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New Report Shows Tax Plan Would Add $1 Trillion to Deficit; Defense Argued Shooting Was Accidental Bullet Ricocheted in Kate Steinle Killing; NYT: Trump Pressed Top Republicans to End Senate Russia Probe. Aired 6-6:30a ET

Aired December 01, 2017 - 06:00   ET

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

(BEGIN VIDEOTAPE)

SEN. MITCH MCCONNELL (R-KY), MAJORITY LEADER: We're on the cusp of a great victory for the country.

[05:59:36] UNIDENTIFIED FEMALE: Republican leaders scrambling to salvage their tax bill.

UNIDENTIFIED MALE: Shoot the debt, the deficit. Senator Corker making very clear he needs a solution.

SEN. ANGUS KING (I), MAINE: Nobody has seen the bill. It's not the way the Senate is supposed to work.

UNIDENTIFIED MALE (via phone): President Trump phoned several top Republicans in the Senate to wrap up the Russia investigation.

UNIDENTIFIED MALE: I think the president gets frustrated, because he doesn't think he did anything.

JEFFREY TOOBIN, CNN CHIEF LEGAL ANALYST: It's not up to him to decide whether he's innocent or not.

UNIDENTIFIED FEMALE: Reports of a tentative White House plan to replace the secretary of state swirling around Washington.

UNIDENTIFIED FEMALE: Do you want Rex Tillerson on the job, Mr. President?

DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: He's here. Rex is here.

UNIDENTIFIED MALE: It's clear that he's not getting support from the White House.

(END VIDEOTAPE)

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

CHRIS CUOMO, CNN ANCHOR: Welcome to our viewers in the United States and around the world. This is your NEW DAY. It is Friday, December 1, 6 a.m. here in New York. Alisyn is off. Erica Hill here once again, holding it down on a big Friday. ERICA HILL, CNN ANCHOR/CORRESPONDENT: There's a lot going on.

CUOMO: Here's our starting line. The Senate Republican tax bill hits a $1 trillion snag. Republicans are now forced to make big changes to their plan to win over deficit hawks who just can't stomach adding that much to the nation's debt.

What is now clear to a number of Republicans is this: this tax plan is not going to pay for itself. It would not, therefore, reduce the deficit, as the Trump administration promised.

That said, on the other side, the GOP and the president are desperate for a legislative win. But there's a different headline out there this morning about where the president's head has been. A new report in "The New York Times" says the president repeatedly urged several senior Senate Republicans, including the chairman of the Senate Intel Committee, to end the Russia investigation.

This is a highly unusual move for any president. And it comes as the special counsel moves closer to Trump's inner circle.

HILL: That Russia investigation isn't the only thing capturing President Trump's attention. CNN has learned the president has been stewing in recent days, aggravated, he's not getting praise for his accomplishments and still annoyed with Attorney General Jeff Sessions over his recusal from the Russia probe.

All of this as President Trump is also displeased with the secretary of state. CNN has learned the White House wants to publicly shame Rex Tillerson, even floating names of who will replace him. Given the major international crisis with North Korea, should the president be undermining the nation's top diplomat? We have it all covered.

Let's begin with CNN's Suzanne Malveaux, who's live on Capitol Hill with our top story. Suzanne, good morning.

SUZANNE MALVEAUX, CNN CORRESPONDENT: Good morning, Erica.

This is certainly a make-or-break moment for President Trump, as well as his party. They are desperately trying to get some sort of significant legislative achievement. They have run into a snag, a trillion-dollar problem here for the tax bill as senators continue to jockey what gets in, what is taken out of this bill. Can they get the votes?

(BEGIN VIDEOTAPE)

MCCONNELL: We're on the cusp of a great victory for the country.

MALVEAUX: The battle over the Senate Republican tax bill hitting a snag in the 11th hour. Retiring Senator Bob Corker withholding his vote Thursday after a new report by the Joint Committee on Taxation estimates the bill would increase the deficit by $1 trillion over 10 years and would not produce enough revenue to offset the cost of the plan. Corker demanding a trigger to automatically raise taxes if the bill

fails to generate as much economic growth as promised. But the Senate rule-keeper declaring such a proposal would not be allowed as written. A showdown unfolding on the Senate floor as a group of Republican senators huddled around holdouts Corker, Jeff Flake, and Ron Johnson.

KING: I submitted a very simple amendment that simply said send the bill back to the Finance Committee and have them report back with a deficit-neutral bill. A bill that doesn't blow a hole in the deficit. To call this a circus would be an insult to circuses.

MALVEAUX: Republicans now scrambling to appease deficit hawks. Senator Lindsey Graham acknowledging Corker's concerns are real but adding, "Failure is not an option." And Senate Majority Leader Mitch McConnell can only afford to lose two Republican votes. This as Senator Elizabeth Warren demanding to see the Treasury Department economic analysis after Steve Mnuchin promised the American people this.

STEVEN MNUCHIN, TREASURY SECRETARY: We think there will be $2 trillion of growth. So we think this tax plan will cut down the deficit by a trillion dollars. That's a large number.

MALVEAUX: The Treasury's inspector general launching a probe after receiving this letter from Warren, questioning whether Mnuchin misled the public or refuses to release the report because those analyses would contradict the treasury secretary's claims.

REP. NANCY PELOSI (D-CA), MINORITY LEADER: It's almost criminal. It's a lethal attack on the middle class.

MALVEAUX: Democrats continue to hammer the GOP tax plan, asserting the bill will hurt lower-income Americans while benefitting the wealthy. The Congressional Budget Office predicts those earning less than 30,000 will be worse off by 2019. And those making less than 75,000 worse off by 2027. Removing Obamacare's individual mandate would also result in 13 million fewer Americans having health coverage over the next decade.

(END VIDEOTAPE)

MALVEAUX: Senate Majority Leader Mitch McConnell says that the voting process will continue at 11 a.m. this morning. Some of the changes that they are thinking about here for the bill, reinstating alternative minimum tax for some corporations and wealthy individuals. Also potentially raising the corporate tax rate from 20 percent above after several years. We'll see if either one of those things satisfies some of these lawmakers -- Erica, Chris.

CUOMO: All right, Suzanne, thank you very much.

So a lot of people are asking, why does this seem so rushed? It's because it is rushed. You have to remember, this is being done in a short-handed way to make it under a reconciliation bill. So they don't need to worry about a filibuster. They can just get a simple majority and get these changes through. So all these rules and time that go along with this kind of maneuver, that's why it's rushed.

Let's bring in CNN political commentator and host of CNN's "Smerconish," Michael Smerconish; and CNN political analyst David Gregory.

So you have the rush, and there's a good answer for that. Then you have the substance of what is being brought to bear, because of the rush. And there's not so many good answers for that. This bill just does not seem to deliver on what was promised by the president, that it would be over-weighted towards the middle class, that it was going to make these fundamental changes to the deficit. Just doesn't seem to be there.

MICHAEL SMERCONISH, HOST, "SMERCONISH": Well, Chris, welcome to the 1980s.

CUOMO: That's what happens when you pause, David. When you pause, Smerconish will come in...

DAVID GREGORY: You didn't say what you were coming to.

CUOMO: ... with that Philly first -- go ahead, Michael.

SMERCONISH: Welcome to the 1980s. We are having a debate over supply-side economics. Take a look. It's the laugher curve. Except in this instance, the joint committee has just determined that even after a massive cut in taxes, like is being proposed in this case, you'll still be a trillion dollars shy.

And so that's what brings about this scenario where they say, "Well, we're going to put in some type of a trigger option where taxes will increase if, in fact, it can't pay for itself." How is that deficit- neutral? You can't have it both ways, according to the report that was just issued yesterday.

CUOMO: Right. That's why the parliamentarian stepped in, David, and said -- this parliamentarian, this mysterious figure. We actually had the former one on the show just so people could see who this person is and what they do. It has to be budget neutral in order to make the reconciliation to get the simple majority. That trigger would make it that way, so it doesn't work. They have to go back to the drawing board.

David, please expound.

GREGORY: Well, I'd just say, let's just, you know, pull back and talk about the fascinating dynamic here. You have a president who's driving this, who is riding this great economic wave of great bull market taking all the credit for it and saying it's partly because of expectations, which it is, of tax reform and a big bill of tax relief for corporate America that is already enjoying a surge in profits. And so you can keep this thing going. And that's where his focus has been.

Meanwhile, you've got Republican holdouts, including those who are not running for reelection who are standing up and saying, "Wait a minute. We're conservatives. We don't want the deficit to explode here." And you have the rules. You have the reports. And you still have this article of faith that there's going to be this massive economic growth that will wash all of these problems away.

So at the end of today, I don't know where we end up. Because they're going to have to take some steps that are going to be pretty unpalatable to bring this number back into line with concerns of those like a Corker and Flake who don't want to see the deficit go up the way that it's predicted to do.

HILL: Let's also not forget, too, partially to your point, David, part of the reason we're talking about this going so quickly is because the president wants a win. That's the other thing, with the president shepherding this through. Obviously, the hope that it will spur growth. The hope that that will be passed on, of course, to average Americans.

But Michael, when we look at this, one of the big questions is how does it really affect the average American? Because the little bits that we're getting don't look great. And there aren't a lot of selling points in there, again, from what we know.

SMERCONISH: Well, you also saw the president explaining when he was in Kansas that he wouldn't personally benefit from this or someone who's in his income bracket or his wealth category wouldn't benefit. And there's been a lot written in the last 24 hours that calls that into question.

But Erica, I think you asked the right question. Because at a certain point, those folks in red states who voted for him on the promise of what he would do for the middle class, what he would do for those traditionally Democratic high school educated voters who abandoned the Democratic Party and voted for the GOP candidate. You know, they need some type of a return.

If I could just say one thing about David's point, because I think it was excellent. One of the difficulties that the GOP will have today in passing this is -- is making the case that they need it for economic growth, because the economy is in such a sad state. We all saw where the Dow closed yesterday.

We're all aware of the fact that the unemployment rate is at 4.1 percent. And Goldman Sachs says we'll probably head to 3.5 percent. So things seem to be quite robust as they were for the last few years of the Obama administration. Therefore, why do you need such significant tax cuts?

CUOMO: Right. Greenspan came out and said the same thing. It's hard to celebrate the robust growth of this past quarter, which was over 3 percent, and say that you need this type of stimulus through a tax cut.

But you know, that's -- that's a high-minded thing. There's going to be a more basic level of analysis, which is what did they promise? What are they going to deliver? To your point, you got up early. You're helping me out on a Friday.

Thank you. We're going to answer the question about whether or not it helps the president this morning. We've got a fact wall coming up on that.

But Treasury Secretary Mnuchin, David Gregory, he comes into the mix here. He came out saying, "Here's what this will do. I'm the head of the treasury. You have to believe me, and I'm going to back it up with numbers."

First, his promise.

(BEGIN VIDEO CLIP)

MNUCHIN: Not only will this pay for itself, but it will pay down debt.

(END VIDEO CLIP)

CUOMO: All right. And to put meat on the bones of that, he said, "And the treasury under me, we're going to do an analysis. And I'm going to have a ton of my people on it, and we're going to show this. Nothing.

So David, now he's in a jam. He's got to prove what's going on. He's got Elizabeth Warren on his butt, going to the inspector general for the treasury saying there either is none, which means what happened to the money that was spent on this, if there was any. Or there, you know, is one; and he doesn't want to put it out, and that's malfeasance.

GREGORY: Right. And I mean, this is speculative at best about what the tax cuts are on economic growth in the future. This notion that these things pay for themselves. Republicans, conservatives, wouldn't buy this if it were coming from a Democratic administration.

And it's just as speculative here. And as Michael says, you're in a period of two things: of actually, pretty modest economic growth right now. That's been pretty much stalled. And that's why, you know -- his figures, by the way, his analysis and speculation is far higher than what we've heard from Republican leaders.

But there's a promise here that I think extends across the board of the kind of trickle-down effect of helping corporate America. Corporate profits are up. The stocks perform well. Yes, the top 1 percent of the country benefit if they have a lot of securities.

There's a lot of middle-class folks who own a lot of securities, too, in their pension plans, in their retirement plans, through companies, as well. So I think that's a big selling point. Certainly, from the White House, it's a big selling point. And from a lot of Republicans, too.

CUOMO: Gentlemen, appreciate it. Happy Friday. David, forgive me. I thought I said your name. I thought the indication was there. I'm still learning. Appreciate it, bro. GREGORY: I'm just always waiting for my name to be called up.

CUOMO: And it is a beautiful name. It is a beautiful name.

HILL: And it is the thought that counts. Right?

CUOMO: Yes.

HILL: So there we go.

CUOMO: To the extent, I think, at all.

HILL: In other news, President Trump tweeting this morning after an undocumented immigrant was found not guilty of murder in the 2015 shooting death of Kate Steinle. The president's latest tweet, posted moments ago, reads, "The Kate Steinle killer came back and back over the weakly protected Obama border, always committing crimes and being violent, and yet this info was not used in court. His exoneration is a complete travesty of justice. Build the wall."

Last night the president slamming that verdict as disgraceful.

CUOMO: Right. Now, it wasn't used in court, because it's not relevant to the elements of the homicide charge that was there. Jose Ines Garcia Zarate's defense attorney hit back at the president, because remember, this has all been politicized.

And the attorney advised the president of the United States to remember to respect the verdict, since he and members of his campaign are under investigation and also presumed innocent.

Now let's get back to what matters here. The jury acquitted Zarate of murder, involuntary manslaughter and assault with a firearm. You're going to have to look at the facts and the arguments to understand how they could come to that conclusion. The politics is very masking here. He was convicted of being a felon in possession of a firearm. That will bring a three-year sentence. But that's not what people wanted to see in this if they are outraged about the fact that the man was in the country.

The U.S. immigration officials say they're going to deport him. It would be the sixth time. Now, this should be about the family. We're talking about this kind of trial.

Steinle's family says they are saddened and shocked by the verdict. For them, all the politics aside, this is just more pain. And they've been thrust into this political maelstrom.

HILL: Which is one they didn't want.

And to your point, too, what's gotten lost in a lot of this, it's because it's become so politicized, immigration was not on trial here. To your point, this was -- this was about murder. This was about different charges that were not necessarily related to immigration or immigration status. And yet, sometimes when you see some of the tweets out there, it gives the impression that it was. CUOMO: And I get it because of this. This isn't the legal analysis.

This isn't the standard for the trial. I know that. I'm a lawyer. But for the fact that this man was here in this country and he was here illegally, Kate Steinle...

HILL: Would be here.

CUOMO: ... would not be dead. And that's really tough for a lot of people to take, including her family.

HILL: It is. A new report revealing how President Trump tried to press top Senate Republicans to halt the Russia investigation this past summer. We're going to speak with one of the reporters who broke that story, next.

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[06:18:41] CUOMO: "The New York Times" reported President Trump pressed top Senate Republicans to end their Russia investigation last summer. The head of the Senate Intel Committee, just one of the members he approached.

Joining us on the phone is Mr. Alex Burns, co-author of the "New York Times" report.

I always know when you're on the job, because you've got to be on the phone, Alex. Thank you for joining us this morning. What do you know?

ALEX BURNS, "NEW YORK TIMES REPORTER"/CNN POLITICAL ANALYST (via phone): Thanks, Chris. Good morning.

What our reporting shows is that over the summer, the president contacted several members of the Senate Intelligence Committee, as well as Senate Majority Leader Mitch McConnell to apply what they described in interviews and to their friends as entirely unsubtle pressure, pushing them to wrap up their investigation of the Russia investigation.

And the presidential election in 2016, the words that the president used repeatedly, according to Richard Burr, was move on. There was no ambiguity about the message the president was trying to send.

And the word out of the White House in response to your reporting is the president didn't exert any undue influence. That, of course, a legal term of art. It's interesting, though. Your responses from the Republican heads seem to give the president a pass. Burr saying this is about his being politically inexperienced. And you've heard echoes of that from others. What's your take?

[06:20:00] BURNS: Well, what the senator is saying now is certainly that the president, you know, may have been operating from a position of political experience or naivete about the legal implications of what he was doing.

What Senator Burr said over the summer, and he did not confirm this directly, but what Senator Burr said over the summer to his colleagues, his political allies. This was a forceful active interference by the president and one that made him uncomfortable to the point that he immediately told his colleagues, told Senator McConnell and has tried to limit his direct contact with the president since then.

In addition to Senator Burr, the president spoke with Senator Roy Blunt of Missouri, another member of the Intelligence Committee and another member who told his colleagues that it was an uncomfortable conversation and one that folks around the Senate Intelligence Committee and around Senate Republican leadership were concerned might suggest that the president was behaving recklessly just in general around the probe.

CUOMO: Well, they used the word "impropriety." The Democrats stronger on that. Feinstein saying that this is about the violation of separation of powers. That doesn't really exist as an actionable thing within our government right now.

But what is their take about what this means and what should be done about it.

BURNS: Well, for the Democrats who are involved, the investigation for Democrats, frankly outside the investigation who are simply -- have a lot riding on the investigation. The notion of the president trying to push Republicans to wind this thing down and protect him is politically offensive to them, and their contention is that it's legally perilous.

I think that, on the Republican side, you know, you read the statement from the White House. That word "undue" is doing a lot of work there. That there's no undue influence the president is trying to apply. They're not denying that he attempted to influence Senator Burr or other folks who were involved in supervising the investigation.

CUOMO: All right. Alex Burns, I appreciate it. Thank you very much, my friend. This is an important story.

BURNS: Thanks, Chris.

CUOMO: Let's bring back in right now Michael Smerconish and David Gregory as we unpack a little bit more now. One of the other things that stood out in that reporting from Alex and his -- and his fellow reporters there is the piece about Mitch McConnell, as well who, according to that reporting, told associates that it was -- that the president really can't really separate -- I don't think this comes as a surprise. Can't separate this traditionally skeptic view Republicans have with Russia with the way -- with his lens and the way he's looking at things and that willingness to separate all of this.

Because no matter what, the minute Russia comes up, it seems that it's in some way questioning the validity of the election, which we all know President Trump won.

David, how much of an issue is that, this distraction? GREGORY: Oh, it's an obsession. You know, that to mention Russia is

to say that they fixed the election for Donald Trump. That was not the case.

And by the way, Trump's obsessiveness about this investigation, and his paranoia about it has actually made it much more about him than it might otherwise be.

He fired the FBI director, because he didn't like the investigation. I mean, so talk about wanting to apply undue pressure. That's what's being investigated, whether he obstructed justice. I mean, brought on a major piece of this investigation onto himself, including getting an independent counsel sicced on him because of his own actions, because of his own paranoia.

The reality is that a lot of people don't like congressional investigations on both sides of the aisle. See Benghazi. But there was an attempt to manipulate our electoral system. It didn't fix the election, didn't sway the election. But that attempt was there on the part of Russians. Congress should be getting to the bottom of it. And the president wants it to stop, because it cuts too close to home.

And again, this pressure that he put on lawmakers, we've seen it not only in that realm but pressuring his own Justice Department. And it's not -- obviously, it's not up to him to decide what should be done with these investigations.

And I should also point out, he has not prevailed. I mean, people who think that he's thwarting Democratic institutions, there's an independent counsel. Congress has moved forward. The media has moved forward, and he doesn't like it.

CUOMO: Our ratings are higher than ever. "The New York Times" keeps putting out its publication numbers.

But look, we get what his intentionality is. His effect is going to be another consideration. Michael Smerconish, let's flip it. Which is the president can do all of this.

He can go to the attorney general and say, "Stop this investigation." He can go to the FBI and said, "I've had enough of this. Don't do this probe anymore." He can go to lawmakers and he can say, "I think that you should end this as soon as possible. I think this is all nonsense."

He can do all of these things within a reasonable extension of his powers. Where's the line?

SMERCONISH: So, you're so right to say this is a glass half empty, glass half full analysis. Because one way of looking at it, as David Gregory was just articulating, is to say "Don't look at this in a vacuum."

Look at this in the context of him having fired Comey. And that's what Mueller is looking at in a determination of whether there was obstruction of justice. So now, you add in the complaints or reports, I guess I should say, of these senators, and it looks rather nefarious.

From the president's perspective, however, he says there's no evidence of collusion. There's never been any evidence of collusion. And you're absolutely right. I did tell these senators to wrap it up in the same way via my Twitter account I've always told the American public that this is completely bogus.

It's a drag on my administration, and I have nothing to hide here. I want it wrapped up.

HILL: In terms of being direct, if we're shifting gears for a minute, we're talking more and more about Rex Tillerson and the reporting that we have that plans may be under way. Already, names are being floated out there. We know the public shaming. This is not a new tactic for the president. See Jeff Sessions.

And yet, what's remarkable is for a man who really is known to so many Americans for that key phrase, "You're fired," before he became president, before he was a candidate. The president is not direct when it comes to these moves, David Gregory. It is floating things out. It's -- I want to put it out there, but I don't want to be the one to actually pull the plug.

GREGORY: Well, but there's also the ways of Washington here, that they're not so unfamiliar, you know. It's -- it's a way to publicly undermine someone. This has been done in a pretty crass and delicate way. Sometimes these moves are more delicate.

But this -- this, you know, marriage between Tillerson and Trump seemed to just be so failed from the start. And Trump has a lot to do with that. I think Tillerson has his own responsibility to bear.

But it is -- it's certainly ugly to watch. And more important than palace intrigue in Washington is -- is what it actually means for a coherent foreign policy moving forward. I do think that people who are watching and keeping track of government, what they have to understand is that it's not just the soap opera aspects of it. It's it is the government, or in this case a national security team, actually work within itself.

It's critically important. You've seen during the Iraq war when that process breaks down. This is not bureaucracy. This is a very important process? And does it break down because of failure to communicate, failure to agree, failure to work through problems in a constructive way that lead to better policy outcomes. That's what's in danger here.

HILL: Well, and does it also break down when every single day we're hearing that there is not competence in the man who's supposed to be leading. Whether it's from internal reporting that we have in terms of how career staffers, especially career diplomats are feeling but also when the president is floating this out there. That's a directive.

CUOMO: That's the crass part that David is talking about. What Tillerson has been doing at Foggy Bottom has a lot of legitimate critics, as well, in terms of trying to strip down the State Department, what does that do to our extension of diplomatic reach. Strong point. Let's not waste that on Michael Smerconish

Michael, you know, the audience loves you. We've got a thinking audience on this show. Thank God for that. Let me ask you something. We take obstruction of justice investigation as a given, that that's what's going on. They're looking at the president, what he did with Comey.

Do you believe that the president of the United States could be guilty of obstruction of justice when he does have the authority to remove anybody he wants in his government?

SMERCONISH: I don't think it's enough for having -- if you're asking me, based on these facts, the firing of Comey and the reports from "The Times" today that we've been going over with the senators. Is that, in and of itself, a coverable case for obstruction of justice? I don't think that it is. That's my direct answer. I think you'd need more than that.

CUOMO: That's why I like having the Smerc on. It's not just that perfectly shaped head. It's what comes out of it that makes him such a benefit.

Michael Smerconish, I love your show. You've been doing great. Thank you. And Gregory, you are the gift that keeps giving.

GREGORY: Thanks, guys.

HILL: I want to fill you in on some breaking news coming to us out of Pakistan. Gunmen disguised as women storming a school. The number of the dead and the injured is on the rise. We've got those late- breaking details for you, up next.

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