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Obamacare Repeal Fails in Senate; Trump: 'Let Obamacare Implode, Then Deal'. Aired 6-6:30a ET

Aired July 28, 2017 - 06:00   ET

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

ANNOUNCER: This is CNN breaking news.

[05:57:24] CHRIS CUOMO CNN ANCHOR: Welcome to our viewers in the United States and around the world. This is NEW DAY. It is Friday, July 28, 6 a.m. here in New York, and we do begin with breaking news.

Republicans' seven-year push to dismantle Obamacare goes down in a stunning defeat. Senator John McCain living up to his nickname, the Maverick, casting the decisive vote against the GOP's last-ditch effort to repeal major parts of Obamacare.

ALISYN CAMEROTA, CNN ANCHOR: What a night it was. President Trump blasting the Senate vote, saying that three senators let the American people down. The president tried to call McCain to sway him, but that did not work. What is next in the health care fight?

Let's get right to CNN's Phil Mattingly. He is live on Capitol Hill with all of the breaking details.

You've had a very long night, Phil.

PHIL MATTINGLY, CNN CONGRESSIONAL CORRESPONDENT: Good morning, Alisyn. A lot of people have had a very long night.

Look, the furious lobbying not just taking place behind the scenes but in public view on the Senate floor. Senate majority leader trying his best just to get the 50 votes he needed to move forward. In the end, one senator made clear wasn't going to happen.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: The ayes are 49; the nays are 51. The motion is not agreed to.

MATTINGLY (voice-over): The Republican Party's seven-year effort to repeal Obamacare collapsing after a dramatic Senate floor vote that dragged on into the early morning. In the end, with Senator John McCain cast a decisive final "no" vote, siding with fellow Republicans Lisa Murkowski and Susan Collins, who voiced their disapproval on every measure voted this week.

The Republicans' last-ditch effort, the skinny repeal amendment, voted down 49-51.

SEN. MITCH MCCONNELL (R-KY), MAJORITY LEADER: This is a disappointment. I regret that our efforts were simply not enough this time.

MATTINGLY: McCain rejecting desperate pleas from Vice President Mike Pence and Senate Majority Leader Mitch McConnell, even taking a phone call from President Trump, according to a source. But none of it swaying the veteran senator, who lived up to his nickname, the Maverick.

SEN. TED CRUZ (R), TEXAS: Tonight was an unfortunate night. It was a sad night. Again, I don't believe this journey is over.

MCCONNELL: So now, Mr. President, it's time to move on.

MATTINGLY: The vote capping off a day of uncertainty as Republicans shuffled back and forth from meetings on the Senate floor, desperately trying to wrangle the votes for a skeleton repeal bill designed simply to move the process into a conference with the House.

But the seeds of failure were sown early Thursday evening as McCain joined colleagues castigating the bill and the process.

MCCAIN: We've got to have Republicans and Democrats sit down together and come up with a bill that gets a majority in both houses.

MATTINGLY: McCain's close friend, Senator Lindsey Graham making clear the merits of the bill were lacking.

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: The skinny bill as policy is a disaster. The skinny bill as a replacement for Obamacare is a fraud.

MATTINGLY: Each seeking assurance from House Speaker Paul Ryan the House would not pass the Senate bill the Senate Republicans were trying to pass themselves. Ryan eventually relenting, saying the House was willing to go to conference, but it wasn't enough for McCain, who said in a statement that the speaker's assurance, quote, "did not ease his concern that this shell of a bill could be taken up and passed at any time."

(END VIDEOTAPE)

MATTINGLY: And Alisyn, I just want to underscore the magnitude of this. Obviously, a very dramatic night and morning.

But the idea that the Senate majority leader would put a bill on the floor and have it fail is big. The idea he would put the bill, the thing that these Republicans have campaigned on for more than seven years, that is the basis for why they have the majority in the Senate, the majority in the House and, at least in part, why they have the White House and have that fail, it is a dramatic, huge, huge deal.

Now, what happens going forward, it's an open question right now, obviously. Senator McConnell saying they're going to move on. We've seen throughout this process kind of fits and starts and failures and revivals. One senior GOP aide who is working on this process, guys, told me in a text this morning, "This was a kill shot. We don't know how we can possibly move forward from here. We'll have to wait and see."

But at least for the moment, the Republican repeal effort seems dead.

CAMEROTA: Oh, my gosh, Phil, thank you for underscoring just how big a night it was on Capitol Hill and how dramatic some of these moments were. We'll be back with you in a moment.

President Trump reacting to the defeat on Twitter vowing again to let Obamacare implode and blaming everyone else.

CNN's Athena Jones is live at the White House with more. Hi, Athena.

ATHENA JONES, CNN WHITE HOUSE CORRESPONDENT: Good morning, Alisyn.

This is, of course, a major setback for this president and this White House, which has struggled to show that they can get big things done legislatively with Republicans in control of both houses of Congress.

The president took to Twitter not long after that bill failed last night to respond, writing, "Three Republicans and 48 Democrats let the American people down. As I said from the beginning, let Obamacare implode, then deal. Watch."

That tweet telegraphing the president's strategy of publicly blaming and shaming those Republicans who blocked this effort, but also highlighting something we've heard from the president for months now, this idea that Obamacare should be allowed to implode or explode or collapse, whatever word you want to use. That, of course, would have wide-ranging implications for a lot of people.

And as we've heard in that earlier piece, it was Arizona Senator John McCain who cast the third "no" vote, this despite the president seeking with Senator McCain, trying to lobby him in a last-minute phone call on the floor as Vice President Mike Pence had gone to the Capitol, hoping to cast a tie-breaking vote. In the end, he's played the role of last-minute lobbyists to try to get this bill through. The question now, what's next, the White House has signaled they're likely to turn their attention towards tax reform.

But the other key question here is whether the White House can show they're good at something other than infighting -- Alisyn, Chris.

CAMEROTA: Athena, thank you very much.

CUOMO: All right. Big morning. Really, it's still going on. The lights in the White House were on until just a couple hours ago. There's every reason to believe the president is still up right now, and these lawmakers are scratching their heads on both sides of the aisle, trying to figure out what happens next. So let's figure out how we got to this point.

Let's bring back Phil Mattingly. Let's bring in CNN senior political analyst Ron Brownstein; CNN political commentator and Washington correspondent for "The New Yorker," Ryan Lizza.

Gentlemen, thank you for being with us, especially after such a long night.

Professor Brownstein, look, on one level, this is a reflection of the obvious, right? Easy to say repeal and replace. Easy to campaign on it. To actually do it when millions and millions of lives are on the line and you have a structure in place, not so easy, and yet this is billed as a shocker. Why?

RON BROWNSTEIN, CNN SENIOR POLITICAL ANALYST: Well, because the majority leader has had a history of pulling rabbits out of his hat, and we've had -- we're in a more parliamentary era, where the parties usually stick together.

I think there are two levels of problems here. I mean, the first is the structural problem, that this bill was revoking health care from over 20 million people. That was the core of what it was doing, not reforming the health care system, not dealing with the underlying cost drivers. But taking away health care from 20 million people, many of whom, as we've talked about many times, were Republican voters.

But I think what ultimately killed it was -- more than that was the tactical choice from the beginning to try to short-circuit all of the process. No hearings, no markup, no engagement with Democrats, trying to do this solely among Republicans. And the House that left them vulnerable to being whip-sawed by every faction. And in the Senate, they just did not have enough margin for error.

[06:05:16] And finally, Chris, I would point out that the president was simply no help in trying to do something this big. Whatever his role internally in terms of trying to wrangle Republicans, and that, you know, you get kind of mixed reviews on that, in terms of the ability to sway the public, it just wasn't there. This bill was looking at an approval rating of under 20 percent of the public supporting it. He was not able to provide any air cover. And in the end, I think all of these forces weighed it down. And proved again that Thomas Jefferson was right when he said a very long time ago, "Great innovation should not be forced upon a slender majority."

They just didn't have the votes to do this solely on a party line basis. And now the question is, are they willing to try to shore up the markets in Obamacare, which are -- which do have problems but would require them, in all likelihood, to get any Democrats, to abandon the quest to significantly retrench Medicaid.

CAMEROTA: Phil Mattingly, you've been up all night. You've been covering this. And I just -- for people who are just waking up, I just want to visit that moment of John McCain walking up in that dramatic and poignant moment and giving the thumbs down. And you could hear -- I don't know if -- right there. If we have the audio there, you can hear that the Democratic side of the chamber was about to erupt, even more so. But Chuck Schumer waved them off, like this is no time to spike the football.

And, you know, it's just -- I mean, after the week that John McCain, you know, has had -- have had, it's just remarkable. I guess that the call that the president made to John McCain -- I don't know if you can fill in some color on that, but it didn't work. MATTINGLY: Yes. No, it didn't at all. That's an audible gasp you're

hearing and also a lot of shuffling. And here's why. Republicans -- sorry, reporters sprinting out of the chamber. Reporters aren't allowed to have cell phones into the chamber. And while we had been hearing kind of in the hours leading up that McCain wasn't quite there yet, there was a chance he was going to be a "no," we've heard that a lot with Senator McCain in various bills up to this point.

So when he came in and put the thumbs down, it was really that dramatic of a moment, everybody sprinting out to file stories to tell their editors, all of that happening. When it comes to what the president did last night, the vice president was the main kind of in- person lobbyist who was on the Hill. He would have been the tiebreaker, had Senator McCain voted for this. What I'm told, in terms of how this happened, is Mike Pence, the vice president, and Senator McCain had stepped off the floor. The vice president working with Senator McCain for about 15, 20 minutes trying to get him there, trying to assure him, trying to kind of make clear that this shell of a bill they were passing wouldn't be signed into law, House Republicans wouldn't pass it.

At one point during that conversation the president connected with the vice president. The vice president handed the phone to Senator McCain, and the president made his pitch. I'm told it wasn't a very long conversation, but John McCain simply wasn't going to be moved.

I think it's worth noting here that throughout the day, McCain kept dropping hints that this was coming. He had several calls with Senator Chuck Schumer -- you have to keep in mind, guys, that the bill that Senator McCain really cares about is on deck, the National Defense Authorization Act. There's more talk from him, I'm told, to Democrats about what was happening now.

So the signs were there, but the fact that Republicans couldn't figure out a way to get him to buy into this, it was a major moment, and I can tell you that, even as leaders kind of got their heads around the fact that he wasn't going to come around, even as dramatic as it was in the Senate chamber for the members themselves and the staff that I've been talking to this morning, they just thought they were going to get there. They thought they had figured out a way to keep the process moving. And to have it short-circuited like that in such a dramatic moment, it was -- it was breathtaking. It really was.

CUOMO: And John McCain has a gift for political theater. You know, ordinarily, there's a roll call. They call the name and you vote. He didn't follow that process. He just walked in before the roll call, gave the thumbs down, and then went and stood with Lisa Murkowski of Alaska.

CAMEROTA: It's a statement -- no way other -- to see it in another way other than he was making a statement after, you know, obviously his surgery and being called back from this. And you have to wonder if Republicans are happy that they called him back from his convalescence in Arizona.

CUOMO: Well, this is a -- look, this is a man who votes his conscience. And also, he had been saying something else, Ryan Lizza. He had been talking to his governor.

When you look at Arizona, when you look at Maine where Collins is from, when you look at Alaska, you have similar dynamics at play with why this bill -- which didn't touch Medicaid. People have to remember that. That's part of the skinny. Medicaid wasn't touched. That's a non-starter in states where you have big pockets of people who are either old or poor, and those states all check those boxes. And he had been talking to his governor.

So it made sense -- not political sense but real economic sense to real people's lives -- that there would be difficulty for these senators in going along with something that just sucks money out of the system, essentially, and takes care of the young and the healthy.

[06:10:09] RYAN LIZZA, CNN POLITICAL ANALYST: Yes, I mean, look, sometimes you know, things here in Washington really do happen the way they happen in the movies. You know, a senator gets off his -- I don't want to say death bed, but he gets out of a serious operation with a very serious diagnosis. You know, obviously the issue of health care is related to that, comes to Washington, makes a dramatic speech, Senator McCain. And what was at the core of his speech the other day? It was about the process.

Let's be honest. John McCain is not a health care wonk. This is not his issue. He's never taken a great interest in health care, but he cared about the process.

And as Ron Brownstein said, there were no hearings, no markup, and that what he was being asked to do this morning, a couple of hours ago, was just frankly a crazy process of, don't worry, this bill is not what we actually want to go into law. We just want to get it across the Senate line, just pushed into a conference committee, and we'll keep going.

You know, I think a lot of people looked at that and said that's really not the way that the United States Congress is supposed to work, but one person who has made a huge -- he's made this the core issue for him is John McCain. Interestingly, he did vote for one of the other bills this week. He was a "yes" vote on one of the other three bills that came along.

But, you know, he not only delivered the death knell for this health care process, but perhaps for President Trump's entire presidency in this first year. I mean, his entire legislative agenda was premised on passing health care as part of this multilayered process of health care, tax reform and the budget. And that is all now in shambles.

CAMEROTA: Here's what President Trump had to say via Twitter. He said three Republicans and 48 Democrats let the American people down. As I said from the beginning, let Obamacare implode. Then deal. Watch.

So Ron, how much of this can you lay at the president's feet? I mean, this wasn't ever his plan, obviously. This was the Republicans for the past seven years. But where is President Trump on this today? BROWNSTEIN: Yes, I think there are several points you can make on

that. First, I mean, he made the fundamental choice at the beginning to go in a very different direction than he promised during the campaign when he famously pledged to not cut Medicaid, Medicare or Social Security. He went all the way down the road with the Ryan-kind of infused House bill that was fundamentally about rolling back the government role in health care, cutting taxes, reducing federal spending on both subsidies and fundamentally transforming Medicaid.

That was the problem; that was the core problem. They could never get over the line with that kind of maximal bill, I think largely because it hurt so many of their own constituents and, in the process, turned against them several of the key Republican governors, as well as every single interest in the medical community, from doctors and hospitals to all of the patient groups and AARP and so forth.

But I think the biggest thing the president did was what he didn't do. The failure to build any public support for this bill, which was laboring under opposition from a significant majority of the public, including older and blue-collar whites on net who are cornerstones of the Republican coalition. He did not provide them the air cover they needed. And he did not question a process that cut out Democrats from the beginning and left them with very little margin for error.

Now the question is, are they willing to just deal with the real problem and the exchanges? But that, you know, in listening to Mitch McConnell last night, it does not sound like they're planning on going down that route.

CAMEROTA: All right. We're going to talk about that next. All the viewers want to know what -- where health care will stand after today. So that's next.

CUOMO: We're going to talk about it, because what happens now, not the politics of it, the policy, the reality, what the president just suggested, let the ACA implode.

One, is that a fair reflection of what's going on? And is that the real risk for Republicans, allowing people to lose health care on their watch. We've got a great panel next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

[06:17:55] SEN. MITCH MCCONNELL (R-KY), MAJORITY LEADER: And as I said, we look forward to our colleagues on the other side suggesting what they have in mind. So now, Mr. President, it's time to move on.

(END VIDEO CLIP)

CUOMO: Senator McConnell, not just tired after an all-night effort, but crestfallen. They failed, the Republicans, to get their own version of repeal and replace for the ACA. So now what? What does this mean to the president's agenda? What does this mean to Americans' ability to depend on health care? Let's bring back our panel. Perfect group of reporters for this. Ron

Brownstein, Ryan Lizza, Phil Mattingly.

Phil, so in a way, this sets us up for where we should have been all along, which is Republicans, you're in control, but you have to work with the Democrats. We know there are issues in the individual markets. We also know now there is a higher level of popularity for the ACA than we've seen since its inception, so fix what's there. Is that a reality?

MATTINGLY: It's a difficult dynamic. Look, there are Republicans who are game for this. There's a recognition that short-term stabilization, some type of funding mechanism for the marketplace right now. Obviously, the cost-sharing reduction money for the insurers, that needs to be settled, as well. Lamar Alexander, who chairs the Senate Health Committee, health committee, has made clear he wants hearings on this. He's ready to move forward on a bipartisan basis.

But Chris, I think this is a really important component here. The baseline for Republicans that they've campaigned on is repeal. If repeal is not what they're pursuing, conservatives have made very clear they're not going to help fix something. They were never for a fix. They didn't campaign on fixes.

And so basically, you would have to get individuals who made very clear that is their only position here to modify that stance in order for people like Speaker Paul Ryan or Senate Majority Leader Mitch McConnell to ever bring something like that to the floor.

Look, we've got a long process ahead of us. There's clearly going to be work done in both the Senate and the House at the committee level. Whether or not that can be raised to the idea where you actually pass something and then send it to the president's desk, it's an open question right now, because there's a lot of uncertainty whether conservatives would ever agree, not to just come on board with something like that, but to allow it to even move through the process.

[06:20:10] CAMEROTA: So Ron, talk about the ripple effect, OK, of what happened last night. The tax reform -- the success of the health care battle had a direct correlation to what happens with tax reform and the budget, et cetera, et cetera. So now where does this leave us?

BROWNSTEIN: Right. They wanted the dollars from particularly the Medicaid cuts that would have resurfaced unquestionably in a conference committee as part of a tax reform. Look, it could have a rebound effect, where you could see cutting taxes is easier for Republicans to coalesce around than retrenching a new entitlement that over 20 million people now depend upon.

So it is possible that they may rally around the idea of cutting taxes, although there is, again, a divide there on whether it is going to be revenue neutral and thus permanent or a tax -- a net tax cut and only last ten years. I think on health care, I mean, the key question is "Are you willing to stabilize the exchanges?" Because the problem has been, in the individual market, as Chris

pointed out, not in Medicaid. And in fact, the problem in the individual market, it has been worse in states that did not expand Medicaid. There are things you can do, but as Phil, I think, correctly points out, it's not clear that Republicans want to do then, which is an enormous roll of the dice. Because they are now running government. They ultimately, I think, will be accountable for outcomes. And if this burn -- totally torches on their watch, that could be an issue in 2018.

CUOMO: One quick more beat on this, Ryan Lizza. The president's reaction, the president's posture, his recommendation: let the ACA implode. Let's put to the side for a second that there is misinformation and misperception that the ACA is in a death spiral. Let's just put that to the side because this is about politics, not necessarily reality.

His sell is let it fail. That's a tricky dynamic for the steward of American well-being: let it fail. What would that mean? That would mean let people suffer. Let care not be delivered. Is that a saleable proposition?

LIZZA: Well, I mean, just think of what the presidential oath is. The presidential oath is to take care that the laws are faithfully executed. And the idea that the president of the United States would -- would tweet so glibly that, as president, he's not going to support a law that is not just on the books, but an attempt to repeal it has just failed, so it's the law of the land.

I think the real question is does he mean it and will he actually take affirmative actions to undermine the law because, as you pointed out, Chris, it's not -- you know, there was a lot of exaggeration about the death spiral of Obamacare. It has some serious problems that both Democrats and Republicans agree on.

But it's not just going to collapse the way Trump says unless the federal government takes some affirmative actions to do that. So I think that's one major question, is does anything from the White House push that process along?

Secondly, they have a real process issue in Congress, as Phil and Ron were noting. This -- they have to do a new budget. When they do the new budget, the old budget reconciliation bill that they were using to push health care through -- I know this is a little confusing, that then disappears, and they no longer have this reconciliation process, this 50-vote process in the Senate. They won't have that anymore.

So it really is sort of the end of the line for getting this through the Senate on a 50-vote margin.

CAMEROTA: Hey, Phil, we have less than a minute. Next agenda item, the border wall. Mexico does not appear to be paying for it. And so there is a big budget item, $1.6 billion. Where is Capitol Hill on this?

MATTINGLY: The House is through. They got it done yesterday. The Republicans were able to kind of insert it in the bill, not have to take a stand-alone vote on that issue and were able to get it through, even though there were a couple of Republicans who were opposed to it.

Here's the issue: Senate Democrats have made very clear they are not going to support anything that funds the border wall. The other issue is when you're talking about this process moving forward, Senate Democrats are going to be needed to actually pass this. This is the appropriations process, not budget reconciliation. You need 60 votes to move forward, which means Republicans need at least eight Democrats to come on board.

So long as they hold firm on that, we've got a problem, and leadership has a problem. It will be interesting to see negotiations play out going forward. But Senator Chuck Schumer, the Democratic leader in the Senate, has made very clear, the border wall is the issue that is their red line. They will not vote for anything that funds a border all. So we're looking for another fight on appropriations when it comes to that issue, one of a series of very, very hefty fights to come.

And guys, obviously, the next big issue is tax reform. We'll see how that goes. But that's going to be a long and very complicated process, as well.

[06:25:00] CUOMO: Well, one little note for people, because we like to tell you what to look for going forward. The best indication that there's a chance that something positive can be done on health care on a bipartisan basis will be in the form of drug pricing. If you see Republicans and Democrats in the short term come out with something on drug pricing -- because that's the biggest area...

CAMEROTA: Of agreement, for sure.

Gentlemen, thank you very much for all that reporting.

So politics uncensored. White House communications director Anthony Scaramucci exposing not only a war in the West Wing, but a vulgar rant-filled mindset in this interview. Ryan Lizza had it. He shares his extraordinary interview with us next.

(COMMERCIAL BREAK)

CAMEROTA: All right. So infighting and chaos appears to be consuming the Trump White House as there's this war between two of the president's top advisers, and it is now playing out in public.

CUOMO: At least two.

CAMEROTA: Sure. OK. Here's the picture, if you need a visual of this...

CUOMO: Of two of them.

CAMEROTA: ... of this stand-off. There's tension between the White House communications director, Anthony Scaramucci, and chief of staff Reince Priebus in the Oval Office. And that photograph captures it. CUOMO: Look, this is one of those rare moments where we now know what

has been suspected. What's going on in this White House is atypical, and it is counterproductive.

Yesterday, we had an exclusive interview with Anthony Scaramucci. He came on to explain what was going on, the frustration about leaks, the disorder.