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Secretary of State Tillerson Announces New U.S. Approach to North Korea; White House Continues to Defend President Trump's Claims of Former President Wiretapping Trump Tower; Interview with Congressman Steve Scalise. Aired 8-8:30a ET

Aired March 17, 2017 - 08:00   ET

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

[08:00:00] CHRIS CUOMO, CNN ANCHOR: -- stern warning, saying all options are on the table with North Korea, but going even further, that the era of silence is over. Does that mean diplomacy is over when it comes to dealing with North Korea unless it denuclearizes its program.

POPPY HARLOW, CNN ANCHOR: All of this is coming as the Trump White House is distracted by the president's unproven wiretapping claims. They are also battling resistance to the president's proposed budget and to the GOP's own health care plan which divided his own party and now may not have the votes to get through the House. All of this as we enter day 57 of the Trump presidency. Let's begin this hour with our Alexandra Field. She is live in Seoul, South Korea, with the breaking details, a very clear message from the secretary of state.

ALEXANDRA FIELD, CNN CORRESPONDENT: That's right, Poppy. The secretary of state was up at the border between South Korea and North Korea. He has said that the 20 years of diplomacy have failed. The efforts to contain and control North Korea's nuclear ambitions and their missile ambitions have failed. He returned to Seoul this afternoon speaking to reporters saying that the military option is on the table if North Korea threatens the U.S. forces or the South Korean forces who are based here on the peninsula, or if they continue to accelerate the weapons program to an extent where the U.S. feels that there is no other recourse.

Of course the story goes like this, the thinking is if there were ever to be a preemptive strike on North Korea, they could retaliate against Seoul, a city with a population of 24 million people in the wider metro area. It sits within rocket range of the North Korean border. So certainly military conflict and military option is something no one wants to see. Secretary Tillerson said there are a number of steps that could be taken first. Listen to this.

(BEGIN VIDEO CLIP)

REX TILLERSON, SECRETARY OF STATE: The policy of strategic patience has ended. We're exploring a new range of diplomatic security and economic measures. All options are on the table.

(END VIDEO CLIP)

FIELD: Secretary Tillerson now saying that the North Korean threat is no longer just a regional concern but it is a U.S. concern with Kim Jong-un declaring that this year he plans to test an intercontinental ballistic missile capable, he says, of carrying a nuclear tipped warhead to the U.S. Chris?

CUOMO: All right, Alexandra, thank you very much for the reporting. Obviously what the secretary of state said is brought into context in terms of what happens next. Is North Korea getting ready for another missile test? And if so, what is going to be the response by the United States? What will be the response by North Korea to what the secretary of state just said? Let's get right to Barbara Starr live at the Pentagon. Barbara?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Good morning, Chris. Underpinning all of the rhetoric, all of the language that the world is hearing this morning is U.S. intelligence. U.S. satellite flying over North Korea are watching closely even as we speak. They are seeing several things our sources are telling us. They believe, the U.S. believes North Korea is getting ready possibly for a sixth underground nuclear test. Recent imagery from the test site shows the tunnels are looked to be the entrances, look to be ready for a test, that there's equipment and personnel moving around. But will they do it, when will they do it? Nobody knows.

On the missile front, U.S. satellites are seeing evidence we are told that North Korea is moving equipment around that could be associated with an intercontinental ballistic missile launch. Let's be clear, the belief is by U.S. intelligence they don't have the capability yet of a missile that could reach the United States, but that clearly absolutely what they are working on and working on advanced missiles. While all of the rhetoric goes on in Washington, North Korea may be the issue that Donald Trump may have to take the most seriously. Poppy?

HARLOW: Indeed, Barbara Starr working from sources for us this morning. Thank you, Barbara, for that.

And all of this North Korean news comes as the White House continues to angrily defend President Trump's unproven wiretapping claims, the controversy proving challenging for the president to focus on his own agenda. Our Joe Johns is at the White House with more this morning. Good morning.

JOE JOHNS, CNN CORRESPONDENT: Poppy, this administration appears to be in crisis mode on multiple fronts with members of the president's own party on Capitol Hill flatly contradicting his wiretapping claims. The response so far from the White House in the briefing room has been doubling down.

(BEGIN VIDEOTAPE)

SEAN SPICER, WHITE HOUSE PRESS SECRETARY: Hold on, hold on. Let me -- I'm trying to answer your question, Jonathan if you can calm down.

JOHNS: White House press secretary Sean Spicer defiant and combative.

SPICER: He stands by it, but again, you're mischaracterizing what happened today.

JOHNS: Angrily defending the president's unsubstantiated claim that former president Obama wiretapped phones at Trump Tower despite leaders from both parties saying there is no proof.

REP. PAUL RYAN, (R) SPEAKER OF THE HOUSE OF REPRESENTATIVES: We have cleared that up. We have seen no evidence of that.

JOHNS: Spicer continuing to cite media reports to try to justify the president's baseless accusation.

[08:05:03] SPICER: There's widespread reporting that throughout the 2016 election, there was surveillance done on a variety of people.

JOHNS: The leaders of the Senate intelligence committee rejecting Spicer's claim in their strongest statement yet, stating "Based on the evidence available to us, we see no indications that Trump Tower was the subject of surveillance." The Republican chair of the House intelligence committee firm in saying that president's wiretapping claim is wrong.

UNIDENTIFIED MALE: Do you have any evidence to suggest that any incidental collection may have picked up Donald Trump's communications at all? Do you have any evidence to suggest that?

REP. DEVIN NUNES, (R) HOUSE INTELLIGENCE COMMITTEE CHAIRMAN: Other than General Flynn, we don't.

JOHNS: The ranking Democrat on that committee tells CNN he expects FBI director James Comey to debunk President Trump's accusation when he testifies before Congress on Monday.

UNIDENTIFIED MALE: There's no evidence of this at all.

JOHNS: This as the Trump administration confronts sharp criticism from fellow Republicans over the president's budget proposal.

MICK MULVANEY, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET: We can't spend money on programs just because they sound good.

JOHNS: Congressman Harold Rogers deeming the budget draconian, careless, and counterproductive. Senator Marco Rubio says proposed cuts to the State Department undermine America's ability to keep our citizens safe. The budget aims to slash billions from government agencies to boost military spending, hitting hard social services like afterschool programs for children and programs that feed the elderly.

MULVANEY: Meals on wheels sounds great. Again, that's a state decision to fund that particular portion. To take federal money and give it to the states and say, look, we want to give you money for programs that don't work. I can't defend that anymore.

REP. CHRIS COLLINS, (R) NEW YORK: Meals on wheels is a wonderful program. It is one I would never vote to cut even one dollar.

JOHNS: The White House also facing another sobering reality, the GOP's health care bill may fall short of the votes needed to pass in the House. CNN's whip count now has 21 Republicans saying they will vote no or are leaning against it. House leadership can't afford to lose another vote.

(END VIDEOTAPE)

JOHNS: Sean Spicer at that unusual briefing also repeated an assertion made on another network that former president Obama enlisted the British intelligence agency GCHQ to spy on Donald Trump. GCHQ released a statement strongly denying that, and now this morning Theresa May speaking to reporters said the White House has agreed not to repeat that assertion. When asked if the White House apologized she said she would not repeat private conversations. The White House and NSC here in Washington have not responded. Chris and Poppy, back to you.

CUOMO: Joe Johns, appreciate it very much.

We have the perfect guest for this conversation, House Majority Whip Steve Scalise, Republican from Louisiana. It's great to have you. We're going to be talking about the GOP health care bill and what the whip thinks about the vote count right now. But I do want your take on this breaking news on what the secretary of state just said out of North Korea. Did you know that this policy would be apparently changed in terms of their rhetoric coming out of the United States representative on this issue?

REP. STEVE SCALISE, (R) HOUSE MAJORITY WHIP: Obviously it's all developing quickly. But I'm encouraged that you see Secretary of State Tillerson going over there and frankly confronting somebody who has been saber rattling and confronting not only our enemies but provoking the United States as well with the nuclear tests and their stated whether or not their intentions or not, but their move towards having the ability to send intercontinental ballistic missile into the United States. It ought to concern us all. I'm glad they are focusing on it.

CUOMO: Quick follow. Do you think we can get the votes to take military action against North Korea, how fact-sensitive do you think that would be? What kind of appetite do you think there would even be for something like that?

SCALISE: I think the fact they are not taking options off the table is important. And I think if there's a case to make you're going to see support in Congress for the commander in chief to carry out his mission.

CUOMO: Remember, declarations of war like that, that's your guy's duty first before it gets to the president certainly. So that's that issue.

Let's talk health care. You know what the CNN count was as of about 11:00 last night. CNN believes that it's about 21 of your party membership may go against this bill. That number is very relevant because it means it wouldn't pass. Do you buy that whip count? If not, why not? SCALISE: Like with any whip count on any high profile bill, my job is

to work with our members on a regular basis. I'm talking to members today that are undecided, that are leaning no, and frankly there's a path for most of them to get to yes. We're working very closely with the White House on very specific changes that get some of those members that are no to a yes vote on the bill.

CUOMO: So the premise is we've got to change this in order to get it passed. Obviously the White House was resistant to that, seems to be changing. Paul Ryan seemed to be changing his tune on that as well. What are the biggest things people want to change as far as your experience hearing?

[08:10:07] SCALISE: Actually the president has been very open. If you look over the last week, two weeks really, the president has been talking about an ongoing negotiation. And that's been the case. A lot of our members have brought additional ideas. I think it's a good bill already, and there are some changes that have been brought forward by members from every faction in the conference that I think would make it an even better bill.

But the bottom line on this bill is it actually does lowers costs and health care premiums for families, so is saves families money. It cuts tax by over $800 billion which puts real money in the pockets of working families. It reduces the deficit. The most important thing, though, is it gets the federal government out of your health care decisions so families actually get to decide what's best for them. That's all in the bill and that's not going to change, it's only going to get better. And I'm look being forward to working with the president to continue getting more members to yes and then passing repeal and replace bill in of the House.

CUOMO: What are you dealing with more? People who are saying, hey, this doesn't go far enough, I want more of these mandates taken out, I want more of the tax structure taken out, or people saying I can't go for a bill that's going to work against my own constituents and leave people without insurance coverage in the name of access? I can't sell access. I need to have actual coverage. What are you dealing with more?

SCALISE: The bill actually does increase access but it gives people actual freedom in health care --

CUOMO: But access isn't coverage, that's what I'm dealing with. In your state you have a huge population --

SCALISE: Well, right now you can have coverage and no access.

CUOMO: Well, right, I get what the rhetoric is back and forth. But I'm saying the reality is in states like yours, you have a huge Medicaid accessible population that's only growing. And for those people it doesn't matter how much money you put in an account for them, they're not going to have the money on top of it to get the coverage that they need, especially if you remove mandates of what has to be provided by insurance companies. How concerned are you when you go back home that people who are working hard for this money are saying you didn't make this better for me?

SCALISE: My biggest concern, and believe me, I've gotten direct testimonies from hundreds of constituents in my district who have told me their health care costs are going up by double digits. I've got constituent after constituent in southeast Louisiana tells me their deductibles being over $10,000, which means they can't even use the health care. So they are paying a premium. It's a very high premium, it's going up. They have a card for health insurance but they are not able to use it because the deductible is too high.

That's what we're focusing on addressing is lowering costs and allowing people to actually go buy plans that are better for their family rather than some unelected bureaucrat in Washington saying this is the only thing you can buy. That's what's not working. We change that.

And look, we're working with members from every faction within our conference who have good ideas to make this even better. And the focus is how can this actually put more power in the hands of families so they can make the health care decisions at affordable costs to buy the plan they want.

CUOMO: How do you make it cheaper for people if you take the healthy people out of the pool? Right, because that's what the mandate was. They didn't throw it in there because they like to force people to buy things they didn't want. I know that that's working politically, but you force the young people in because that's makes a company reduce its cost, reduce what it's going to charge you is because what its risk pool is, what is the chance it will have to pay out money. Insurance companies are in the business of not paying, not paying. So how do you replace that incentive to reduce costs with your plan?

SCALISE: Well, under Obamacare, first of all, what you're seeing is healthy people getting out and paying the penalty and not being in Obamacare. That's one of the reasons costs are going up because you only have less healthy people in the plan.

CUOMO: Wasn't the fix to make the penalty higher so they have to be in? That's what the Democrats are arguing.

SCALISE: What we're focused on plans that have a lower cost. Even the CBO says our plan will lower premium cost by double digits which means more people can actually get in and buy plans that work for their family, that's what lowers overall costs. Plus, we establish --

CUOMO: Are you making them make a bet on their own health? I get the scenario where you're asking somebody who is 60 to buy a plan that has prenatal care, I get why as an example that's not what you want to do. But it is also not a general situation.

The upside is if I buy a plan right for me, thank God right now my kids and I, we're healthy. But then I'm making a bet, right. I'm making a bet that nothing bad is going to happen not covered by my plan. That was part of it, make the companies give you all the care you could need, that's what insurance is about, insuring yourself against the inevitable. SCALISE: Right. And look, we still protect people with preexisting

conditions from being discriminated against. So that's protected in our bill. But we also set up high risk pools to give states additional money to help people with preexisting conditions so that you can lower costs. We put real money in place to do that. With the savings that we get by reforming programs like Medicaid where we actually give governors the flexibility. And by the way, most governors in the country have said give us more flexibility on Medicaid, we can actually help more people with less money.

CUOMO: But they haven't asked for less money. They said give us more -- everybody wants everything, right? Governors are saying give us more control but they want more money.

SCALISE: Right. In this case, we don't give them less money, but we actually give them real flexibility and control to design their program as best as it works for their state, because every state has populations. Louisiana's Medicaid population is a whole lot different than the state of New York.

CUOMO: It's true.

SCALISE: Yet, if you want a change, you've got to go to Washington to get a waiver and usually they tell you no.

CUOMO: But numbers do go down in Medicaid in terms of what you're going to give the state. You just phase it in over a number of years. But it's note going up, it's going down.

SCALISE: No, it's a slower increase. Only in Washington where if you get more money next year, but it's not as much as you wanted to get, they call it a cut. States will actually be getting an increase next year over current yet, but it's a slower growth rate because you're giving them real flexibility so they can run the program a lot --

(CROSSTALK)

CUOMO: But the rate will be down from where they are right now four years from now. That was a big factor for the CBO in showing how many would wind up not having coverage, because we all know whether it's you who takes them off the rolls or states, who take people off the rolls, they're going to wind up without coverage.

SCALISE: Well, some of that reduction comes from a work requirement we actually put in. There's a verification process in our bill, where every six months, you have to go get re-verified. And if you're not eligible for Medicaid, which, by the way, you shouldn't be in Medicaid, if you're not eligible, yet they never verify it. So, somebody that's not qualified for Medicaid maybe six months from now, they are still getting the service even though they shouldn't be getting that tax funding.

They actually will be -- if they got a job, if they're making more money, that they're not eligible for Medicaid, under our bill, we actually verify that and say, look, you've g a job, this program is for low income people, poor people, people that are down on their luck. If you got back on your feet, you're not eligible for the program.

The federal government used to look the other way and spend billions of dollars on a lot of that waste. It's time to say, look, if you're eligible for the program and need this help, we want it. If you're not eligible, why should the program still be carrying you?

CUOMO: Right. The pushback is that's real but it's an exception not the rule. I've got to tell you, Congressman Scalise, this was very helpful to the audience.

SCALISE: Thanks.

CUOMO: Appreciate you being here. They are hearing you say you can get the votes. Let's see what happens next. You're always welcome on the show.

SCALISE: Appreciate it.

CUOMO: All right.

Poppy?

POPPY HARLOW, CNN ANCHOR: All right. So, the proof, right, still looking for the proof, none presented so far. President Trump maintains he was indeed wiretapped by President Obama. What's the play here, though, as the White House fights back in a pretty extraordinary way at their press conference yesterday? Is the president hurting himself continuing down this road? We're going to debate that next.

(COMMERCIAL BREAK)

[08:21:06] HARLOW: Welcome back to NEW DAY.

The Republican and Democratic leaders on the House and Senate Intelligence Committees and House Speaker Paul Ryan and the Attorney General Jeff Sessions all say there is no evidence that that I have seen to support the president's claim that he was wiretapped by his predecessor.

So, why is President Trump digging in this way? Is it hurting him? Is it eroding his credibility?

Joining us now to debate, Rick Santorum, CNN senior political commentator and former U.S. senator from the great state of Pennsylvania. And Jason Kander, CNN contributor and former Missouri secretary of state.

Gentlemen, so nice to have you both here this Friday morning.

Senator Santorum, let me begin with you because you often come on the air as a defender of the president. Many in your own party having a very hard time doing that right now. Listen to just some of them talking about what they think the president should do when it comes to those wiretapping claims.

(BEGIN VIDEO CLIP)

REP. CHARLES DENT (R), PENNSYLVANIA: President Trump must provide proof or evidence to substantiate that claim. If he cannot, if he cannot, then he should retract.

REP. TOM COLE (R), OKLAHOMA: I think you ought to walk it back if the evidence doesn't support the charge you made. In this case, I don't think it does.

SEN. JOHN MCCAIN (R), ARIZONA: The president has one of two choices -- either retract or provide the information that the American people deserve.

(END VIDEO CLIP)

HARLOW: Senator, is the president hurting himself? If so, to what end? I mean, how much? Because it didn't hurt him when he said President Obama wasn't born here. He became the president of the United States, hasn't hurt him so far when he claimed 3 million to 5 million voted illegally with no evidence.

Does this hurt him?

RICK SANTORUM, CNN SENIOR POLITICAL COMMENTATOR: Well, I mean, that's really the point. Throughout the course of the last campaign, he was very effective in changing the subject and throwing things out there about his opponents, primarily, whether it's Hillary Clinton, Ted Cruz, and there's a long litany of claims made by then-candidate Trump to throw off their opponent and get them to focus the attention on the crisis that's now confronting their campaign.

So, he was effective in doing that. The problem this time is there's no opponent. The only person that -- he can attack President Obama and say that he wiretapped him but the public right now isn't focused on President Obama. They don't really care that much what President Obama did or didn't do.

They do care about what the president says and his credibility. And so, while he could have gotten away with that in the past, I think it's going to be harder and harder as this presidency goes on to use this tactic and for someone who believes very much in what President Trump is trying to do, I think his budget is a great step in the right direction.

I think what he's doing on health care -- I mean, the fact that Donald Trump is fully engaged in the health care debate and working with members of Congress and trying to craft a bill -- I don't think anyone would have thought he would be that engaged but that story isn't being told. The focus is on wiretap. I don't think that's good for his presidency.

HARLOW: All right. Senator, we're going to get back to the budget you called great in just a moment.

But to you, Secretary Kander, your take on what the right play is for Democrats here. How much do you think it helps your party leading up to the 2018 midterms to focus on the wiretapping, right? Because you heard Sean Spicer going at it with the media yesterday. How much does that help you guys or you -- or does it help to fight tooth and nail on the policy?

JASON KANDER, CNN CONTRIBUTOR: Well, none of this is that helpful to the country at all, right? I mean, when the president keeps making stuff up, it's not a good thing. You've got to wonder if at this point Ted Cruz isn't watching this wondering if lying Ted was actually a compliment coming from this president.

So, in terms of what to focus on, absolutely, there needs to be a focus on policy, but that's also what's best for the country. And anybody who worked in a legislative environment knows that really more often than not you would rather work with somebody who disagrees with you often but is a straight shooter and tells the truth and doesn't just constantly move their position and move what they believe the truth is.

[08:25:04] And so, that's the problem President Trump has and problem it presents for the country, is that if he's going to constantly change his story or as Senator Santorum says, change the narrative by making stuff up, it's really hard for Democrats or Republicans to work with him.

HARLOW: So, let's talk about the budget, guys because, Senator Santorum, you call this budget great. It cuts a lot of stuff, it cuts things like afterschool programs. It cuts Meals on Wheels.

You're shaking your head but that's what it does and Mulvaney, head of the OMB defended it yesterday in the fascinating change with NBC's Peter Alexander. Listen.

(BEGIN VIDEO CLIP)

MICK MULVANEY, OMB DIRECTOR: We can't spend money on programs just because they sound good.

PETER ALEXANDER, NBC NEWS: There's a program called the Shine that's in Pennsylvania, rural counties of Pennsylvania that provides afterschool educational programs for individuals in those areas, which so happens to be the state that helped propel President Trump to the White House. I'm curious what you say to those Americans when they tell me today that 800 individuals will no longer -- children who need it most -- will no longer be provided in those most needy of communities, the educational care they need.

MULVANEY: Let's talk about afterschool programs generally. They are supposed to be educational programs, right, and that's what they're supposed to. They're supposed to help kids who can't -- who don't get fed at home get fed so they do better in school.

Guess what? There's no demonstrable evidence they are actually doing that, there's no demonstrable evidence they are actually helping results, helping kids do better in school.

(END VIDEO CLIP) HARLOW: There's a lot of evidence and we can bring it up on the screen and look at the 2008 Harvard study that shows us, the 2016 Afterschool Alliance shows us that. I mean, you know it.

This is your state of Pennsylvania. Is that a great cut?

SANTORUM: Well, look, the answer is yes because it's not a primary role of the federal government when you look at the fact that we're going to be a resource constrained government.

The reason we're going to be resource-constrained is because both the president and Democrats don't want to cut entitlement programs. They're leaving Social Security. They're leaving Medicare, off the table, the two biggest programs in the federal government. In fact, two thirds of the federal government are entitlement programs. And aside from Medicaid, which the president is going after because it's part of Obamacare but he's not going after the basic Medicare program, he's just going after the Obamacare part.

So, the bottom line is, when you only have that -- when you only have a small portion of the government to deal with, and you look at the historical lows of the Defense Department and the principle role of the federal government is to defend this country, no state can, no local community can, only the federal government.

HARLOW: All right.

SANTORUM: Local communities can do day care. Local communities can do afterschool programs, but they can't do national defense. So, what the president has done is set the priority to where the federal government is really responsible.

HARLOW: Final word, Secretary Kander. Where do you disagree with the senator on this?

KANDER: All over the place, but let's start with defending the country. When you are cutting the State Department significantly, it really doesn't help us defend the country. And in fact, it makes us less safe.

And let's talk about the idea of it being constrained resources. This is what politicians in Washington do all the time, is they make huge cuts to funding that's going to the states and then they go home and they brag about how they've cut spending at the federal level. And the truth is that when that kind of spending gets cut to the states, it's the states that have to raise taxes and spend more.

HARLOW: All right. Gentlemen, thank you both. Good weekend to you both.

Chris?

CUOMO: All right. Thank you very much.

So, we saw Sean Spicer, the press secretary for us, going at the media, saying no, no, no, we have proof of the wiretapping, look at these reports. Well, if that's true, why was the White House apologizing for those same statements? New information ahead.

(COMMERCIAL BREAK)