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Trump Signals Shift on Wall Funding to Avoid Shutdown; Trump Slaps Tariff on Canadian Lumber; State Department Removes Post Promoting Mar-a-Lago; North Korea Carries Out Large-Scale Artillery Drill. Aired 6-6:30a ET

Aired April 25, 2017 - 06:00   ET

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

(BEGIN VIDEOTAPE)

SEAN SPICER, WHITE HOUSE PRESS SECRETARY: We feel very confident the government is not going to shut down.

[05:58:43] UNIDENTIFIED MALE: The border wall has never really been vetted by the Congress. You won't get one Democratic vote for that.

UNIDENTIFIED FEMALE: President Trump looking to strike a compromise to keep the government open.

UNIDENTIFIED MALE: This is a waste of money, and it's counterproductive.

STEVE MNUCHIN, U.S. TREASURY SECRETARY: The tax plan will pay for itself with economic growth.

SEN. ELIZABETH WARREN (D), MASSACHUSETTS: What he has delivered is a gut punch to America.

DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: North Korea is a big world problem, and it's a problem we have to finally solve.

UNIDENTIFIED MALE: The level of provocations, the pace of provocations. There's an urgency here.

UNIDENTIFIED MALE: Diplomacy against an adversary can be only effective when it's backed up with a credible threat of force.

(END VIDEOTAPE)

ANNOUNCER: This is NEW DAY with Chris Cuomo and Alisyn Camerota.

CHRIS CUOMO, CNN ANCHOR: All right. We want to welcome our viewers in the United States and around the world. This is NEW DAY. It is Tuesday, April 25, 6 a.m. here in New York.

And up first: shutdown averted. The White House says President Trump will take the wall off the table for now.

ALISYN CAMEROTA, CNN ANCHOR: And the president's tax plan being unveiled tomorrow. We've learned that it includes a drastic cut in the corporate tax rate. What will that do to the deficit? It's day 96 of the Trump presidency. Let's begin our coverage with

CNN's Joe Johns. He is live at the White House.

Hi, Joe.

JOE JOHNS, CNN SENIOR WASHINGTON CORRESPONDENT: Good morning, Alisyn.

Another lesson on how a spending bill becomes law for this new administration. Taking the border wall off the table was starting to look like the only priority for the White House and congressional Republicans, given the fact that they had made keeping the government open, avoiding a government shutdown, a priority.

(BEGIN VIDEOTAPE)

JOHNS (voice-over): President Trump signaling a willingness to drop his demand for Congress to include a down payment for his border wall in this week's must-pass spending bill.

SPICER: We feel very confident the government is not going to shut down.

JOHNS: The president now telling conservative journalists he is open to delaying wall funding until September's budget negotiations, just hours after touting the importance of a wall on Twitter.

Senate Minority Leader Chuck Schumer calling the decision good for the country as skeptical Republicans also welcome the shift.

SEN. LINDSEY GRAHAM (R) SOUTH CAROLINA: I'm for a wall that makes sense. A 200-mile wall doesn't make a whole lot of sense. There's not a big appetite for that.

JOHNS: The administration continuing to insist that, ultimately, Mexico will foot the bill for the wall.

JIM ACOSTA, CNN CHIEF WHITE HOUSE CORRESPONDENT: Why has there been a discussion about shutting down the government over paying for the wall? Isn't Mexico supposed to pay for the wall?

SPICER: Well, I think, Jim, the president has made very clear that initially, we needed to get the funding going. And there will be several mechanisms to make sure that that happens.

JOHNS: But the president is trying to deliver on one of his key campaign promises, proposing to slash the top corporate tax rate from 35 percent to 15 percent. He will unveil details of a tax cut plan tomorrow, setting up a potential clash with Republicans concerned about the impact these cuts will have on increasing the deficit.

MNUCHIN: The tax plan will pay for itself with economic growth.

JOHNS: The administration arguing that the sweeping cuts, which go beyond a plan put forth by House Speaker Ryan will pay for themselves, a theory economists don't buy. Meanwhile, the Trump administration hitting five Canadian companies

with stiff tariffs of up to 24 percent on lumber shipped into the U.S. Commerce Secretary Wilbur Ross saying, "It has been a bad week for U.S./Canada trade relations," stoking fears about a future trade war with America's second largest trading partner.

(END VIDEOTAPE)

JOHNS: As domestic policy continues to dominate the agenda, the White House is keeping a watchful eye on North Korea. Among other things, a big artillery drill was held in North Korea overnight. The administration is saying, essentially, that they're not so sure Kim Jong-un is as tough as he says he is. President Trump saying that to journalists just last night.

A missile armed -- a submarine armed with missiles now headed to South Korea. The United States Senate is expected to gather here at the White House tomorrow for an unprecedented briefing on North Korea.

Chris and Alisyn, back to you.

CUOMO: All right, Joe. So the threat ramped up with the submarine, but the threat alleviated on this looming shutdown crisis. So let's discuss.

We have CNN political analyst David Gregory; CNN senior political analyst Mark Preston; and A.B. Stoddard, associate editor and columnist for Real Clear Politics.

David Gregory, taking the wall off the table, big move?

DAVID GREGORY, CNN POLITICAL ANALYST: Yes, big move. But I also think this whole gambit about the wall should not be taken very seriously. Unfortunately, President Trump says a lot of things that should not be taken seriously, that should be taken as more of an opening bid in a negotiation. I think the wall is that. It is an attempt to put a focus on security at the border, on the drug flow, on the people flow that Trump talks about, even though those flows have been down with regard to illegal immigrants coming across the border.

And I think in this case, the White House wisely pulled back from a negotiation where they didn't have a lot of leverage. They don't want a government shutdown. Congressional leaders didn't want it. And I thought this was a very interesting move. Because clearly, Republicans leaders in Congress said to the White House, don't go here. We do not want to own a government shutdown. Trust me. We've been there. Not good for business.

CAMEROTA: But A.B., is this really just a semantics debate where Democrats are willing to give some funding if you call it border security, but not if you call it a border wall. So the Trump administration is going to get the money, or some form of it that they want; but we just have to call it something different?

A.B. STODDARD, ASSOCIATED EDITOR/COLUMNIST, REAL CLEAR POLITICS: No, I think it's very different. And I think it's a big retreat. All the talking points now from Republicans are, "Oh, the president is going to end up with some good border security." Chief of staff Reince Priebus on the Sunday shows, "Yes, I think we're going to do well on border security."

Border security isn't permanent. A couple of drones, this and that. If you commit to building a wall, you're committing to $22 billion or somewhere between 15 and 17. You put the first billion down.

Republicans were never for the wall. Forget what the Democrats said about how they wouldn't be for any funding bill that had the wall. Republicans weren't.

And so the Trump administration -- what upsets the apple cart over in the Congress among Republican leaders is that a week ago Trump said, "We have to have a health care vote." Then he backed down. Then, "I'm going to monkey with this funding bill and push a shutdown possibility over border wall funding," and then he retreated. They just never know when the rhetorical bombs are going to come.

[06:05:19] CUOMO: Mark Preston, so A.B. makes a good point. I haven't heard any Democrat say that they'd put a dollar towards an actual wall. We had Pete Sessions on yesterday. You know, he's a rock-ribbed conservative. He said he thought the wall was an analogy. And now that it was a reality, it wasn't going to do that way.

Is this a teachable moment? Look how it works. When you find out what to make or break, because with Congress, you figure out how to strike a deal, is that what we're seeing here?

MARK PRESTON, CNN POLITICAL ANALYST: It's unfortunate you have to use those words, because they're true. The fact is you have a president who's learning on the job right now. And he's surrounded himself by, you know, capable people. But yet, they're not strong enough to force him, force his hand or at least keep his -- his mouth from basically writing checks that he can't cash. And the wall is exactly one of them. Health care is another one.

And when we talk about his first 100 days and the failures that he's had, they are all self-inflicted. And it's all strategic failures, because he didn't go about the first 100 days of getting things done, working well with Congress.

Now you can say that, well, he did this on regulations -- environmental regulations, business regulations, what have you, he did that by executive order. He didn't do that by working with Congress.

And I think A.B. is exactly right and to the point. Congressional Republicans are the ones on Capitol Hill that fear Trump more than Democrats. Haven't heard a whole lot from Democrats, because they don't have to do anything, because they can't get anything through Congress. Congressional Republicans don't know what's coming their way each day if not each hour.

CUOMO: How much of it is that they don't know because the president is underserved by the people around him, literally and figuratively? You look at whoever gave him the advice to go strong, that there's going to be a health care vote this week did him a disservice, set him up for failure.

And look at the key positions. We have the tracking key positions Trump has filled? Twenty-two confirmed of 556 key positions. He doesn't have anybody around him doing the job.

PRESTON: Well, I'll make this quick. We all thought that Ivanka Trump, his daughter, would play the role of somebody who would be able to force Trump's hand. I think it still comes from the top down. If he's such a successful businessman, if he knows the ways of the world, then I think it lands on his door.

CUOMO: You have to have legislative liaisons. They have to have the people working the programs, working in the agencies.

PRESTON: You've got to have people Trump himself fears or trusts to a level they will follow his suit. And right now I don't think he necessarily has it.

CAMEROTA: OK. So do I hear you all saying that you don't think that the wall will ever happen? That this means we're at a turning point here and that the wall is no longer a sort of real goal for the White House? Is that what...

STODDARD: I think it might be an analogy.

CAMEROTA: A metaphor. Is an analogy, a metaphor.

STODDARD: They say they're going to push this fight from April to September. That fight is going to be just as difficult in September. They don't get savings from health care if they don't pass it. How steep are the tax cuts? How far do you go on corporate? How much of a deficit buster is this? This is going to be a real fight with fiscal conservatives, and they don't want the wall.

CUOMO: So what do you make of the tax rate, David? Make your point, but also fold that in some at some point, because that's his other big news for people this morning: the tax rate for businesses is going to be lowered, if it's up to Trump.

GREGORY: And that's an example -- look, that's a real priority that will be backed up by not only what Mark was saying, a team around him that's going to advance this, although the way -- the hasty way in which they're doing it, I think, is problematic, but you've also got the will of Congress that wants to act on tax cuts. It's something ideologically in the conservative movement that people are going to rally around.

I think the idea of doing so without any concern about the fact that it will bust the deficit is going to further cause fracture -- fractures in the Republican Party. But this is the kind of thing that the markets expect. It's tied to economic growth. Although I think the argument from the treasury secretary that it's going to pay for itself through economic growth. How many times have we heard this? How is that even a serious opening gambit in the debate.

It's not that it's baseless. It's not that economic growth is not -- being tied to tax cuts is without any merit, but the idea that you can rely on that as an offset to the loss of revenue, I don't think is realistic.

I think the issue with the wall is this is a matter of political capital. You can't do everything. And you have to choose how much political capital you spend in any one area. The president thinks he can get out there and say we're going to do all these things, and he's learning on the job that you can't.

CAMEROTA: Let's crunch the numbers, actually, and look at what they're suggesting. Because what President Trump wants is to drop the corporate tax rate from from 35 percent to 15 percent.

And what the Tax Policy Center, who has crunched the numbers, says is that that would be a loss of $2.4 trillion, which means that it would up the deficit.

[06:10:05] So A.B., how are Republicans and Democrats going to feel about this proposal?

STODDARD: Well, remember candidate Trump was going to balance in eight years or something. Then he started backing off it. Just last week, he made clear privately to his advisers but it's all out in reports that he doesn't really care about the deficit neutral, revenue neutral. We've got to have a big tax cut to spur growth, going to have this ambitious 3 percent goal. And his treasury secretary Mnuchin said yesterday it will all get paid for down the road.

This, as I said, if they don't find some savings from health care, if they end up in a big argument among themselves Republicans, over tax reform. that really actually blows through the deficit even more, is going to be one more Republican-on-Republican violence debate. And he just doesn't see that coming.

The tax announcement from Trump itself last week was a way to get his aides going. His advisers were surprised by it. Republican leadership was surprised by it. So these principles we're going to see on Wednesday are going to be broad outlines, but they're not going to be a lot of details, because they're not ready. They don't have a baseline. So they haven't even been to this funding fight this week.

So it's -- sometimes Trump does this in his exuberance, but it doesn't really mean that 15 percent is going to materialize.

CUOMO: The base. Tax cuts, yay. Tax cuts for businesses. Is that as big a "yay," or do we have to sell them on this "If we cut their taxes, all boats will rise with the tide"?

PRESTON: I think by saying you are going to cut taxes, I think the base gets happy.

You know, however, it's never going to happen, because there is going to be this Republican on Republican violence. And not to get into the weeds, and I won't go deep in the swamp on this, but again, it comes back to strategy. The idea that he's going to try to do this. It's not that easy. You have to follow certain steps in order to do it. Quite frankly, he has failed to do so. And Republicans on Capitol Hill, while they like the idea of tax cuts, they're afraid of Trump's approach to it right now.

CAMEROTA: All right, panel, thank you very much. Stick around. We have many more questions, including if you talk about this story, there's another potential conflict for the Trump administration. There was this State Department post, a blog post promoting President Trump's Mar-a-Lago resort. Is that illegal? We dig into the ethical concerns next.

(COMMERCIAL BREAK)

[06:16:13] CAMEROTA: So the State Department just took down this blog post that touted, basically, the fabulousness of President Trump's Mar-a-Lago resort. That raised the eyebrows of ethics watch dogs.

Let's bring back our panel. We have David Gregory, A.B. Stoddard and Mark Preston. A.B., how is this OK?

STODDARD: There's nothing OK about this. Republicans on Capitol Hill should be ashamed of themselves, long before this blog post. Because the president never separated himself from his businesses. He is profiting off the presidency. His -- his...

CAMEROTA: Mar-a-Lago initiation rate has gone to $100,000.

STODDARD: It has doubled. And people know they have access. Two former presidents from Colombia. Lots of stuff can happen there. Forget that it's actually not even a secure environment, you know, adequately secured.

But he is at a Trump-branded property every single weekend. It is flagrant. It's not even subtle. His daughter just got three Chinese trademarks. Trump himself, after acknowledging the one-China policy, got three Chinese trademarks. This is not even subtle. They are profiting off the presidency. And the worst part about it is this is on the Republicans. They have done nothing.

CUOMO: And there's nothing cloak and dagger about it. Put up the calendars for the visits to Trump-branded properties by Trump in the first months. I mean, you see all these circles, that's where he goes. I mean, we usually talk about the security money, but the conflict is apparent.

Now, Mark Preston, you have the best skeptical face, I think, in the business. The idea that the White House didn't know about the Mar-a- Lago blog posting on the State Department site, what's the face we get on that one?

PRESTON: Well, how about this, let's assume they didn't know. What they have created, though, is a culture that this is acceptable, which is in many ways worse, because it has now permeated throughout the whole administration, all 12 people that work in the administration in some way, shape, or form. But it really has.

I mean, that is the issue. I'm not sure that Donald Trump even knew about this, but the fact that you have lower-level aides thinking that this is acceptable and putting it out there is absolutely astonishing and ridiculous.

CAMEROTA: David Gregory.

GREGORY: Yes. There's not much more to add. I mean, it's -- you have a president who said when he was elected that the brand didn't matter, that he didn't care about his business. That's clearly not true. Because his children are still actively involved in it. You have Ivanka Trump in this opaque role in the White House who's still doing her business.

And yes, this is not -- any president is entitled to go to another residence. But when it's a residence that's also a club that's making money off of his station in life, it's just totally inappropriate.

And like A.B. said, I mean, this is -- you know, it's not just about the Republicans. It's about the public. It's about those, even, who support the president. What do they feel about the presidency? This is about damage to the presidency and America's standing. That has to be factored in.

I said all along,, at some point President Trump has to realize the presidency is bigger than him. It will outlast him. He has to be faithful to it. And things like this undermine it.

CUOMO: The Senate investigation, this is where a lot of people's hopes have been pinned finding anything about Russia, because the House side is just a mess. Right? But it does seem to be slow. They get the information out there that they have just a handful of staffers. The staffers aren't attorneys. They're not investigative experts.

If those are the people doing the work, is it legitimate criticism that the staffing is not going to get it done?

STODDARD: Something definitely hit a wall, because Senator Warner, who is the co-chair, the ranking chairman on the committee with Senator Burr who runs it was very effusive about how -- about the bipartisan cooperation that they were enjoying, the work they were doing together, his respect for the chairman's conduct and how sort of nonpartisan it was just weeks ago.

[06:20:08] So something has definitely -- we've hit a bump in the road where they're very concerned that the resources are not being applied towards not only time, but as you said, people who are qualified to actually run this investigation.

So I think this coordinated on-the-record comments from Senator Heinrich, Senator Feinstein, Wyden and Senator Warner are likely to, you know, sound some alarms. They've hired two new staffers. And it probably will jump-start it. It was sort of a rare thing for four members of the committee to come out and criticize it publicly. But obviously, the way they were talking a few weeks ago has just sharply changed, and they feel that a true investigation is not on track.

CAMEROTA: Let's listen to what Senator Wyden had to say about the pace of this.

(BEGIN VIDEO CLIP)

WYDEN: I've made clear to the bipartisan leadership of the committee that I have serious concerns about the pace of the investigation. I believe you have to speed it up right now. The American people are getting most of their information from leaks and false tweets. And the issues I focused on, follow the money, following the trail of the dead bodies, it's important to use all the tools, particularly public hearings and subpoenas.

(END VIDEO CLIP)

CAMEROTA: Oh, boy. When a senator turns right to the camera and gives a soliloquy, you know that they're serious.

CUOMO: And says "dead bodies."

CAMEROTA: He inserted there, obviously, the highly attention-grabbing dead bodies, which is not something that we talk about often in the investigation, but that there was -- there were these, I guess, Russian operatives, many of whom, coincidentally, died at around the same time.

PRESTON: Yes. You know, and to him, I guess I'm not as surprised by Ron Wyden saying that, because he tends to be the most liberal of all -- of all the people who actually said something yesterday, but it has lit a fire, so to speak, under the Republican majority right now in the Senate.

And I do think that they are going to be able to pull it together. But I guess when you do have Mark Warner and Dianne Feinstein also voicing concern, that is a problem, in the sense that they tend to work in a bipartisan manner. But I don't think -- we shouldn't equate to what's going on in the Senate to what the House is, because the House is just an absolute disaster.

CUOMO: But you wind up in the same place. David Gregory, we know that every time you take a poll, you're getting close to three out of four Americans say there should be an independent investigation. Is there any chance of that for, ironically, the same reason that we're discussing why these investigations are going. It's a partisan move, Republicans behind an independent counsel, so it probably doesn't happen.

GREGORY: I don't see it happening. No way. And, you know, the Senate is kind of the best hope, because they were proceeding on this in a pretty serious way.

But you know, Chris, you identified it initially. This is really the FBI that's the tip of the spear here. And the FBI has been compromised by Jim Comey because of how politically it acted with regard to this investigation and the Clinton investigation.

So the head of the FBI got so twisted up in knots about what he should disclose to Congress and the public, that I think there are questions about where he will come down, where the FBI and ultimately the Justice Department will come down. That's the issue that we face here.

CAMEROTA: Guys, thank you very much for all of the information.

CUOMO: All right. Another headline for you this morning, the Trump administration sending a message to North Korea by docking a nuclear- powered sub off the shores of South Korea. Is it going any further? We have a live report from North Korea next.

(COMMERCIAL BREAK)

[06:27:36] BLITZER: North Korea carrying out a large-scale artillery drill as part of a military celebration. This comes as the U.S. moves a nuclear submarine into South Korean waters.

CNN's Will Ripley live in Pyongyang, North Korea, the only western TV journalist there right now. His 12th trip to North Korea. What is the state of play on the ground there, Will?

WILL RIPLEY, CNN CORRESPONDENT: it's interesting, Chris. We were taken today to some very colorful celebrations here in Pyongyang. People dancing in the street, celebrating Army Day.

And as we were out there, we were getting reports of this massive long-range artillery exercise happening on the North Korean coast, possibly overseen by Kim Jong-un, the supreme leader of North Korea. That will be confirmed when they release images of this exercise, possibly, in the coming hours.

Now, the testing of long-range artillery is significant and particularly frightening for people in South Korea. Because North Korea has a tremendous amount of long-range artillery pointed right at the Seoul metropolitan area, home to tens of millions of people. In fact, it's those conventional weapons that, at least in the immediate future could potentially be more damaging and kill more people than North Korea's nuclear weapons, which are still being developed.

This as the country is prepared to conduct its sixth nuclear test. Really, at any time, Kim Jong-un could push the button on that according to analysts. It hasn't happened yet. It didn't happen today on this major national holiday. But we'll have to watch and see what happens.

And of course, adding to the complicated situation, an American citizen named Tony Kim was detained here in Pyongyang over the weekend as he was about to board a flight out of the country. He's a professor who is visiting teaching at a local university that accepts foreign -- foreign professors. We don't know what charges he's facing. We don't even know where he's being held right now. But he joins at least two other U.S. citizens who are currently serving hard labor here in North Korea. University of Virginia's Otto Warmbier and naturalized U.S. citizen Kim Dong Chul. You have the hostage situation. And then you have, of course, the escalating military attention including that nuclear submarine that arrived on the waters off the Korean coast just today, Chris. CUOMO: All right. Well, if that's what you're mentioning there.

What is the reaction there in North Korea to that sub being moved into South Korean waters?

RIPLEY: I was speaking with a North Korean soldier today who said that they are not intimidated by this submarine. They're not intimidated by the USS Carl Vinson carrier strike group. They believe that North Korea is already in possession of weapons that could sink that U.S. aircraft carrier. In fact, that was a warning that North Korea put out earlier this week, prompting a fiery response from the Pentagon, warning Pyongyang to stop provoking the U.S.

CUOMO: I will. Stay with me for a second.