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White House: 'Egregious Overreach' by Federal Judge; Trump Administration Rolling Out Tax Reform Plan. Aired 6-6:30a ET

Aired April 26, 2017 - 06:00   ET

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

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: We all have a duty to confront injustice, even when it emanates from the White House.

[05:58:50] UNIDENTIFIED FEMALE: The White House slamming a federal judge who has blocked the president's executive order on sanctuary cities.

UNIDENTIFIED MALE: It's pretty easy to find a left-leaning judge that would block it.

UNIDENTIFIED MALE: We're under no obligation to respect an executive order which violates the U.S. Constitution.

REP. JASON CHAFFETZ (R-UT), OVERSIGHT COMMITTEE CHAIRMAN: I see no information that General Flynn complied with the law.

UNIDENTIFIED MALE: I don't know what he filled out and what he did or did not do.

UNIDENTIFIED MALE: Knowingly falsifying or concealing a material fact is a felony.

UNIDENTIFIED MALE: The question becomes now was it a deliberate omission or was it an accident?

(END VIDEOTAPE)

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

ALISYN CAMEROTA, CNN ANCHOR: We want to welcome our viewers from the United States and around the world. This is NEW DAY. It is Wednesday, April 26, 6 a.m. here in New York.

The Trump White House slamming another federal judge after a third legal setback to the president's immigration orders, accusing the judge of, quote, "egregious overreach" for blocking an order that would have stripped federal funds from sanctuary cities.

CUOMO: Also, lawmakers say Trump's former national security advisor and close aide, retired General Michael Flynn may have committed a crime by failing to properly disclose payments from Russia.

Very busy day, 97 of the Trump presidency. Let's begin with CNN's Joe Johns, live at the White House.

Good morning, Joe.

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

The president's first 100 days ending with a familiar tussle with the federal judiciary. This time, a complaint from the White House that an unelected federal judge ruled against the administration. That judge using the president's own words in the ruling.

And there's also a prediction this morning from the White House chief of staff that the unelected justices of the Supreme Court will eventually vindicate the White House.

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JOHNS (voice-over): The White House blasting a federal court ruling after a San Francisco judge blocked the president's executive action that threatened to strip federal funding from so-called sanctuary cities.

DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: I don't want to defund anybody. I want to give them the money they need to properly operate as a city or a state. If they're going to have sanctuary cities, we may have to do that. Certainly, that would be a weapon.

JOHNS: In a scathing statement, the White House calls Judge William Orrick "an egregious overreach by a single unelected district judge who unilaterally rewrote immigration policy" and starkly accusing officials in sanctuary cities of having "the blood of dead Americans on their hands."

UNIDENTIFIED MALE: Unconstitutional political threats against our cities cannot take away our rights, and they certainly can't steal our tax dollars.

JOHNS: Hours earlier, chief of staff Reince Priebus asserting that the 9th Circuit, which also blocked the administration's first travel ban, is going bananas. A far cry from the Justice Department's subdued response. This isn't the first time President Trump has personally attacked a federal judge.

TRUMP: Somebody said I should not criticize judges. OK, I'll criticize judges.

JOHNS: Earlier this year, he criticized federal Judge James Robart as a "so-called judge" for halting the administration's initial travel ban.

And during the campaign, then-candidate Trump repeatedly declared Judge Gonzalo Curiel of being unfit to handle a lawsuit against Trump University, because he claimed the judge was Mexican. But Curiel was born in Indiana.

TRUMP: He is Hispanic, I believe, and he is a very hostile judge to me. This judge is of Mexican heritage. I'm building a wall. JOHNS: This legal setback comes as bipartisan leaders of the House

Oversight Committee contend that President Trump's former national security advisor, Michael Flynn, may have broken the law by not properly disclosing payments from Russia and Turkey.

REP. ELIJAH CUMMINGS (D-MD), OVERSIGHT COMMITTEE RANKING MEMBER: He was supposed to get permission. He was supposed to report it, and didn't report it.

CHAFFETZ: It appears as if he did take that money. It was inappropriate. And there are repercussions for the violation of law.

JOHNS: The White House pressed repeatedly about the vetting process for the president's first named adviser, who was always with him on the campaign trail.

SPICER: There's always going to be a -- you know, in the case of people who had prior clearance, that between the time that they filled it out and had it adjudicated, they could have engaged in something and whether or not they updated that or not is always the onus is on the individual.

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JOHNS: A very busy day on tap here at the White House. They're expected to roll out the big tax plan, and all 100 members of the United States Senate are expected to come here for an unprecedented briefing of the situation in North Korea -- Chris and Alisyn.

CAMEROTA: OK, Joe. Thank you very much. Let's bring in our political panel. We have CNN political analyst David Gregory; White House reporter for "The Wall Street Journal" Carol Lee; CNN senior legal analyst Jeffrey Toobin.

Jeffrey, let's read what the House judge justified blocked President Trump's order. The judge said, "If there is any doubt about the scope of the order, the president and attorney general have erased it with their public comments. The president has called it" -- the lack of funding -- "a weapon to use against jurisdictions that disagree with his

preferred policies of immigration enforcement, and his press secretary has reiterated that the president intends to ensure that counties and other institutions that remain sanctuary cities don't get federal government funding in compliance with the executive order." How do you see it?

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: It's not that the federal judge said the federal government can never take back this money. What the judge said was, if they want to take back the money, Congress has to authorize it. That it can't just be the executive branch saying, you know, "We will take this money for not complying with this policy."

CAMEROTA: Congress is the branch that funds things.

TOOBIN: Correct. And Congress makes the law about when you can withdraw that money. And according to Judge Orrick, he said that -- that doing this without congressional authorization is unlawful.

CUOMO: Two ironies that we saw in this. I mean, we'll get into how Trump is treating the judiciary and whether that's right or wrong. One, the legal basis for you, you can't mess with the money like that, comes from the case against Sebelius on Obamacare where the Republicans didn't like that President Obama was messing with what states to get which money. So it's an ironic legal basis here that goes back to that argument.

TOOBIN: It was Republican states that were saying, "You attach too many strings to our -- to federal funding." And that is coming back.

CUOMO: So separate issue but the same concept. The second thing is the judge seems to say, or at least the president's lawyers seem to say in this case that this was a bluff. They're not really messing with the money. They're not really changing anything. Did you read that in the decision? And was that interesting to you?

TOOBIN: Well, it is -- it is interesting. The federal -- the White House is trying to have it two ways. On the one hand, they're saying, you know, we are imposing out will on the cities.

CUOMO: Strong.

TOOBIN: But the legal argument is, well, you know, this is just, you know, encouragement. It's not really encouragement; it's strongly imposing our will.

CAMEROTA: David Gregory, the political fallout here.

GREGORY: Well, look, the reality is there are ideological differences that play out in the federal judiciary, just like on the Supreme Court. And so as Chris just mentioned in the case with Sebelius, you see this, as well. What's the proper role of the executive versus the congressional branch of government, the legislative branch of government? So that will be hashed out.

I mean, the immediate political fallout is that yet again, the president is at odds with the judiciary, and there are questions about him overstepping his authority in the realm of immigration policies. So as much as he'll argue about it and want to go after the judiciary, there is a check and a balance on powers that are asserted by this president. That has repercussions. It has the White House reeling.

And when it came to the travel ban, as much as there was discussion about them being vindicated on the law, which there may yet be, there is political fallout from -- from all of this for this president, who at the very least this drives him nuts and seems to have him going in so many directions. And yet, the policy is stopped for now.

CUOMO: Carol Lee, let's tee you up with some of the sound of the president on what he has said about the intentions of this order.

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TRUMP: I don't want to defund anybody. I want to give them the money they need to properly operate as a city or a state. And they're going to have sanctuary cities. We may have to do that. Certainly, that would be a weapon.

(END VIDEO CLIP)

CUOMO: All right. Now obviously, it was that last word that wound up sticking in the judge's head that this was punitive and it was going to be connected.

Ultimately, how does this fight play out for Trump on the issue of sanctuary cities. People have very strong feelings against sanctuary cities. Especially within his base.

CAROL LEE, WHITE HOUSE REPORTER, "THE WALL STREET JOURNAL": Right. And the White House has vowed to, as they did with the travel ban, to continue to fight this. They've said that they'll go all the way to the Supreme Court. This is something that really, the -- President Trump's base really fires them up. This is something we heard him talk about on the campaign trail. It's interesting the legal argument that you were talking about earlier, that the administration is making completely contrast with how they presented this to us in various briefings from the podium. You heard the press secretary talk about this in a very different way and a very strong way that the attorney general did.

And yet, you know, this is all happening in this 100 -- as the president moves towards his 100-day mark. And what we've seen is from the start of the administration until now, he's been dogged by these legal fights based on his executive orders. And not only there, seen him -- he's hemmed in there on his executive power. But he's also really struggling with Congress. And so it comes this timing is something that's really frustrating for the White House, for sure.

TOOBIN: Can I just say one thing in defense of the president here? I would just think this idea that you can't criticize federal judges is absurd. I mean, these people wield enormous power. They are unaccountable. They are unelected. They are big boys and girls, and they can take criticism.

CUOMO: He's not the first one to criticize.

TOOBIN: He's not the first one to criticize.

CAMEROTA: So let's just look at some of the things he said, because I just want to go through it, if you're comfortable with it. This is since, you know, the travel ban and now the sanctuary cities. So you'll remember he attacked Judge Curiel for being Mexican. Thought that that would make him biased somehow. The -- he said that if there were a tariff tax, the "so-called judge" would be to blame. He says the travel ban judges act like "bad high school students." He said that the Hawaiian judge, who then blocked the second travel ban, was just...

CUOMO: It was Sessions, wasn't it?

CAMEROTA: Oh, yes. This was Sessions. Who is just sitting on some island in the Pacific, meaning Hawaii. And now, as you point out, an unelected judge's "egregious overreach" in sanctuary cities. So I hear you. There's freedom of speech. People are free to criticize other people. But do you think that this somehow denigrates the -- that branch that we rely on?

TOOBIN: I'd like to put the -- Judge Curiel statement, too, aside. I think that was racist and harmful.

CUOMO: No, you have to own all of it.

TOOBIN: It doesn't mean you criticize -- every criticism is appropriate.

CUOMO: It depends on how he does it. Can you criticize? Yes. But how he does it is the issue.

TOOBIN: I think the Curiel thing was completely off-limits. But I think all those other statements were completely appropriate. It's that, you know, politics ain't being bad -- judges are not like shrinking violets. They are in the middle of the political mix here, and criticism is completely appropriate.

[06:10:04] CAMEROTA: And you don't think that it has a bigger effect on the public's trust in the judicial branch?

TOOBIN: You know, I don't -- you know, I think the public is pretty savvy. I mean, the public understands that, you know, these are very controversial issues. Some people disagree. And just because one federal judge says something, that -- one thing Trump has not done is said we're going to defy the -- these orders. Like President Andrew Jackson did. So that, I think, would be beyond the pale. But to criticize the orders, I had no problem.

CUOMO: Well, also, I think David Gregory, as the judge of this ongoing argument here right now, sure. He can definitely go after the judiciary. The question is, if you consistently attack the checks and balances provided in the Constitution, is there something of concern about that, or is this just Trump being Trump and people don't take him seriously anyway?

GREGORY: No. But these are all human beings. Right? And they're all different political stripes. If you keep picking on the checks and balances, watch them keep checking and balancing you. That's the reality.

I mean, I think it's exactly right. A lot of examples. If you put Curiel to the side. Are then saying things that others like Jeffery have said? Which is that judges are not -- they are sitting on the bench. They are unelected. They are -- you know, they can't necessarily decide what is a national security threat, for example.

And there is a legitimate attack that is activism by the court, and this happens from both sides. But I think what Trump has done is that he's just -- he keeps picking a fight, and they are going to find a way to check him.

CAMEROTA: Panel, thank you. Stick around. We have many more questions on our other top story for you.

CUOMO: All right. So very provocative question. Did President Trump's former national security adviser commit a crime? Members of the House Oversight Committee are deeply troubled by payments that they say were not recorded properly. We take a look at the substance and the hype next.

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CHAFFETZ: As a former military officer, you simply cannot take money from Russia, Turkey or anybody else. And it appears as if he did take that money. It was inappropriate, and there are repercussions for the violation of law.

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CUOMO: All right. Now, we have two issues going on here. The first one is whether or not Michael Flynn reported his transactions with Russia or Russian connected entities properly. That's what Chaffetz...

CAMEROTA: Which it doesn't sound like he did.

CUOMO: There's an argument. There's an argument to be had there.

The other one is That is the White House insisting on distancing itself from any knowledge about what Michael Flynn may have done.

Let's discuss with David Gregory, Carol Lee and CNN counterterrorism analyst Philip Mudd. Let's play Sean Spicer, press secretary. Here's how he explains the lack of accountability for the White House on all matters Flynn.

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SPICER: Then he asked for documents prior to January 20. And as you know through the Constitution, we didn't assume the White House until January 20 at noon. So we don't have the documents prior to assuming the White House.

And then the third would be they listed for every call and contact that he made, which is an extraordinary number that's a very -- that's a very unwieldy request.

(END VIDEO CLIP)

CUOMO: Phil Mudd, one -- please. When you hear that explanation, just the word "please" pops into your head. How could they not have known? Put the video up of Russia Today of Flynn sitting at the table. You will remember this video, because it's been talked about since Flynn entered the picture during the campaign about what was he doing there. This was in December 2015.

And nobody is saying that this is inherently wrong that he was there. But Phil, there was so much speculation about it and the questions and the money and whether it was right or wrong. How can the White House in the form of Sean Spicer put up any kind of front like they didn't know about this?

PHILIP MUDD, CNN COUNTERTERRORISM ANALYST: Look, there's a couple of issues we have to deal with. One is the tactical and then a second is the strategic. On the tactical level, there's a significant reason the House would want to know what the White House knew.

Let me give you one reason. Whether there are discrepancies between what General Flynn declared for his security clearance at the Pentagon and what he told the White House. So for the White House to say we don't know. We can't find it to me is impeding the investigation.

If you have any documentation, you ought to hand -- there's a bigger question, though, Chris. I can't figure out why Jason Chaffetz is making this request in the first place.

Does the Congress have the ability to investigate a crime? And do they have the ability as the Department of Justice does to go and say, "We want to prosecute a crime"?

CUOMO: No.

MUDD: The FBI is asking for these telephone records. I guarantee it. They're interviewing witnesses. They're asking for travel records.

CUOMO: Right.

MUDD: I don't know why Jason Chaffetz is pretending to say he knows or has the right to declare that General Flynn has committed a crime. It doesn't make sense to me.

CAMEROTA: David Gregory. I mean, beyond the procedure that Phil Mudd is talking about in terms of investigating, let's remember Michael Flynn was the first named adviser to President Trump -- or to then- candidate Trump. He was with him all the time.

CUOMO: Shoulder to shoulder.

CAMEROTA: Shoulder to shoulder. We interviewed him several times here, because he was the spokesperson many times on many subjects for the campaign. So why didn't they vet him more closely?

GREGORY: Well, I think this is the real issue. You have somebody who is extremely close to the candidate and then the president-elect, and then the president, who has ties to a foreign power. And that foreign power has been judged by all of our intelligence agencies in this country to have attempted to manipulate our election.

And he turns out to have lied to the vice president in terms of contact was the Russians. This is a huge problem. And I don't know what the legal exposure is for General Flynn. I think that's a process that the investigation is going through right now. Both congressional, FBI and we'll see how that plays out. But the judgment, the lack of vetting, the inability to apprehend by

the president or anyone else that may be Russia is trying to manipulate us. Maybe we've got a really bad relationship with a big power in the world. That level of naivete, at the very least, should be deeply troubling to people. And that's something that we should be getting to the bottom of. Which I think covers not only whatever contacts there were, but this question of vetting. Why didn't they know, why didn't they push harder? Or did they just excuse all of these contacts?

[06:20:28] CUOMO: Carol, we're doing a regressive analysis here, right? Phil Mudd was saying is this something Congress should be looking at in the first place? Because they don't have this mandate. The FBI/DOJ do. Then you have the accountability piece at the White House that David's talking about in terms of how they could they say they didn't know, and is this about them just trying to escape accountability.

And then you get to the substance of it. Do you believe that, if it is true, that Michael Flynn did not properly record payments from Russia. His lawyers say that's not true, that it was disclosed. But if it is true, the suggestion, how big a deal is that?

LEE: Well, I think we don't exactly know. But if you look at what Michael Flynn has done since he's left the White House, we've learned a number of things about his time while he was with the campaign while before -- shortly before he joined the campaign. We know that he then had to register as a foreign agent, because he did work for the government of Turkey. There's -- obviously, he took money from RT, the Russian state-run media organization.

And then we also know now that he was looking for immunity from investigators into the Russia issue. And this -- this is potentially one of the reasons why. What we've seen from the White House is, you know, they've tried to distance themselves from a number of people. We've seen the same thing with Paul Manafort, the president's former campaign manager. They tried to distance themselves from him.

Now they're trying to distance themselves from Michael Flynn. You know, this is frustrating for them, because I do think that, from their point of view, they didn't really realize or didn't know that all -- all that went into bringing Michael Flynn into the White House. And this is something that continues to evolve, and we learn new things almost weekly. And that's been a very frustrating thing for the president and for his advisers.

But this is going to continue to play out. I don't think we've seen everything that we are going to see in terms of Michael Flynn. And one thing I would say is that one of the questions is what did he do while he was in the White House? That's something that hasn't been explored.

CAMEROTA: Yes.

LEE: And I think that we'll see that being looked into more, too. CAMEROTA: Well, Phil, very quickly, Michael Flynn is looking for immunity. And he has said through his lawyers he has a story to tell. So now Senator Burr is saying publicly no immunity for Michael Flynn. What does that tell you?

MUDD: Well, first it tells me that Senator Burr said they did the right thing. Why would you give the core of the investigation immunity? The FBI will figure out whether he committed something that qualifies as a crime.

And second, to close, there's a perfectly legitimate investigation that Congress can do. No. 2, if a candidate declares for president in 20 months, how do they get cyber protection? So they don't get hacked. And No. 2, how do we get fake news off from the electoral process? You don't have to investigate Michael Flynn to answer those questions. And I think that's where the Congress should go.

CUOMO: Good points. Panel...

CAMEROTA: Panel, thank you.

CUOMO: Jinx. Buy me a Coke.

CAMEROTA: Will do.

President Trump's tax plan -- tax reform plan, it will be unveiled just hours from now. Now we already know some things about it. It contains big tax cuts for corporations. What does it mean for your pocketbook? Details next.

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[06:27:32] CUOMO: President Trump promising a big announcement on tax reform today, while budget talks go down to the wire ahead of a potential government shutdown.

CNN's Suzanne Malveaux is live on Capitol Hill with more. What's the state of play?

SUZANNE MALVEAUX, CNN CORRESPONDENT: Good morning, Chris.

Well, the state of play is that it will officially revealed later this morning. President Trump's tax proposal. It is a far cry from what we heard from the campaign trail when Donald Trump said that Wall Street was getting away with murder and that Wall Street had to pay through taxes. Trump's economic team is pushing first to have tax cuts go to big businesses later. Down the road, perhaps, for families and individuals.

And secondly, that those tax cuts would be paid by higher economic growth. That is something that most economists say doesn't work.

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MALVEAUX (voice-over): President Trump's ambitious tax proposal expected to slash the top corporate tax rate to 15 percent. MICK MULVANEY, WHITE HOUSE BUDGET DIRECTOR: I don't want to confirm

the actual numbers. But I can tell you that number is pretty accurate.

MALVEAUX: This reduction likely to impact not only major corporations, but also owner-operated companies like small businesses and larger ones like Trump's own enterprises.

Multiple outlets also reporting that the blueprint will call for a significant increase in the standard deduction people can claim on their tax returns, which could translate into thousands of dollars in tax savings for millions of Americans. Economists say it would mean a massive increase in the national deficit. And the administration is not expected to detail how they would pay for the cuts, saying only that the spending will be offset by economic growth.

MULVANEY: There will be growth on the other side. In fact, that's what this entire thing is keyed to do.

MALVEAUX: House Republicans are hoping to offset the cost with the border adjustment tax. But "The New York Times" and Politico are reporting that Trump's plan nixes that idea. Also not included: the one trillion dollars in infrastructure spending the president promised during the campaign.

TRUMP: We're like a third-world nation. You look at our airports, our roads, our infrastructure's falling apart.

MALVEAUX: President Trump insisting Tuesday that he'll make good on a different promise, the border wall.

TRUMP: The wall's going to get built. Just in case anybody has any questions.

MALVEAUX: Although this week's must-pass spending bill now won't include a down payment for the wall.

JAKE TAPPER, CNN ANCHOR: Is President Trump ready to sign a government spending bill that does not include that money?

MULVANEY: Yes. We informed the Democrats yesterday that we are not going to insist for now on bricks and mortar.

MALVEAUX: Trump's budget director also flatly rejecting the Democratic demand that subsidies for Obamacare be included in the spending bill.

TAPPER: Is the president willing to go along with that?

MALVEAUX: No.