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Ex-Trump Security Chief Rejected Russian Offer to Send 5 Women to Trump's Room; Mueller Interviews Trump Aide Stephen Miller about Comey Firing; Three Woman Accuse Candidate Roy Moore of Sexual Contact When They Were Teens; House Panel Passes GOP Tax Plan. Aired 5-6p ET

Aired November 09, 2017 - 17:00   ET


WOLF BLITZER: Happening now, breaking news, Russian offer. President Trump's former body guard testifies that back in 2013, he rejected a Russian offer to send five women to Donald Trump's hotel room in Moscow. The aide says he took it as a joke and that President Trump laughed it off, as well.

[17:00:25] Moore trouble. Shocking allegations against Roy Moore, the Republican nominee for the Alabama Senate seat. "The Washington Post" reports he initiated sexual contact with a 14-year-old girl when he was 32. And three other women gave similar accounts. Moore denies the allegations, but Republican lawmakers say if they're true, he must step aside.

Planned disagreement. A controversial House Republican tax plan makes it through committee as Senate Republicans unveil a tax plan of their own. Will the two chambers be able to resolve their differences and send a bill to the president?

And alternate universe. After President Trump taunts Kim Jong-un's regime and criticizes life in North Korea, we're getting exclusive reaction from inside North Korea, where people tell CNN that life there is great.

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

ANNOUNCER: This is CNN breaking news.

BLITZER: We're following multiple breaking news stories. President Trump's former security chief has told Congress that he rejected a Russian offer to send five women to Donald Trump's Moscow hotel room. The incident occurred in 2013 when then private citizen Donald Trump was in Moscow for the Miss Universe pageant. Keith Schiller testified that he took the offer as a joke and that Trump himself laughed it off.

We're also just learning that White House senior policy advisor Stephen Miller has been interviewed as part of the special counsel's Russia probe, the highest-level aide still working at the White House to be questioned. Sources say Miller's role in the firing of the FBI director, James Comey, was among the topics discussed.

Also breaking, lawmakers are reacting with shock to an explosive report that Roy Moore, the Republican nominee for the Alabama Senate seat, allegedly engaged in sexual conduct with an underaged team. "The Washington Post" reports Moore initiated a sexual encounter with a 14-year-old girl when he was 32. Three other women told "The Washington Post" that Moore also pursued them.

Senate Majority Leader Mitch McConnell and other top Republicans say if the allegations are true, Moore must step aside. Moore calls the report, quoting now, "a desperate political attack."

And a powerful House committee passes the Republican tax plan and sends it to the floor on a party-line vote. As Senate Republicans release their own version of a tax bill with enough differences to set the two chambers up for a dramatic showdown in the coming weeks.

I'll speak with White House legislative director Marc Short; and our correspondent, specialists and guests, they are standing by with full coverage.

So let's begin with the stunning testimony from President Trump's former body guard and aide, Keith Schiller, who told Congress this week that back in 2013, he rejected a Russian offer to send five women to Donald Trump's Moscow hotel room.

Let's go straight to CNN senior congressional correspondent Manu Raju. Manu, what are you learning?

MANU RAJU, CNN SENIOR CONGRESSIONAL CORRESPONDENT: President Trump's longtime confidant Keith Schiller did testify privately to the House Intelligence Committee that he did reject a Russian offer to send five women to then-private citizen Trump's hotel room during the 2014 trip to Moscow for the Miss Universe pageant.

Now this is according to multiple sources from both parties who told this to my colleague, Jeremy Herb and me.

Now Schiller, who was Trump's former body guard and personal aide, testified that he took the offer as a joke. That's according to two of the sources. On the way up to Trump's hotel room that night, Schiller told the billionaire businessman about the offer, and Trump apparently laughed it off.

Now earlier -- this is according to his testimony from earlier this week. Now after several minutes outside of Trump's door, which was Schiller's practice as Trump's security chief, he said that he left, and he did not know, Wolf, what happened after that.

BLITZER: Why did the members, Manu, even bring this up?

RAJU: Well, the members raised this because of the salacious allegation laid out in the dossier that was compiled by former British agent Christopher Steele.

Now some of those allegations in the dossier have been verified, but those salacious accusations about Trump's activities in Moscow have not been verified. And lawmakers wanted to know if, in fact, the Russians had dirt about Trump just at the same time as they were meddling in the U.S. elections.

Now, Schiller said he had no knowledge of that, Wolf, but during the closed-door hearing, House lawmakers walked through a "Daily Caller" article, which raised some of the allegations about Trump's Moscow trip from the dossier and discussed an alternative story involving Schiller's role in rejecting the Russian offer of sending prostitutes to Trump's room.

[17:05:11] Now Wolf, we are told that Schiller denied one allegation in the story: that the offer came from women, from Emin Agalarov, who is the son of a Russian billionaire who was close to Putin and who worked with Trump to bring the Miss Universe pageant to Moscow.

But Schiller -- Schiller did testify, Wolf, that someone in the group with Agalarov did raise the matter during a meeting that happened around lunchtime. Now Agalarov's attorney told he earlier he has no knowledge, his client has no knowledge of the matter. And the White House itself, Wolf, declined to comment, while Schiller's attorney criticized the leaks that were coming out of the committee.

BLITZER: What else did Schiller say?

RAJU: Well, Schiller actually did not give the committee a whole lot. In fact, lawmakers questioned him for hours, Wolf, about Trump-Russia connections, about advisors, meetings with Russians and he claimed, and he didn't know much since he was in charge of security for candidate Trump and not policy.

Plus, he was asked about what he knew about the firing of FBI director James Comey, given it was him, Keith Schiller, who did deliver that letter to the FBI, deliver the news about the firing, but Wolf, he said he was not involved in the deliberations and didn't give the committee much to go on.

BLITZER: All right, Manu. I want you to stand by, because there's more breaking news we're getting right now. Word of another Trump associate being interviewed by the special counsel's White House. This time, a member of the White House inner circle.

Let's bring in our justice correspondent, Pamela Brown, and our chief political analyst Gloria Borger.

Pamela, who's the latest person now to appear before the special counsel, Robert Mueller?

PAMELA BROWN, CNN JUSTICE CORRESPONDENT: Well Wolf, we've learned that White House senior policy advisor Stephen Miller has now been interviewed as part of the special counsel, Robert Mueller's, Russia probe. So this brings the probe into the inner circle of the White House, Trump's inner circle in the White House, because Miller is the highest level aide that we know of, that is public, that has been interviewed by Robert Mueller. We have now learned.

And he's been by Trump's side from the campaign up until now, and in key moments that we know that Robert Mueller has been investigated, has been investigating, including a March 2016 meeting with George Papadopoulos, the campaign volunteer, who according to court filings offered up in that meeting to set up a meeting between Vladimir Putin and Donald Trump.

And Stephen Miller was also there during a weekend in Bedminister [SIC] when the initial memo was written to fire James Comey. So he's a key person to speak to as a witness in this investigation.

BLITZER: Gloria, you've been doing reporting on this, as well. So why would federal investigators want to talk to Stephen Miller?

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: About the firing of James Comey. There is this weekend at Bedminster that Pamela is talking about that was very important. That the president went there, and he decided at that weekend to fire James Comey.

And we're told, of course, that he wrote some notes down, and it was Steve Miller who worked with the president or drafted this memo about why Comey should be fired. That -- that memo has been handed over to the special counsel.

So Miller is a person, I think, makes a lot of sense. You'd want to talk to him about what was the president thinking? What was -- what were you thinking about this? How did the president decide? What were your conversations with the president, particularly as they look into possible obstruction of justice in terms of the firing of the former FBI director. So in a way, he's, you know -- he's somebody who had a front row seat to the president's mind in this case.

BLITZER: He certainly did. You know, it seems, Manu, that this investigation, Robert Mueller, the special counsel's investigation is heating up. Indictments last week, a guilty plea last week, and all of these most recent developments.

RAJU: Yes, no question. I think what Pamela and Gloria's reporting really shows is that Mueller's investigation is only just beginning. Or at least it's not anywhere near conclusion, despite these charges that came out last week.

There are a number of key witnesses that he is still yet to interview. A lot of them that he wants to go forward -- to explore, particularly in terms of obstruction, this issue, potential Russia meetings that occurred during the campaign season. I think there's going to be a lot more of these senior-level White House aides in particular and former aides who also meet with Mueller.

BROWN: But by the same token, I think that Mueller is mindful of the impact this investigation has at the White House. I mean, we've heard from sources that it has had an impact on business dealings with foreign leaders. And so I do think that while it won't necessarily dictate where this investigation goes, I do think Mueller is mindful. And they want to be, you know, as efficient and expeditious as possible in getting these interviews done and at least wrapping up the part of the probe that directly impacts the president.

BORGER: And you know, this is very difficult for people who really inside the White House, we should say. That you have people who know they're going to be interviewed. They've had to hire lawyers. They're spending money to do this. They're siloing themselves off from any discussion of the Russia investigation.

[17:10:13] The president is, of course, very concerned about the Russia investigation. He's called it a hoax.

So I think with whatever legislative agenda they have, today was the day that, you know, tax reform is going to be unveiled in the Senate. And you have all of these other issues that complicate their lives, and complicate their personal lives, as well.

BLITZER: I want all of you to stand by. We're going to have much more on this shortly.

But there's other breaking news that we're monitoring. Truly explosive report from the Washington Post that Roy Moore, the Republican nominee for the U.S. Senate seat in Alabama, allegedly engaged in sexual conduct with young teenagers when he was in his 30s. Republican lawmakers say if the allegations are true, Moore must step aside. Moore calls the report -- I'm quoting now -- "a desperate political attack."

Let's go to Jason Carroll. He's got details. What are you learning, Jason?

JASON CARROLL, CNN CORRESPONDENT: Well, Wolf, if the allegations are true, very disturbing. Four women spoke to "The Washington Post," alleging when they were teenaged girls, Roy Moore, who was then a 32- year-old assistant district attorney at the time had sexual contact with them.

One of the accusers, Leigh Corfman, says in 1979 when she met Moore when she was 14 years old, she told the "Post" she met Moore in court when she was with her mother during a child custody hearing. She said later -- she says she had two encounters with Moore. One where he kissed and hugged her, a second when he partially undressed her and allegedly guided her hands to his genitals. The age of consent in Alabama, then and now, was 16.

"The Post" also spoke to three other women who say when they were teenagers back in the late '70s and early '80s, they too allegedly had sexual encounters with Moore.

Moore's campaign, Wolf, calling the allegations, quote, "garbage." Part of what they call the Democrats' attempt to discredit him. Moore in -- Moore himself saying in a statement, calling the allegations, quote, "completely false and a desperate political attack."

BLITZER: Jason, I know you had a chance to peek with the accuser's stepfather. What did he tell you?

CARROLL: Right. Richard Wells, spoke to him by phone this afternoon. He says the family stands by what was reported in "The Washington Post." He also says that Lee is a very strong woman and that women are often stronger than men, and this is an example of that. And then, Wolf, when I asked him if his family was concerned at all about any possible fallout from all of these allegations, he said, quote, "We are not worried about any fallout."

BLITZER: CNN's Jason Carroll working that explosive story for us, as well. Much more on that coming up.

Also breaking, the House Republican tax plan has now made it through a powerful committee, as Senate Republicans unveil their own version of a tax bill.

Our congressional correspondent, Phil Mattingly, is joining us.

Phil, a couple of milestones, but a lot farther to go. Walk us through what has now happened.

PHIL MATTINGLY, CNN CONGRESSIONAL CORRESPONDENT: Yes, no question about it, Wolf. Look, for years the idea of getting a large-scale tax overhaul through any committee, let alone onto the House or Senate floor, seemed to be anathema. Nobody could figure out a way to get it done. Today, they did. But as you noted, it's only one step. There's no shortage of potential hurdles sitting right in front of lawmakers the rest of the way.


MATTINGLY (voice-over): Tonight, for the Republican tax plan, one major step forward in the House.

UNIDENTIFIED MALE: The bill has passed; the committee is adjourned.

MATTINGLY: As the GOP proposal unveiled in the U.S. Senate underscores just how many differences still remain.

SEN. MITCH MCCONNELL (R-KY), MAJORITY LEADER: In 30 years, America's ready for tax reform again.

MATTINGLY: The House Ways and Means Committee voting to approve their version of the tax overhaul, putting the bill on track for a House floor vote next week.

REP. PAUL RYAN (R-WI), SPEAKER OF THE HOUSE: We ran in 2016 on doing this tax reform. The president ran on doing this tax cut and tax reform. So this is about fulfilling our promises to the American people.

MATTINGLY: But even after late changes to the bill, to bring it in line with budgetary targets, still major differences from its newly- released Senate counterpart. The House collapses individual brackets from seven to four with a top rate of 39.6 percent. The Senate, seven brackets, the top rate, 38.6 percent.

The House bill makes immediate a corporate rate cut to 20 percent from 35 percent. The Senate bill phases that cut in over a year.

The House bill allows the state and local property tax deduction up to $10,000. The Senate bill repeals that entirely.

The House bill caps the mortgage interest deduction for new mortgages at $500,000. The Senate bill leaves that untouched.

With each difference, Republican members and no shortage of lobbying interests fighting to keep their own preferred route alive, potentially imperiling the bill each step of the way.

GOP leaders in both chambers brushing off the differences.

RYAN: And yes, the Senate bill's going to be different than the House bill, because you know what? That's the legislative process. But what's encouraging in all of this is we have a framework that we established with the White House and the Senate, and these bills are being written with inside that framework.

[17:15:15] MATTINGLY: Democrats are unified in their opposition to the bill and the entire process.

REP. NANCY PELOSI (D-CA), MINORITY LEADER: Why don't we do it where there's at least opportunity for people to review it? Let's do it very fast. Very fast. Speed of light, in the dark of night, in back rooms without even their own members. And what an insult to the intelligence of their own members, what an insult to the intelligence of the American people as they make an assault on the middle class.

MATTINGLY: As even top GOP targets for potential bipartisanship panned the GOP path so far.

SEN. JOE MANCHIN (D), WEST VIRGINIA: We're not involved at all. On the Senate side, me being a conservative Democrat, fiscal conservative Democrat, not even been asked to sit down by any of my Republican colleagues and senators. I just don't think that's the right way to do it.

MATTINGLY: But for now, GOP aides tell CNN they remain on track to complete the bill by President Trump's request, Christmas. Even as one aide acknowledged to CNN, quote, "There's no shortage of land mines in front of us to blow up at any time."


MATTINGLY: And Wolf, just to lay out kind of how this is supposed to go moving forward, the House floor, the House Republicans are supposed to take that up next week. The Senate committee process will start next week. The Senate should vote on something the week after Thanksgiving, and then they'll try and reconcile.

And it's worth noting: each step of the way there are potential problems, but I can tell you behind the scenes right now, House GOP aides making clear, they're working one to one with members, trying to give them detailed data about the economic prospects of this bill in their districts, for their constituents. Really trying to make the case that, "Hey, we get it. You might have a problem with an individual provision or even a couple. But overall, this bill is a winner."

Their ability, Wolf, to be able to convey that message and to convince their members with this -- with that message will determine whether or not it passes the House next week, but also the Senate in a couple weeks and, if GOP leaders have their way, by Christmas, Congress all itself, Wolf.

BLITZER: Yes, a lot's at stake for the politicians. And enormous amount at stake for the American people right now with these potential tax cuts. Phil Mattingly, thanks very much.

We're going to be speaking right now with the director of legislative affairs, Marc Short. Marc, in fact, I want to get your reaction to this big tax cut, the House version, the Senate version, all the day's breaking news. Let's take a quick break. We'll have our conversation right after this.



[17:22:02] BLITZER: We're following multiple breaking news stories right now. The House Republican tax plan has made it out of committee even as Senate Republicans unveil their own tax plan with some major differences.

And there's also an explosive report in "The Washington Post" alleging that the Republican candidate for the U.S. Senate seat in Alabama, Roy Moore, engaged in sexual conduct with a 14-year-old girl and other teens when he was in his thirties. Republican lawmakers say if the allegations are true, Moore must step down, step aside.

We're back with Marc Short. He's the White House director of legislative affairs, meaning you've got to work with the Senate and the House. What do you -- what does the president believe? If these allegations against Roy Moore, for example, are true, accurate, must he step aside?

SHORT: Well, Wolf, let's step back for a second and recognize that they are very serious allegations. And if true, then yes, there's no path forward. But let's be cautious here of allegations that arise 38 years later, a month -- that actually arise a month before election day. So, I think we need to let the facts come out, find out what the truth is, and go from there before we jump to conclusions.

BLITZER: Because there's been like 30 people "The Washington Post" interviewed, including these women who are now adults, who were girls at the time. You've read the article.

SHORT: I saw the story, and I've also seen that Roy Moore has denied the allegations, so let's see where this goes. I think certainly, if it's true, it's something that's extremely serious, and there's no path forward. But we need to wait and see if that's true.

BLITZER: If he does have to step aside, what is the procedure for getting a Republican candidate to challenge the Democrat, because what, the election is only a month away?

SHORT: The election's a month away. And I think, remember that the president supported Luther Strange in that primary. I think what'll happen is that -- is that there's options for write-in candidates, and there's also options for lawsuits, I think, will arise about a path forward. But I don't think we should begin going down that pathway until we give Roy Moore the chance to defend himself and to defend his character.

BLITZER: If he does step aside, you'd want Luther Strange to emerge somehow as a write-in candidate?

SHORT: I'm not going down that hypothetical right now. Roy Moore is the nominee. We owe it to him to allow him the chance to defend himself and see where this goes.

BLITZER: But if you do confirm it's true...


BLITZER: ... because these 30 sources of "The Washington Post" have all come forward over a long period of time to make these allegations, if you confirm it's true, you would want him to step aside.

SHORT: That's a big "if" clause, Wolf, it certainly is, but yes.

BLITZER: How do you confirm it, though? How do you determine who's lying and who's telling the truth?

SHORT: I think that the voters of Alabama deserve to know the truth, and I think the voters of Alabama will demand more information, more facts to figure this out.

BLITZER: And so you believe that the truth eventually will emerge...


BLITZER: And if the truth is against him, he should step aside?

SHORT: If that happens, Wolf, but I don't think we should be jumping to conclusions at this point. We should allow that process to play out.

BLITZER: All right. Let's move to another critically important issue, taxes right now. Two versions have emerged: the House version, the Senate version, very different. How do you reconcile these two versions? You're smiling, because you don't think they're very different?

SHORT: I don't think they are very different, Wolf. I think that we start with the framework, with the White House, the House and Senate working together. There's certainly some pieces where I disagree.

But look, we all know from "Schoolhouse Rock," the House passes a bill, the Senate. Then there's a conference report. That's the process that's going to play out. We look forward to the House taking this up on the floor next week. That's the next step in the process.

[17:25:12] BLITZER: So let's see where the White House stands on some of these issues where there are differences. The Senate wants to delay the cut in corporate tax, the cut in the corporate tax rate from about 35 percent to 20 percent, they want to wait until 2019. The House version says it should happen right away. Where does the White House come down?

SHORT: There are a lot of trade-offs that members have to make in these decisions, Wolf. We are anxious to see tax relief as soon as possible. We think that that's what's needed to make sure the economy gets growing faster than it already is. We know it's beginning to turn around. It's turning the corner because of the regulatory relief that we've provided.

But now it's important to get tax relief into middle-income families and into corporations that are no longer inverting and going overseas. So we want to see it as soon as possible.

BLITZER: So let me press you on some of the other differences between the Senate version that was just released today, the House version that passed committee. House version, four income brackets; Senate version, seven income brackets. What do you want?

SHORT: Naturally, I think we've said all along that one of our objectives here is to simplify the tax code. So a preference again is to have as few as possible, but there's going to be tradeoffs the senators have to make. And there are other things that we are providing in this bill that we find very attractive.

So we're excited about the process. We're excited that where the Senate is going with theirs and the markup they have planned for next week and the progress the House is making. We think these difference will be reconciled.

BLITZER: And it's another sensitive, very sensitive issue, especially for moderate Republicans in some of the big states like New York and New Jersey, Connecticut, California. The House version, a partial repeal of the state and local tax deductions; Senate version, full repeal of the state and local tax deductions. Where does the White House stand?

SHORT: I think what we said from the start is that we were trying to clean up the tax code and believe that there's a lot of states that are well-managed that do not have high local and state taxes, and they should not be subsidizing taxpayers in states that are perhaps less well-managed that have higher state and local taxes.

But we also recognize the challenge that that poses to many members in those states of New York, California and New Jersey. And so, we're comfortable at the compromise the House made. We're also comfortable with the Senate plan that I think is where we started our process.

BLITZER: Because it sounds like you're much more comfortable with the House plan than the new version that the Senate wrote.

SHORT: No, I don't think that's true. I think that there's trade- offs again that the Senate made that we're very pleased with.

BLITZER: You want a full repeal of the estate tax, which is in the House version or a partial repeal of the estate tax?

SHORT: The president said from the start that he believes that people who are taxed their whole life shouldn't then also have a death as a taxable event. I think that that's a fair principle.

BLITZER: On all four of these major differences, you come down on the House side, but we'll see what happens when they negotiate the Senate. Clearly, you know, bottom line as far as middle income, middle class folks, you can't guarantee that everyone in every income bracket will see a tax reduction.

SHORT: Wolf, what the Joint Committee on Taxation said, a nonpartisan organization, is they affirm that for every middle income family, let's say middle income in America, they define as a 59,000 dollar income. Every bracket would get a tax relief, and that those in the middle income would receive tax relief for about $1,182 on average. So we believe that this tax plan is providing tax relief for every income bracket in America.

BLITZER: But when you say income bracket on average, that doesn't mean everyone in those brackets, especially from some of the bigger states that have state and local tax deductions right now, if they lose that, will wind up saving money.

SHORT: Wolf, as far as a tax reform plan that we have $1.5 trillion to work within, we are not simply handing out dollars.

The problem in America is not that people are taxed too much. The problem is that we spend too much dollars. That's why we have a deficit, and that's why we have debt. Our effort is to lower the tax rate for as many people as possible with our focus being on middle- income families.

BLITZER: But you don't believe people are overtaxed right now?

SHORT: I don't think the problem in America is that people are taxed too much. I do believe that people are overtaxed. That's why we're pushing for tax relief.

BLITZER: I'm still a little confused. But let's talk a little bit about what happens in 2027 when many of these tax cuts that you're supporting right now are sunseted. They go away, and people will wind up having to pay a whole lot more. You comfortable with the sunset provision, where you're only having these tax cuts for a limited period of time?

SHORT: I think our preference is that they not be sunset, but they're trying to work within certain budget restrictions of the $1.5 trillion we have to work with, which is why they made decisions to sunset some.

BLITZER: President Trump repeatedly says that this is the biggest tax cut in American history, but it isn't. You know that.

SHORT: I think that this will be the biggest corporate tax relief that America's had...

BLITZER: Corporate -- but he doesn't say "corporate." He just says it's the biggest tax cut.

SHORT: But Wolf, I think that there's a lot of different variations as to what those numbers will show. And I think that we'll show it will generate enormous growth for America, and we do believe it is one of the largest tax cuts in American history.

BLITZER: But take a look -- take a look at the chart, and we're going to put it up on the screen. Because the analysts have taken a look at the biggest tax cuts. The Reagan tax cut, 2.89 percent; Truman, 2.67 percent; Truman again; Obama, 1.78. Donald Trump's tax cut plan right now, 0.9 percent of the GDP.

SHORT: We are happy -- we are happy -- the argument as to whether we have the top, or the second, or the third largest tax cut in American history, that is a positive angle for us Wolf, but your data just showed there as a percentage of GDP --

BLITZER: As a percentage of GDP, it would be the seventh largest.

SHORT: If you're looking at -- if you're looking at absolute dollars, it would be the largest. So it depends on the way you're using you --

BLITZER: But if it's a percentage of GDP, it would be the seventh largest. I just want the President like all of us to be very, very precise when he makes a bold statement like that.

SHORT: We're being precise with absolute dollars.

BLITZER: The President also says he'll be a big loser, check with his accountant, if all of these tax cut goes through. That's not necessarily true though.

SHORT: Well, it is true because --

BLITZER: Look at the estate tax.

SHORT: What he's saying is that in many cases, if we get rid of the deductions, which is the way that we're paying for is main special interest deduction which the wealthy benefit from, then those individuals will not be getting the same sort of tax relief that middle-income families will be getting.

BLITZER: But if the estate tax is completely eliminated, and let's say he is worth $10 billion, which he says Forbes Magazine says he's worth $4 billion which is less, but even if you're with $4 billion and you don't have to pay the estate tax, 30 percent, 40 percent that exists right now, this family is going to save billions of dollars.

SHORT: The reality is that most families in that income bracket have attorneys and accountants who have protected them from the estate tax. The ones who are hurt the most, are honestly those in Midwest farmers and those trying to pass on business. We have stories to tell of people that are getting damaged by this state tax and their (INAUDIBLE) and get bank loans for generations--

BLITZER: Only that those farms are worth more than $11 million. SHORT: It's different -- it's than what you're alleging regarding the President. So the President will be damaged because they're not the same level of tax cuts for those the highest income brackets, but that's what he said he wanted. He said this is what's best for our country, is to make sure that we provide middle-income tax relief and corporate tax relief to make sure jobs come back into America.

BLITZER: You've got a lot of work ahead of you. We'll see what happens. Marc Short, always good of you to come here into THE SITUATION ROOM. Thanks very much for joining us.

SHORT: Thanks for having me.

BLITZER: Coming up, there's more breaking news. Stunning testimony from President Trump's former bodyguard and word of another Trump associate being interviewed by the Special Counsel's office, this time a key member of the White House inner circle.


[17:35:00] BLITZER: Breaking news, President Trump's former bodyguard has testified before lawmakers that he rejected a Russian offer to send five women to Mr. Trump's hotel room when he was in Moscow back in 2013 for the Miss Universe Pageant. That testimony touches on some of the most salacious and unconfirmed allegations in the dossier compiled by a former British intelligence agent on behalf of Mr. Trump's political opponents paid for, that dossier by Democrats, the Hillary Clinton campaign and the DNC. Let's bring in our experts to discuss this and more, Manu, walk us through the Keith Schiller testimony about this Russian offer back in 2013.

MANU RAJU, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Well the reason why this was brought up, Wolf, as you eluded to there, this dossier included a host of salacious allegations which are not confirmed. Now there are verified allegations in the dossier that do not relate to Mr. Trump's activity in Moscow during that 2013 trend where they were dealing with the Moscow and Miss Universe Pageant. Now, they were asked, Keith Schiller specifically about a Daily Caller article that touched on the dossier and talked about how Schiller himself rejected the notion of having any women sent to Trump'sroom.

Now, what he did confirm is that a Russian, an unidentified Russian, didn't know the person's name, didn't make that offer to send five women to Trump's room. He did not tell Trump until later in the day as they were walking back to their hotel room. Schiller testified that he told Trump about this, Schiller thought it was a joke, Trump laughed it off, he waited outside Trump's hotel room, he left for the night, did not know what happened after that. But one piece of the puzzle here about exactly what happened in Russia, Schiller denied knowing anything that happened or do not confirm those allegations.

BLITZER: I just want to be precise Chris, we haven't confirmed these very salacious details that are included in that dossier.

CHRIS CILLIZZA, CNN POLITICS EDITOR AT LARGE: No, and look, I think through Manu's great reporting, look, I think what this tells us about Donald Trump is not all that much. I actually do think though it tells us a little something about Russia. Schiller thought it was a joke, testified that, Trump thought it was a joke, they laughed about it. Because they thought it was a joke, I would offer up, it does not necessarily mean it was. Maybe it was a joke if they rejected it, but the point is it would suggest that Russia was, and we know Russia has done this, this is a tried and true tactic to try to gather information to compromise people they may or may not be targeting. Well, the fact that this -- according to Schiller happened, would suggest that Trump or associates of Trump were in their sights. Now, just quickly, that doesn't mean anything as it relates to Trump, but I think it tells us something about Russia and their intent.

BLITZER: Yes, back in 2013, Gloria, you're also doing some reporting on a top White House official still working at the White House in the inner circle who has now been asked to appear before the Special Counsel Robert Mueller.

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Right, Pamela Brown, Evan Perez and I have learned that Steven Miller, who's a senior White House Policy Advisor has now been interviewed by the Special Counsel team. And this interview really brings that Special Counsel investigation into the current inner circle of the White House. And what they really want to know about is Miller's role in the firing of Jim Comey because and he was in New Jersey at Bedminster that weekend with the President and drafted a memo at the President's request, and with the help of the President about why Comey ought to be fired and the Special Counsel is very interested in getting an idea of what the President was thinking at the time, what they were talking about, and of course, the Special Counsel has a copy of that memo.

[17:40:30] BLITZER: Dana, the other breaking news, and there's a lot of breaking news today involves what's going on in Alabama right now with the Republican Senate Nominee.

DANA BASH, CNN CHIEF POLITICAL CORRESPONDENT: That's right, allegations that he was sexually with, as a 32-year-old, a teenager --

BLITZER: A 14-year-old girl.

BASH: A 14-year-old girl and other allegations as well. Look, the cascade of statements that we've seen from the Senate Majority Leader on down about if true, he needs to step out, you just interviewed the White House Legislative Affairs Director Marc Short who said the same thing. They -- the people in Moore's camp are being incredibly, incredibly -- they're digging, saying, he's not going anywhere, and there's no reason to doubt that. Just have to keep in mind that this isn't kind of your typical politics, even in the world of Donald Trump. He defied the establishment from the President on down by challenging the sitting Senator who has appointed Luther Strange and he is the ultimate outsider. And it's going to be hard to see anything making him say you know what, I'm going to withdraw.

BLITZER: You know, Manu, there are plenty of sources in that Washington Post story, but more calls that "the very definition of fake news." What do you think? Because the Republican leadership in the Senate, they say if this is true, he must step aside. RAJU: And you know, he's someone who did not listen to the Republican leadership in the Senate. In fact, he ran against pretty aggressively against Mitch McConnell, said he should get out, should not be a majority leader anymore. So he may not care what they think --

BASH: Definitely doesn't care.

BLITZER: It's interesting that Marc Short, the White House Legislative Director was just here, he said if true, the White House believes he should step aside as well.

RAJU: And look, the real concern for the Republicans is they could lose this seat. I mean, we have not seen consistent polling in this state for this race. We don't know where it stands but some poll suggested that it's close. If this really snowballs and becomes a huge story, which it is -- this could become devastating.

BASH: And there -- and there are --exactly -- and there are other questions right now about Lisa Murkowski who only is in the Senate again because she launched a write-in campaign in Alaska, you can do that, in Alabama, Luther Strange could do that. He doesn't have anywhere near the name I.D.

BLITZER: He's the Republican who lost.

BASH: Yes, but he still a Senator. And then also there's a question about whether or not if he even won he could be seated in the United States Senate so he could also have whole Pandora's box --

BLITZER: A lot legal -- a lot of legal issues, that election set for a month or so from now. We'll watch this very, very closely. Breaking news, a note, important note to our viewers, by the way, stay with CNN for more on this important conversation later tonight, 9:00 p.m. Eastern, tune into a special CNN "TOWN HALL" tipping point, Sexual Harassment in America.

Coming up, the neighbor of Republican Senator Rand Paul is pleading not guilty to assault after allegedly tackling of the Senator while he mowed his lawn sending him to the hospital. We've got new information, we'll bring you the latest right after this.


[17:45:00] BLITZER: The next door neighbor of Senator Rand Paul is pleading not guilty to assaulting the Kentucky Republican breaking six of Senator Paul's ribs as he allegedly tackled him, but six days after the incident, it still isn't clear what sparked the apparent dispute between the two men. Let's go to our Senior Investigative Correspondent Drew Griffin, he's digging for answers. What are you learning, Drew?


DREW GRIFFIN, CNN SENIOR INVESTIGATIVE CORRESPONDENT: Rene Boucher silently entered court this morning pleaded not guilty and within minutes had slipped out a back door with his attorney, avoiding more than a dozen members of the media still trying to get one question answered, why did you do it? Boucher is accused of blindsiding U.S. Senator Rand Paul last Friday tackling him while the Senator was cutting his own lawn landing Boucher in court and the Senator recovering from six broken ribs and fluid around his lungs. For 17 years, these two men have been neighbors, sharing this property line in a gated community just outside Bowling Green, Kentucky. An investigation is continuing and Boucher's fourth-degree misdemeanor assault charges could according to Warren County Attorney Amy Milliken become much more serious due to Senator Paul's injuries.

Amy Milliken, Warren County Attorney: The nonfinancial bond conditions include 1,000 foot stay away, 200 feet stay away if he is at his home.

GRIFFIN: Boucher is a retired anesthesiologist and Democrat who has posted anti-Trump messages on his now shut down Facebook account. Rand Paul is an ophthalmologist and staunch conservative Republican. That is enough to fuel right-wing speculation Senator Paul was attacked for political reasons. The Senator even piling on by retweeting two articles that raised politics as a motive. Rene Boucher's attorney again said that is all bunk.

MATT BAKER, ATTORNEY FOR RENE BOUCHER: This has absolutely nothing to do with any politics, any Liberal versus Conservative or Republican versus Democrat. It's just not about that. It's a personal dispute between two neighbors.

[17:50:04] GRIFFIN: Attorney Matthew Baker says the motive was in line with what CNN has already reported, that the two men who share this long lawn have a long-standing dispute over landscaping. But Senator Paul's Adviser, while not providing more details, said not true. As to reports of a long-standing dispute with the attacker, the statement read, the Pauls have had no conversations with him in many years. The first conversation with the attacker came after Senator Paul's ribs were broken. This was not a fight. It was a blindsided violent attack by a disturbed person.

BAKER: They have not spoken to each other in years but I still think that you can have a -- I'm certain that you can have a personal dispute without having spoken. It has to do with the maintenance of each other's property and the disagreement that two neighbors -- two adjoining neighbors have had over that.


GRIFFIN: Wolf, Capitol Hill Police came to Bowling Green Kentucky, interviewed Rene Boucher about the incident, mostly talking to him about politics. The FBI has also taken interest in this case. But for now, it remains a local criminal matter in Kentucky, no federal charges, and no political motive as of yet. Wolf?

BLITZER: As of yet. All right, we'll see what happens. Drew Griffin, thank you. President Trump, meanwhile, focused much of his speech before South Korea's parliament on that country's neighbor to the north taunting Kim Jong-un's regime and drawing a sharp contrast in living standards between the two nations. CNN's Will Ripley is getting exclusive reaction to the President's remarks from North Korean citizens. He's joining us live from the capital of Pyongyang. Will, what are you hearing?

WILL RIPLEY, CNN CORRESPONDENT: Well, Wolf, you have to keep in mind what you're about to hear from citizens, they were under the watchful eye of government miners just as we were when we were asking the questions. But President Trump's speech really hitting a nerve. Seething is how North Korean officials are responding, furious about President Trump's attack on their country and their leader. But ordinary citizens didn't even know that President Trump gave a speech until a day later when he was already in China and their state media didn't tell them what he said, but we did.


RIPLEY: In North Korea, where the news is under strict government control, state media gave only a brief mention of President Trump's speech at the South Korean National Assembly. No details of his scathing indictment of North Korean human rights and harsh words for their Supreme Leader Kim Jong-un.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: North Korea is not the paradise your grandfather envisioned. It is a hell that no person deserves.

RIPLEY: Despite heavy restrictions on the flow of information, our government guides allow us to tell Pyongyang citizens exactly what Trump said. That's absurd, says housewife Ri Yong Hui. The reality here is very different. We're living a happy life and we enjoy exclusive rights.

When you say you have rights that people don't have outside of North Korea, what do you mean by that?

One example is our outstanding leader, Marshal Kim Jong-un, she says. He's leading us to a better future. Trump has no place to talk about human rights. He's a simple war maniac.

Her answers echoes North Korea's leading newspaper which called President Trump's word "warmongering filthy rhetoric spewing out of his snout like garbage that reeks if gunpowder to ignite war." Ri Won-gil is an editor at a publishing company. I asked him about President Trump's claim that North Korea is a failed state where most live in poverty drawing a stark contrast to their neighbors in the south.

Why do you think that South Korea's economy is so much larger than North Korea's? Do you agree with President Trump that it's your government's policies that are to blame?

He knows nothing at all about this part of the country, he says. Here we have free education, housing, medical care. He was raised an orphan. His parents died serving the government. Now, he has (INAUDIBLE) job in the (INAUDIBLE) capital. The United Nations says most North Koreans live without regular electricity, clean water, and nutritious food. What about people who don't live here in Pyongyang, people who live

out in the countryside?

We're building our economy even under the sanctions and economic blockade by the Americans, he says. And even in western countries, there's a big difference between life and the capital and small towns. On 17 trips to North Korea, I've never heard anyone criticize the government. There is zero tolerance for dissent of any kind. Defectors testifying to the U.N. often paint a much darker picture of life inside North Korea. But here, no deviation from the party line. They say this country is not hell, it's home.


[17:55:10] RIPLEY: And still, nearly two days after President's speech, no official response yet from North Korea. Wolf?

BLITZER: All right, well, thank you Will Ripley reporting. Coming up, President Trump's former bodyguard tells lawmakers he rejected an offer to send five women to Trump's hotel room in Moscow back in 2013.