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Trump News Conference; Tillerson, Russian FM Meet For First Time; Ryan Talks Russia Investigation; Ryan: Leaks Should Be Investigated; Ryan Talks Tax Credits To Replace Obamacare; Hearing Underway For Trumps Israel Envoy Pick; Trump Backs Away From Two-State Solution; Trump: Leakers "Are Gonna Pay A Big Price". Aired 11:30- 12:00p ET

Aired February 16, 2017 - 11:30   ET



KATE BOLDUAN, CNN HOST: All right. Moments from now, President Trump will be holding a news conference, he will be announcing his new pick for Labor Secretary, this of course is after his first pick, Andrew Puzder withdrew his nomination in the face of growing opposition from democrats and republicans. We 'll bring you that news conference live as soon as it begins. But we 're following this.

The newly (inaudible) Secretary of State, Rex Tillerson is getting to work as diplomats gather in Germany for a G20 summit. This morning, the former oil executive he meet face-to-face with his Russian counterpart, Sergei Lavrov. It 's the first high-level meeting of U.S. and Russian officials since President Trump took office. Here is the message -- here is one of the messages coming from Secretary Tillerson.


REX TILLERSON, SECRETARY OF STATE OF THE UNITED STATES: United States will consider working with Russia when we can find areas of practical cooperation that will benefit the American people. Where we do not see eye to eye, United States will stand up for the interests and values of America and her allies.


BOLDUAN: CNN 's senior international correspondent Ivan Watson is joining me live from Moscow. Ivan, so you have this message from the new secretary. But at the very same time you have a Russian spy ship of the coast of Connecticut. I mean, what are the Russians saying about what 's going on right now?

IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: You know, there are -- it 's interesting to note, in addition to the diplomatic meeting, you 've got the top military commanders that -- a chairman of the joint chiefs of staff of the U.S. and his Russian counterpart, they 're also holding a meeting today in Azerbaijan. And they 're talking about trying to communicate better so that they can avoid incidents like perhaps last week where the U.S. says Russian war planes buzzed U.S. warship in the Black Sea, but U.S. has porter -- BOLDUAN: Ivan, sorry, I 'm going to have to jump in right now. We

got to take you live at Capitol Hill. House Speaker Paul Ryan taking questions at his weekly press conference. Let 's listen in.


PAUL RYAN, HOUSE SPEAKER OF THE UNITED STATES: From the administration or from wherever they are coming from. But if you know, let us know. What I do worry about, though, is if classified information is being leaked. That is criminal. And so I think there should be an investigation as to the leaks of information leaving wherever they 're coming from, and if it 's classified information, that is criminal and there should be a criminal investigation of these leaks. That does compromise our national security. Casey?

UNIDENTIFIED FEMALE: Following that, should the house intelligence committee include (inaudible) an investigation into these leaks?

RYAN: Yes, the house intelligence committee is the proper place for this. They 're the ones who get access to the sources and methods. And so I do think it 's appropriate -- and all of these, by the way, the -- everything involving Russia is what the house intelligence committee has been working on, looking at. And we 've had an ongoing investigation in all of this. And so, yes, that would be the proper purview for something like that.

UNIDENTIFIED FEMALE: And do you believe that Mike Flynn (inaudible) for the house intelligence?

RYAN: I 'll defer to the house intelligence. I hadn 't given any thoughts to that, I 'll defer to the house intelligence committee. Now, then, Robert. All right, yes.

UNIDENTIFIED MALE: Yesterday Federal Reserve chairwoman Janet Yellen testified on the hill that the border adjustment tax would create economic uncertainty and even in some cases weaken the dollar. What 's your response to that?

RYAN: Weaken the dollar? I don 't know if I would agree with that.

UNIDENTIFIED MALE: She 's (inaudible) that.

RYAN: Yes, I think most analysts would -- I think maybe you got the other way around.

UNIDENTIFIED MALE: So what 's your response to this?

RYAN: She might -- here 's how border adjustability works. A lot of people -- there 's a lot of confusion surrounding this. We are one of the few countries in the world that do not border adjust our taxes. 160 countries currently border adjust their taxes. We 're in the company of -- companies like North Korea and Somalia, Afghanistan and Iran or something like that. So almost all other countries border adjust their taxes.

And what that means is you tax based on, if it was consumed in your country, not if it 's made in your country. What America does, we tax people based on whether it 's produced in America. And so that means we do not tax our imports, and we tax our exports. And we 're putting American-made products at a huge disadvantage. There is a built-in bias in our tax code to outsource manufacturing and reimport into this country.

That 's not good for American jobs, that 's not good for American manufacturing, that 's not good for American economic growth. And so all we 're suggesting is, let 's equalize the tax treatment. Let 's be fair to ourselves and let 's treat ourselves like every other country is treating them. So when we make something -- just wait. When we make something in America, let 's put them on a level playing field with everybody else. So let 's just take this tape recorder right here, let 's just say this -- I hope I didn 't turn it off. American-made tape recorder. Let 's -- this is an Olympus. I have no idea where that 's made. Sony, made in Japan. Oops.


RYAN: I 'm sorry. I just want to explain this to you. All right. American-made tape recorder, Japanese-made tape recorder. There 's what Japan does when they make this tape recorder, when they send it for export, they take the tax off it. And then it comes to America, it 's not taxed, and it comes here to compete our good -- against our good, which is taxed. Theirs was untaxed twice.

When America makes something like a tape recorder, we tax it, and then we send it to Japan as it enters Japan, it 's taxed again to compete against their tape recorder. So we are doing it to ourselves. We are hurting American manufacturing and jobs. We are putting a bias against to making things in America in the tax code. That is why we think -- I hope I didn 't screw up your tape recorders -- that is why we think this is very important.

This is good manufacturing policy. With respect to currency adjustments, it 's -- it is obvious and mathematical that a currency adjustment would occur when we harmonize our tax laws with the rest of the world. For people who are concerned about it, I believe that there are things we can do and ways and means committee is looking into this to ameliorate those concerns, to address those concerns so that the transition from a really bad tax system to one of the best in the world we would get out of this is a gradual transition.

I would also say that those who are concerned about this, I think they underappreciate how much better our tax system will be with this kind of provision.

UNIDENTIFIED MALE: (inaudible) just a follow up is that (inaudible)

RYAN: You got me going on tax reform. I 'm sorry. I just can 't.

UNIDENTIFIED MALE: But you 're not concern about that the growing republican opposition to the border adjustment tax will jeopardize (inaudible)

RYAN: No, I don 't. Look, go back and read the books that written about the 1986 tax reform. That was the last time we did tax reform. It 's going to be up, it 's going to be down, it 's going to be on, it 's going to be off. You 're going to hear -- you 're going to make -- you 're going to report 150 stories on tax reform 's fate between now and when we get tax reform done. We are doing tax reform.

Tax reform is going to happen. And do you know why tax reform is going to happen? Because it has to happen. America has the worst tax code in the industrialized world. It is killing economic growth. It is driving companies to become foreign companies. More and more and more, U.S. companies are going to leave this country because of our tax laws, or get bought by foreign companies and we will lose our seed corn, our employers.

We will lose economic growth. This is existential to our economy and we know this. And so we 're going to get tax reform done. And there 's going to be a whole bunch of drama that you 're going to enjoy covering between now and then.


RYAN: Yes, Laura.

UNIDENTIFIED FEMALE: The affordable care act has refundable credit. How is the refundable tax (inaudible) different and why is that better --

RYAN: Affordable care act, they called them refundable tax credits. They 're subsidies. And they 're subsidies that say, we will pay some people some money if you do what the government makes you do. That is not a tax credit. That is not freedom. A tax credit is, you get the freedom to do what you want and buy what you need. And your choice. The affordable care act is the opposite of that.

The affordable care act is, the government makes you buy this, and by the way, like I just said there 's one or two plans left with (inaudible) there will be zero plan left in certain markets. They make you buy and then they subsidize what you buy. A tax credit is a fixed amount. The affordable care act is not a fixed amount. A tax fund is a fixed amount that get -- that is universal to Americans in the individual market to go buy the health insurance plan of their choosing.

It is the opposite of Obamacare which is not a patient-centered system, it 's a government run system. What we 're proposing is a patient-centered system where the patient is the -- designs their plan. The patient gets to decide what they want to do. The nucleus is the patient and her doctor versus the nucleus of the system being the government in Obamacare sake -- case.


RYAN: Wang (ph).

UNIDENTIFIED MALE: Yes, thank you, Speaker. I know that you 've heard from Secretary Price this morning. I was wondering if there are any areas where you think the White House can improve communications with Capitol Hill.

RYAN: I should know. We 're doing really well on that front. I don 't know what you guys report, but we talk with the White House daily. Our teams, our house and senate teams are in conference -- are in consultation with the White House constantly. We 're very excited Tom Price is over there. Tom Price was one of the primary architects of our Obamacare replacement plan that we rolled out last year.

And now he is the Secretary of HHS to execute and implement that plan. So we 're very pleased with that. And I think we have fantastic communication with them. Better than I 've ever seen before, actually.

UNIDENTIFIED MALE: The president shared his pick for Labor Secretary.

RYAN: No. I heard it 's coming but I have no idea who it is. Yes.

UNIDENTIFIED MALE: Obama (inaudible) this -- the Obamacare. I mean, obviously there are democrat or democrats (inaudible) republican shows (inaudible) replace. Do you think it 's going to be possible to have (inaudible) without helping democrats? Do you think (inaudible)

RYAN: We would love to have support from the other side. They 've made it really clear to us that they don 't want it -- they 're not interested in doing that. I think, Jennifer, what the democrats, just taking them at their word, they want to go down the socialized medicine path. They want to go down the government run health care path. They want what they call the public option, which is to basically have no options but a government run plan.

That is not something that we 're interested in doing. We think it will do even more damage to the health care system in America. And so we believe in a patient-centered system where individuals have the freedom to buy what they want and not what the government makes them buy. And also we think, Jennifer, it 's really, really important to have choice and competition in health care, because choice and competition lowers costs and increases quality.

That is the opposite of what Obamacare does. Obamacare restricts choice. It denies competition. We have monopolies in a third of the counties in America. And as a result of the lack of choice and the lack of competition, you have much higher prices and fewer supply. How about somebody in the back? Yes.

UNIDENTIFIED FEMALE: (inaudible) that there are a group of republican in the senate they have confused where Medicaid expansion was already (inaudible)

RYAN: Yes. You -- I think it 's 32 states, if I 'm not mistaken, have Medicaid expansion. Mine did not. We 're going to have to find a solution that accommodates each of these two concerns. And I 've asked Greg Walden then who 's our chairman of the Commerce Committee, he along with Orrin Hatch are working with governors to come up with a solution, so that a state -- whether a state chose to take the money or didn 't, that going forward, as we give states more control, as we advance the principle of federalism by giving states more control over Medicaid so they can have innovative reforms, that we do it in a way that doesn 't disadvantage either of the two sides of that coin.


RYAN: (inaudible)

UNIDENTIFIED FEMALE: (inaudible) on Obamacare --

RYAN: Say it again?

UNIDENTIFIED FEMALE: On Obamacare replacement (inaudible)

RYAN: It 's coming -- it 's after the recess. We 're working on -- we 're waiting for our scores. So I hate to tell you that CBO and joint tax are going to give us exactly what we want when they say they 're going to give it to us. So pending our drafting issues, we 're going to be bringing it up after the recess -- after the district work period, excuse me.



BOLDUAN: All right. We 're listening right there to House Speaker Paul Ryan in his weekly press conference, make -- offering up a lot of news, talking tax reform, one of his favorite topics and also saying with regard when asked about the leaks, that we 've talked so much about. He said if it 's classified, that 's criminal and there should be a criminal investigation, that coming from the House Speaker.

On Obamacare, before we got to the press briefing, he did also make a big announcement. There 's finally, it appears, a timeline for how they will be moving forward with the repeal and replace of Obamacare. And House Speaker Paul Ryan announcing at the -- at the top after the upcoming president 's day recess they will be introducing legislation to do just that, repeal and replace Obamacare.

And then of course he tried to sabotage reporters by throwing their audio recorders on the ground stopping them from doing their job. I 'm just kidding, a funny, light moment in that press briefing. We 'll get back to the serious stuff now, though, we are watching, we 're going to take you for a live look at the confirmation hearing of President Trump 's pick to the U.S. Ambassador to Israel.

Well, that 's democratic Senator Tim Kaine right there, of course. David Friedman he is -- he is a pick to be the next U.S. Ambassador to Israel. He 's the pick also that five former U.S. ambassadors to Israel have called unqualified spoken out against his nomination. A lot more to come on this, that 's next.


BOLDUAN: Moments from now, President Trump will be holding a news conference. And he will be announcing his new pick for Labor Secretary. This, of course, after his first nominee withdrew his nomination over opposition he was facing. We 'll bring that to you live, and we 'll see if the president takes questions and how many. And also happening right now, a highly-anticipated confirmation hearing on Capitol Hill as President Trump 's pick for ambassador to Israel faces a senate foreign relations committee.

David Friedman is known for his staunch support of Israel, Israeli settlements among that and also his opposition to a two-state solution. Five former U.S ambassadors to Israel have come out against Friedman 's nomination. They called him unqualified saying that he holds radical positions but, still, he -- he 's very close to President Trump. And he shares his views. Let 's go -- let 's discuss much more of this as David Friedman is facing a confirmation hearing right now.

With me now is President Obama's former deputy national security adviser and now seen in global affairs analyst, Tony Blinken. It 's great to have you here, Tony.

TONY BLINKEN, GLOBAL AFFAIRS ANALYST: Thanks, Kate. Good to be here.

BOLDUAN: So you have David Friedman testifying. But we also heard quite a lot already from President Obama just yesterday in his joint news conference with the Israeli prime minister. And especially on the -- his view of the Middle East peace process and specifically the two-state solution. To remind the viewers, listen to this.


DONALD TRUMP, PRESIDENT OF THE UNITED STATES: So I 'm looking at two- state and one-state and I like the one that both parties like. I 'm very happy with the one that both parties like. I can live with either one. I thought for a while the two-state looked like it may be the easier of the two. But honestly if be and if the Palestinians have -- if Israel and the Palestinians are happy, I 'm happy with the one they like the best.


BOLDUAN: So when you heard this, what was your reaction to this?

BLINKEN: You know, Kate, I 'm not sure that president fully understands the implications of what he said.

BOLDUAN: Why do you think that?

BLINKEN: He 's in moving away from a two-state solution and endorsing the possibility of a one-state solution, what he 's saying is, forget Israel as a Jewish, democratic state. In a one-state solution, it can 't be both because Palestinians and Arabs will eventually become a majority of the population. If you 're going to give them the vote and treat them democratically, Israel loses its Jewish character.

On the other hand, if you try to preserve its Jewish character by denying them the vote, deny them for representation, it 's not a democracy. I don 't think the president should want to preside over the demise of the dream of a Jewish democratic Israel. That 's what 's going on for the one-state solution. BOLDUAN: You hear from the White House is, the president didn 't take a side. He wants -- he wants the parties involved to make their decision and there, also you can hear Donald Trump saying where the U.S. has stood and what the U.S. has pushed for and other international partners have pushed forward for so long for decades, it hasn 't worked. You 've opened the possibility that a Donald Trump approach could then?

BLINKEN: Well, the one thing I think that was positive that he talked about, although it 's not new, is trying to bring more Arab countries into the process of trying to find peace. And of course, this goes back to the 2001 Arab peace initiative. But that was also premised on the two-state solution. Secretary John Kerry when he was still Secretary of State was trying to bring the Arab countries back in to help support the process.

But this can 't lead to a good place if it leads to one state if you care about a Jewish democratic Israel.

BOLDUAN: And you assume that he does?

BLINKEN: One would hope. One would think. So maybe he hasn 't focused on this enough. I hope that when he does, he 'll recognize that the only path forward, again, if you want a Jewish democratic Israel is two states.

BOLDUAN: One thing that was definitely on display yesterday was the closeness of the relationship between the Israeli prime minister and the president. I mean, they looked like the fastest of friends. And I think they wanted it to look at they. Now that you are no longer in the White House, can you describe how rocky the relationship really was between President Obama and Netanyahu? Because it seemed that they wanted to make a show, it 's different now.

BLINKEN: Well, Kate, it 's no secret they didn 't have the closest personal relationship. But where it mattered, that is Israel 's security, to date, no president has done more than President Obama for Israel 's security. If you look at --

BOLDUAN: And Israel does like always acknowledges that even --

BLINKEN: Indeed. Prime Minister Netanyahu 's acknowledgment.


BLINKEN: He called it unprecedented. So I think where the rubber meets the road, the relationship was as good as it 's ever been.

BOLDUAN: Let me ask you about the news came out today. The president is now considering this broad review of the intelligence agencies and also considering bringing in an outsider, Stephen Feinberg, a private equity guy but as far as we could see has no national security experience. Do you think a review of the intelligence agencies is needed? What do you think this is?

BLINKEN: It 's very troubling. Because the first question is, why? What for? What 's the purpose of the review? What 's the scope of the review?

BOLDUAN: What if it is just because they want to find leakers?

BLINKEN: Well --

BOLDUAN: Is that good enough?

BLINKEN: That 's not the way to do it. First, when you have a review, you really have to know what it 's for, what the purpose is, what the scope is. Second, keep this in mind. When you do these reviews, it really has to be for something exceptional because you 're basically taking people away from their jobs to try to work on this review. People whose job it is to protect the security of the United States.

That 's generally not a good idea. But in this context it 's even worse because there 's so much suspicion already about the relationship between the president and the intelligence community. This just feeds that. The notion that he would be in effect putting someone in who is close to him to do this review who has apparently no experience in intelligence. In fact, as far as I can tell, he 's an investor who is investing in some companies related to security, but that 's about it.

That 's not a good place to go. There 's a lot of speculation that the purpose of this actually, putting him in charge of this review is to then build him up so we can actually take a full-time job as leading either the national intelligence or the CIA.

BOLDUAN: Even (inaudible)

BLINKEN: Indeed.

BOLDUAN: Oh, we will see.

BLINKEN: Oh, yes. And we 've had history with this before. You know, President Reagan appointed a businessman to do this and it didn 't work out so well.

BOLDUAN: Good to see you, Tony.

BLINKEN: Thanks, Kate.

BOLDUAN: Thank you so much.

BLINKEN: Thanks for having me.

BOLDUAN: I really appreciate. We 'll have you on much more for your insights. We are waiting once again, we 're going to remind you, we 're waiting for President Obama to come and speak to the cameras. Speak to the media in the news conference. He 'll be holding a news conference very shortly at least in part to announce his new nominee for Labor Secretary after Andrew Puzder has removed himself from consideration just yesterday. We 're going to bring you that all live as it happens. We 'll be right back.