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White House: 'Egregious Overreach' by Federal Judge; Trump Administration Rolling Out Tax Reform Plan; Interview with Sen. David Perdue. Aired 7-7:30a ET

Aired April 26, 2017 - 07:00   ET

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

MANU RAJU, CNN CORRESPONDENT: Do you believe that Michael Flynn broke the law?

[07:00:05] UNIDENTIFIED MALE: As a former military officer, you simply cannot take money from Russia, Turkey or anybody else.

UNIDENTIFIED MALE: No one should hold back on what Flynn has done.

SEAN SPICER, WHITE HOUSE PRESS SECRETARY: Have the White House produce documents that were not in the possession of the White House is ridiculous.

(END VIDEOTAPE)

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

CHRIS CUOMO, CNN ANCHOR: Good morning. Welcome to your NEW DAY.

Up first, President Trump taking on another federal judge and another court ruling after a third legal setback involving one of his immigration orders. This time, the administration accusing a federal judge of an egregious overreach for ruling, temporarily blocking the administration's effort to withhold billions in federal funds from sanctuary cities. The president calling the ruling ridiculous.

ALISYN CAMEROTA, CNN ANCHOR: Meanwhile, another top story. Lawmakers on both sides believe that former national security adviser Michael Flynn may have committed a crime. They say Flynn failed to properly disclose payments from foreign governments including Russia while he was trying to get security clearance to work in the White House.

It is day 97 of the Trump presidency, and we begin with CNN's Joe Johns. He is live at the White House. What's the latest, Joe?

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

(BEGIN VIDEOTAPE)

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, citing Trump's own words in the decision.

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's ruling "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, the White House 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.

REP. JASON CHAFFETZ (R-UT), OVERSIGHT COMMITTEE CHAIRMAN: 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 a 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.

(END VIDEOTAPE)

JOHNS: There's just a jam-packed agenda on the White House today. Among other things, they're expected to roll out their big tax plan. All 100 members of the United States Senate are expected to come over here to the White House complex to get a briefing on North Korea.

Members of the House of Representatives are expected to get a similar briefing on Capitol Hill later today -- Alisyn and Chris.

CAMEROTA: OK, Joe. Thank you very much for all that background.

So President Trump reacting to the sanctuary cities ruling on Twitter, posting moments ago. "First, the 9th Circuit rules against the ban, and now it hits again on sanctuary cities, both ridiculous rulings. See you in Supreme Court."

Let's discuss with our panel. We have CNN political analysts David Gregory and Abby Phillip; and CNN political -- politics reporter and editor-at-large Chris Cillizza. Great to have all of you.

Let's replay -- replay one more time for our listeners what it was that President Trump said. The language that he used with someone named Bill O'Reilly on FOX just last month.

(BEGIN VIDEO CLIP)

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

(END VIDEO CLIP)

CAMEROTA: OK, David Gregory, it sounds as though that word, that would be a weapon for us to use, is what sort of raised the eyebrow of this judge. Let me read this ruling from Judge Orrick: "If there was doubt about the scope of the order, the president and attorney general have erased it with their public comments. The president called it '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?

DAVID GREGORY, CNN POLITICAL ANALYST: If you get underneath the political back and forth, what you see is the president taking a political stand against sanctuary cities. Those cities that want to defy the federal government on immigration. And that's a politically, you know, charged back and forth.

And then the question of whether or not the executive in our country can use federal funds as a weapon in the way that the president talks about or whether that's the role of Congress. So this is, as Jeffrey Toobin has been talking about it on the program this morning so far, a difficult legal question. And this will play out in the courts.

What is also true is that this now has the president again in fits as he takes on the federal judiciary, which is checking and balancing his attempt to put forward an immigration policy.

CUOMO: Cillizza, there is a little bit of an interesting irony of the dovetailing of politics and law here. The -- you know, when it came to Obamacare, the GOP didn't like that there were strings put on federal money. And they fought against Kathleen Sebelius in court.

Now they're doing the same thing. They're putting strings on federal money. But that's the legal side. Politically, for the president to go after the judiciary, especially when it comes to sanctuary cities, does it hurt him?

CHRIS CILLIZZA, CNN POLITICS REPORTER AND EDITOR AT LARGE: It will help with his base. No question. My guess is you'll see a lot of supportive statements from Republican members of Congress today. Why -- less about sanctuary cities -- though I think that is a piece of it; obviously, part of the immigration debate that is one of the hottest parts. Republican members of Congress are with him on that.

But also because Trump said in his tweet. He says judicial overreach. You either view it as checks and balances, doing their job, or judicial overreach. The Republican base views it as judicial overreach. If he needs a way to unite them or, you know, get them excited again, this is a way to do that. Politically speaking, I hate to say it, because policy wise, he wants us to go through another -- another legal problem with immigration, which is not good for him. From a policy perspective of getting things done. From a political perspective, though, this is a gift to him.

CAMEROTA: Yes, and there you have it, Abby, exactly. Because we've spoken to so many die-hard Trump supporters who are just happy he's trying. They believe he's trying, and these activist judges may be shutting him down. I mean, you know, these are their words. But at least he's talking about it and trying it. I don't know that they really need him to score a win on it. How do you see it?

ABBY PHILLIP, CNN POLITICAL ANALYST: Well, I think for the time being, failing to score a win is maybe sufficient for his supporters, who like you said, are just sort of looking at what his attempts are and saying he's doing exactly what he said he would do even if it doesn't stick around or it isn't durable in the long term.

But at the same time, you know, he's a president and is going to be judged by the impact of his policies. And if the impact is effectively zero, then I think that that is clearly not going to help him.

This is one of those cases, just like the travel ban, where this administration has allowed their words to go far beyond whether it's the letter of the law or their ability in the executive branch, and that hurts them. In some ways, they have to show a little bit more discipline in terms

of how they talk about their policies so that it can survive, you know, the legal or the judicial check on them. Because they want to talk about it so much that they're basically undermining it in the process. And at the end of the day, the president is going to be judged by the impact on policies on people's lives, which in this case, is nothing at this point in time, because the sanctuary cities rule has not actually been in place.

CUOMO: Topic change. Michael Flynn, let's play what the press secretary said about the accountability to the White House for what's being discovered about Michael Flynn. The lawmakers think he may have violated the law by not properly reporting money he was paid by Russia and Russia-connected entities. Here's what he said.

(BEGIN VIDEO CLIP)

[07:10:07] SPICER: Then he asked for documents prior to January 20. 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: So David Gregory, how do they separate themselves from Michael Flynn? Not replying with the request that was sent over by the committee and saying basically this was on Obama. That's what I'm hearing. They're saying that this was all before us. Michael Flynn was Trump's main guy. He was one of his first aides. They begged him to join the administration. He was a national security advisor. And they say, well, we didn't need to know any about this. This all happened before us.

GREGORY: Look, there's -- you know, there's aspects of this that could fall into the realm of him holding back information in the vetting process. But I don't think that absolves the White House on this point. Or the larger issue of why didn't they pay attention to a guy who was influencing the candidate's foreign policy and national security views who had ties to a foreign power.

That foreign power, Russia, which sought to manipulate the election in 2016. It is outrageous.

And the same guy, general Flynn, who wants immunity. Presumably, we know why now, in exchange for his testimony. Who is happy to stand on the stage amid chants of "locker her up" during the campaign, talking about Hillary Clinton. It is beyond ironic. And it's a real black eye for this administration.

This guy was dismissed from the White House within days of becoming a national security adviser. But he's a big part of how Donald Trump as a candidate and president sees the world.

CAMEROTA: Well Chris Cillizza, Michael Flynn says he did disclose these things. Here's the statement from his lawyer just yesterday.

As has previously been reported, General Flynn briefed the Defense Intelligence Agency, a component of the DOD extensively regarding the Russia -- the RT, Russia Television speaking event. Trip both before and after the trip. And he answered any questions that were posed by the DIA concerning the trip during those briefings.

CILLIZZA: Well, Alisyn, the one thing I'll say is you very rarely see a Republican member of Congress talking about a person who was the national security adviser in a Republican administration saying there's no evidence he complied with the law about Michael Flynn. I mean, that quote from Jason Chaffetz is amazing in the way that he chose to phrase it.

But the fact that Jason Chaffetz, who had just come from a classified briefing, was willing to say that. And then in the clip you played in the introduction to the segment, Jason Chaffetz says, "There are penalties for breaking the law."

I talked to someone inside the White House yesterday. And there's -- they don't dispute the idea that Michael Flynn is in some deep, deep trouble.

CUOMO: I just don't get how they say they didn't know about this. The thing about Flynn -- the reports about Flynn have been out since he entered the fray with Trump. People have been saying this. It's implausible to say, yes, this wasn't on us. We didn't know. We didn't vet.

CILLIZZA: The -- the argument that they made, because I had a back and forth with him yesterday. The argument they make is the security clearance for Michael Flynn, which is one of the issues here. The security clearance -- the application for the security clearance was approved under the Obama administration, not under the Trump administration.

Now, to David's broader point, the issue here is, yes, that is an issue. The broader issue is why was this guy, who was Trump's lead surrogate in the campaign, his first named adviser, why was this guy with all of these questions about Russia that close to the president?

CAMEROTA: Abby, we only have ten seconds. How do you see this going?

PHILLIP: Well, I mean, I think the White House is also trying very hard to withhold as much information as possible, which might help them in the short-term. But as we've seen so far in this process, a lot of the stuff does come out. And so it will be interesting to see whether they decide to change their strategy in order to get ahead of the story instead of just being always kind of chasing the tail on this one every single day.

CAMEROTA: Panel, thank you very much.

CUOMO: A big announcement on tax reform expected from the White House today. Budget talks heating up ahead of Friday's deadline to prevent a government shutdown. CNN's Suzanne Malveaux live on Capitol Hill with more. Good morning,

Suzanne.

SUZANNE MALVEAUX, CNN CORRESPONDENT: Hey, good morning, Chris.

Well, certainly, that announcement will be coming later this morning. It is a far cry from what we heard from Donald Trump in the campaign trail slogan, saying that Wall Street is getting away with murder, that they have to pay through taxes. Trump's economic team now pushing first that those tax cuts go to businesses, potentially later to families and individuals.

And secondly, that those spending cuts and those tax cuts are going to be supported by greater economic growth. That is something that many economists say there is no evidence or support of.

(BEGIN VIDEOTAPE)

[07:15:16] 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 willing to sign a government spending bill that does not include that money?

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

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

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

MULVANEY: No.

(END VIDEOTAPE)

MALVEAUX: Those negotiations continue as House Republicans try to revive repealing and replacing Obamacare. Late last night, there was an amendment that was floated. CNN has obtained that amendment, that legislative language. And it was meant to bring moderates and conservative Republicans together on the issue.

At the center of that is, of course, whether or not insurance companies would have to pay for insurance for pre-existing conditions. And that is a non-starter for many moderates.

CAMEROTA: That is a big one. Suzanne, thank you very much.

So there's another legal setback in the -- it's the third one in the president's first 100 days. What can the president do to fulfill his campaign promises? One of his big Senate supporters tells us.

(COMMERCIAL BREAK)

[07:22:01] CAMEROTA: The Trump administration facing another legal challenge to one of his executive orders. A federal judge in San Francisco stopping the president's order that aimed to cut federal money to sanctuary cities. This is the third legal setback in the president's first 100 days.

Joining us to discuss this is and more is Republican Senator David Perdue of Georgia. Good morning, Senator.

SEN. DAVID PERDUE (R), GEORGIA: Good morning, Alisyn.

CAMEROTA: Are you surprised that this federal judge blocked the president's executive order?

PERDUE: Well, I'm disappointed, but I'm not surprised. It's a technicality, of course. But all the president is trying to do is enforce federal law. I find it ironic that this particular situation, the judge is in the city where Kate Steinle was actually murdered by a felon, a proven felon in the United States, who happened to be an illegal immigrant. We've got to stop this. We've got to have cities honoring federal

law. That's all the president was trying to do.

CAMEROTA: I mean, look, you know. You've heard the argument on the other side, that if you cut federal funding, it actually hurts police forces in these cities to try to do their job. And sometimes, they need to work with the immigrant community, even the illegal immigrant community, in order to get tips and solve crimes.

PERDUE: But whatever we have to do, we have to stop this. I mean, we can't have felons killing U.S. citizens. If this person were not an immigrant, this wouldn't be an issue. That city would have probably turned that individual back over to federal authorities.

Look, Alisyn, you and I are called every day to obey laws in our country: local laws, state laws and federal laws. And I applaud the president for trying to rein this in. This should have been done a long time ago.

CAMEROTA: You support the president. So how do you -- what grade do you give him? How do you rate him as we approach the 100th day?

PERDUE: Well, I think to answer that question, you look at what he said he would do. He said he would -- job one would be to try to grow the economy. He's trying to do that by pulling back on the more onerous regulations of the last eight years.

He's trying to move into a tax program that will actually encourage growth. And I believe right now this president is moving at a business pace, not a government pace. I love the people that he's putting around him in the cabinet. I think he's developing priorities. I've been in a few private meetings with him, and he's operating as a very decisive leader.

Look, what we've done internationally, as well, is engage the international community. I mean, he's met with President Xi from China and talked about problems in Asia. He sent Tillerson to Moscow. Vice President Pence just finished 10 days in Asia.

So this is a president that's reengaging with the rest of the world and trying to get our economy going again. So I think he's really accomplishing what he said he would do in the first 100 days.

CAMEROTA: So what's the grade?

PERDUE: Oh, "A"-plus, I think, so far.

CAMEROTA: OK, "A"-plus. So let's look at -- let me put up a list of some of the things that he promised to do in the 100 days, and you can tell me where you see how you rate this. So he promised, you know, to repeal Obamacare. That has failed thus far. He had promised to build the border wall. That's, you know, incomplete. He's still working on that, but that was -- he just seems to have shifted his timeline on that. As you know, the travel ban was shot down. That will list as a fail. Success, withdraw from TPP. Success, get a conservative judge onto

the Supreme Court. Tax reform. He's going to announce that today. But surely, that's still an incomplete. And then he was going to label China a currency manipulator but no longer.

[07:25:06] So if you look at that list, is that still an "A"-plus?

PERDUE: Alisyn, let me tell you how the people in America see this president so far. Consumer confidence is at a 20-year high. CEO confidence is at a 17-year high. Manufacturing confidence is at a 13- year high. What these people who are looking at the results of this president's first 100 days, they're seeing hope. They're seeing this president is serious about rolling back the more onerous regulations that will suck the very life out of the enterprise system.

They're looking at a president that's talking about doing the things we've been talking about for decades about cleaning up our tax system. Becoming more competitive with the rest of the world. Not just trade deals but also our tax situation. We've got to lower our tax rate corporately and we've got to get rid of some of the corporate welfare and eliminate our repatriation tax. The president's talking about that.

With regard to health care, I don't think this is a failure on the part of the president. I think this is clearly on the hands of U.S. Congress. Right now, we are not operating as a cohesive unit here. We've got to get together. Democrats, Republicans, conservative Republicans moderate Republicans. Everybody has got to get together to solve this, because health care is going to collapse. Obamacare is collapsing right now under its own weight.

Let me give you an example. Alisyn, in my home state, we have 96 counties out of 159. There were some 1,100 counties around the country that only have one healthcare carrier in the private sector.

CAMEROTA: Yes.

PERDUE: That's not -- that can't happen. And if those go away, what are those people going to do for insurance? So this is something that we've got to deal with in Congress.

CAMEROTA: Yes. Senator, let me very quickly ask you about the taxes that you raised. Because we understand that the president is making some sort of announcement this week, today. If he lowers the tax rate from 35 percent, the corporate rate from 35 percent to 15 percent, the nonpartisan Tax Policy Center says that that would grow the national debt and reduce revenue by $2.4 trillion over ten years.

Are you comfortable with increasing the debt?

PERDUE: Well, here's what I'm comfortable with. You're talking about rolling the economy. We have $20 trillion in debt. This is why I ran a couple of years ago for the United States Senate.

CAMEROTA: I know. I mean, you're a debt -- you're a debt and deficit hawk. So how can you get on board with this plan? PERDUE: Because here's -- here's what you've got to do to solve this

debt crisis. You can't cut your way out of it. You can't tax your way out of it. You can't simply grow your way out of it. You've got to do all of the above.

First thing you've got to do is get the economy going. Job one is growing the economy. But we've got to move toward fixing our broken budget process. It hasn't worked but four times in 42 years.

Alisyn, do you know that in the United States Congress, we are -- we're called to appropriate and fund the government every year? We have to pass 12 appropriation bills. You know the average over the last 42 years? And that's Democrat and Republican administrations in Congresses. We've averaged 2.5.

This is a fraud perpetrated on the American people by all politicians up here. I've been calling this out since I got here. That's what this president wants to get toward, is to start simplifying and move toward a functioning U.S. form of government.

CAMEROTA: Agreed. But what if it -- what if it increases the debt?

PERDUE: Well, in the short-term, I'm willing to do that if it means that we're going to move these other areas and solve this long-term debt crisis.

Look, the bond market and the foreign bond markets would absolutely accept a long term strategy to solve this debt crisis. That's why I've been calling it. You not going to solve this in ten years. In fact, you're not going to balance this budget as they call it in a ten-year cycle. The problem here is Social Security and Medicare. We have to save Social Security and Medicare over the long term. That's a 20- or 30-year fix, frankly.

CAMEROTA: Senator, very quickly, I know that you're going to be part of this meeting. It's unprecedented to have the whole Senate go to the White House. And you're going to be getting briefed on North Korea. What are you expecting and what are you telling -- advising the president about North Korea?

PERDUE: Well, first, Alisyn, I think your listeners and viewers should be encouraged by the fact that this president is trying to engage. He's engaged foreign leaders. He's engaging leaders in the Congress. He's invited both Democrats and Republicans from the Senate to the White House today. I expect him to give us a demonstrative inside look about what they're thinking about relative to North Korea.

There are things that we can do to put more pressure on North Korea. I'm really encouraged by the president's conversation with President Xi just two weeks ago. I lived in Hong Kong for a while, worked in China many years. I believe that there is a way forward with China to rein in this madman in North Korea.

CAMEROTA: OK. We look forward to hearing what comes out of that meeting. Senator David Perdue, thanks so much for being on NEW DAY.

PERDUE: Thanks, Alisyn.

CAMEROTA: Chris.

CUOMO: The White House about to unveil President Trump's tax reform plan. You heard the discussion there about what the benefits are. We're going to balance it out now with the facts.

(COMMERCIAL BREAK)