely. She said that neither Trump nor Hillary Clinton have set good examples for children. Ayotte has not endorsed Trump, but she will vote for him in November.

CAMEROTA: You have to see this. Attacked by a grizzly bear not once but twice. We want to warn you, the video you're about to see is graphic.

This man, Todd Orr -- oh, my gosh -- he lived to tell the story and share these gruesome videos of his injuries. Orr says he came upon two bear cubs and a very protective mama grizzly while hiking in Montana this past weekend. He describes the attack in detail in a Facebook post, which has been viewed 12 million times so far. Orr sums up the traumatic experience this way. He says, "Not my best day, but I'm alive."

CUOMO: I disagree. Any day you escape a grizzly bear...

CAMEROTA: Is your best day.

CUOMO: ... is your best day ever.

CAMEOTA: I see why you see it that way. I can't believe that he escaped.