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Wrong Envelope Leads to Best Picture Fiasco; Trump Budget Proposal to Focus on Spending Cuts; Trump Hosts Governors at White House. Aired 7-7:30a ET

Aired February 27, 2017 - 07:00   ET


CUOMO: We'll see if that happens. Thanks to both of you for the insight, as always.

[07:00:11] And thanks to you, our international viewers, for watching. Your "CNN NEWSROOM" is up next. For our U.S. viewers, NEW DAY is about to get at it. Let's go.


JORDAN HOROWITZ, PRODUCER, "LA LA LAND": There's a mistake. "Moonlight," you guys won Best Picture.

CUOMO: A wrong envelope brings the Academy Awards to a halt.

EMMA STONE, WINNER, BEST ACTRESS IN A LEADING ROLE: I also was holding my Best Actress in a leading role card that entire time, so I'm not sure what happened.

DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: We've accomplished almost everything we've started out to accomplish.

UNIDENTIFIED FEMALE: The budget will call for a substantial increase in military spending as well as cuts to several federal agencies.

TRUMP: You're going to see something very, very special.

TOM PEREZ, DNC CHAIR: We need to be looking at whether this election was rigged by Donald Trump and his buddy, Vladimir Putin.

UNIDENTIFIED MALE: There's no credible evidence beyond anonymous sources.

REP. NANCY PELOSI (D-CA), MINORITY LEADER: The attorney general must recuse himself.

TRUMP: I called the fake news the enemy of the people, and they are.


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

ALISYN CAMEROTA, CNN ANCHOR: Good morning, everyone. Welcome to your NEW DAY. It was a mistake of epic proportion unfolding at last night's Academy

Awards. The wrong envelope leading the presenters to announce the wrong winner for Best Picture, and it brought the Oscars to an awkward halt. "Moonlight" ended up taking home the big prize.

CUOMO: Hollywood's biggest night also had its share of political moments. Taking on President Trump's travel ban with a message of inclusion as the president heads to Capitol Hill tomorrow to make his first address to a joint session of Congress.

We have to all covered. Let's start with CNN's Stephanie Elam, live in Los Angeles, up all night because of the big gaffe.

STEPHANIE ELAM, CNN CORRESPONDENT: Yes, it was a big one. I mean, right at the end of the show on top of it, Chris, a big moment there. The biggest award of the night. And then you have this major snafu, and you can see that everyone was in shock. The audience on their feet and, if you missed it take a look.


DUNAWAY: "La La Land."

ELAM (voice-over): The Academy Awards are billed as Hollywood's biggest night, but this year's ceremony ended with what could be one of the biggest screw-ups in its history.

HOROWITZ: I'm sorry. No, there's a mistake. "Moonlight," you guys won Best Picture.

This is not a joke.

UNIDENTIFIED MALE: This is not a joke. I'm afraid they read the wrong thing.

HOROWITZ: This is not a joke. "Moonlight" has won Best Picture. "Moonlight." Best Picture.

ELAM: It was a "La La Land" producer who announced the gaffe.

HOROWITZ: I'm in a little bit in a daze. They just handed us an envelope and the awards, and we just kind of started accepting and everybody came up. And then there were some people with headsets that started kind of coming out on the stage, and it was suddenly clear that something wasn't right.

BARRY JENKINS, BEST ADAPTED SCREENPLAY, "MOONLIGHT": Very clearly, even in my dreams, this could not be true. But the hell with dreams. I'm done with it, because this is true. It is true. It's not fake. We've been on the road with these guys for so long, and it was so gracious, so generous of them. My love to "La La Land." My love to everybody.

ELAM: The reactions backstage were equally confusing.

EMMA STONE, BEST ACTRESS, "LA LA LAND": Is that the craziest Oscars moment of all time? Cool. Guys, we made history tonight.

JENKINS: I noticed the commotion that was happening, and I thought something strange had occurred. And then I'm sure everybody saw my face, but I was speechless.

ELAM: After the mistake, when the biggest prize was corrected, "Moonlight" ended the night with three wins: Best Picture, Adapted Screenplay and Actor in a Supporting Role for Mahershala Ali, who becomes the first Muslim actor, to win an Academy Award.

MAHERSHALA ALI, BEST ACTOR IN A SUPPORTING ROLE: It's not about you. It's about these characters. You are serving -- you're in service to these stories and these characters. And I'm so blessed to have had an opportunity.

ELAM: A new record was set for the most black Oscars winners in a single year, with five taking home awards in four different categories.

JIMMY KIMMEL, HOST, THE ACADEMY AWARDS: It's important that we take a second to appreciate what is happening here. We're at the Oscars, the Academy Awards. You're nominated. You got to come. Your families are nominated. Some of you will get to come up here on the stage tonight and give a speech that the president of the United States will tweet about in all caps during his 5 a.m. bowel movement tomorrow.

ELAM: While Oscars host Jimmy Kimmel took jabs at President Trump throughout the telecast, it was the Best Foreign Language Film win by the Iranian director Ashgar Farhadi, where politics took center stage, Farhadi boycotting the awards show in protest of President Trump's travel ban on seven majority Muslim countries.

Iranian-American astronaut Anousheh Ansari accepted on his behalf.

ANOUSHEH ANSARI, ASTRONAUT/IRANIAN-AMERICAN BUSINESSWOMEN: Dividing the world into the "us and our enemies" categories creates fears. A deceitful justification for aggression and war. These wars prevent democracy and human rights in countries which have themselves been victims of aggression.


[07:05:13] ELAM: All right. Now back to that big card snafu. Emma Stone did hold onto her card. That's true. That's because there are two cards, and there are two accountants. And that's so that they can make sure that one card says the right name of who won, and then the other person can confirm that when it's said on stage.

But one card was not discarded and somehow ended up in Warren Beatty and Faye Dunaway's hands. The -- PricewaterhouseCoopers coming out with a statement saying, "The presenters had mistakenly been given the wrong category envelope."

And just to put this into perspective of what this means, Chris and Alisyn, when you take a look at a movie like "Moonlight" that was made in 25 days -- shot over 25 days and made for about $1.5 million, this would have been a huge upset on its own that "Moonlight" won over "La La Land." But that is all being overshadowed by this snafu.

But I have to tell you, after talking to both camps, there at the Governor's Ball, talking to Barry Jenkins, talking to Jordan Horowitz, there is a lot of love between those two films and the people that made these films. And you can see that in the way they spoke about each other. So a lot of class in how both sides handled this.

CAMEROTA: That's nice. Stephanie, thank you very much for all of that. You know, so many people say this is reminiscent of what happened with the epic mistake that Steve Harvey made when he was hosting the Miss Universe pageant. And Steve Harvey has just tweeted a few moments ago. He said, "Good morning, everybody. Went to sleep early last night. So what did I miss?"

CUOMO: The Miss Universe contest had also tweeted to the Oscars people: "Call us. Have your people call our people. We know how to handle this. But big difference. That was on Steve Harvey. He screwed up. This was supposedly not on Beatty, and who was it he was with?

CAMEROTA: Faye Dunaway.

CUOMO: Fay Dunaway. Faye Dunaway. It wasn't on them. It was on the accounts -- although did you see how that producer -- this is sensitive to us as talent -- do you see how the producer snatched that card out of Beatty's hands? It was almost like, "You people can't do anything right. Here's who won."

CAMEROTA: I know. That was great. I mean, he recognized where the camera was: "Let me show you who won. 'Moonlight.'"

CUOMO: It was good how he took control of it. And he made sure he cut it off as soon as possible. Turned into a net positive.

CAMEROTA: That was classy.

CUOMO: All right. So the Trump administration is expected to reveal its budget proposal in just a few hours ahead of the president's big primetime address to a joint session of Congress. That's tomorrow night. The plan is expected to ramp up military spending in a big way, make some cuts to federal agencies, but also have a huge tax cut. So what are they going to do about the deficit? Will the politics poison his own plans?

Thirty-eight days in. CNN senior Washington correspondent Joe Johns live at the White House with more. This could be the first political showdown between Trump and the Tea Party. The deficit hawks.

JOE JOHNS, CNN SENIOR WASHINGTON CORRESPONDENT: That's very right as a matter of fact, Chris, and you know, among the things that we know is going on, they're expecting to give us a better idea of the budget blueprint. The very first budget blueprint for this administration.

As you said, we are expecting them to ramp up spending for the Pentagon, cut back on spending for many of the other agencies; and they say they're going to leave the entitlements Social Security and Medicare alone.


JOHNS (voice-over): President Trump expected to call for a substantial increase in military spending and massive cuts to several federal agencies in the first draft of his administration's budget proposal. The plan targeting agencies, including the Environmental Protection Agency, while aiming to protect Social Security and Medicare.

Last night, ahead of a meeting with the National Governors' Association this morning.

TRUMP: I think you're going to see something very, very special.

JOHNS: Trump repeating criticisms and vowing to scrap Obamacare, despite a lack of Republican unity around any plan.

TRUMP: It doesn't work, but we're going to have it fixed. And we're going to repeal and replace.

JOHNS: Ahead of his first address to a joint session of Congress Tuesday night, Trump trying to project an image of success.

TRUMP: It's been a lot of fun, but we've accomplished almost everything we've started out to accomplish.

JOHNS: This amid growing calls for an independent investigation into alleged communications between Trump campaign aides and Russians known to U.S. intelligence. Leaders on both sides of the aisle suggesting a Justice Department led by Attorney General Jeff Sessions can't be impartial.

SEN. DARRELL ISSA (R), CALIFORNIA: You cannot have a friend of mine, Jeff Sessions, who was on the campaign and who was an appointee. You're going to need to use the special prosecutor's statute.

REP. NANCY PELOSI (D-CA), MINORITY LEADER: The attorney general must recuse himself.

TOM PEREZ, DNC CHAIRMAN: The American people need to understand whether the Russians, in cahoots with the Trump folks and others, rigged the election.

JOHNS: President Trump attempting to quash the headlines, tweeting, "Russia talk is fake news put out by the Dems and played up in the media in order to mask the big election defeat and the illegal leaks."

[07:10:07] The White House taking unprecedented measures to clamp down on leaks. Press Secretary Sean Spicer checking the work and personal phones of aides last week to make sure they weren't using encrypted texting apps or corresponding privately with reporters. Specifically asking his staff not to leak information about the meeting or the crackdown effort.


JOHNS: Today the president is expected to meet again with members of the National Governors' Association. And we're also expected to see top Republican leaders from Capitol Hill here at the White House talking with the president in advance of his big speech to Congress tomorrow.

Back to you.

CAMEROTA: OK. Joe, thanks so much for all of that. Joining us now is Robert Wasinger. He is the former director of Senate affairs for the Trump campaign and a former senior official for President Trump's transition. Rob, thanks so much for being here. Welcome to the program.


CAMEROTA: All right. Let's talk about what Joe Johns was just laying out there in the piece. The questions that persist about the contacts that were made from people on the Trump team with Russia. You were part of the transition. What do you know about the relationship between team Trump and Russia?

WASINGER: Well, I think right now everybody needs to kind of take a step back. All we really know, the only thing that's come out is that the national intelligence community illegally wiretapped a private citizen having a conversation. That's the only thing we know. The rest of it is very imprecise allegations, rumors and innuendo. And in fact, half the time, I don't even know what the allegation is about these contacts.

CAMEROTA: Well, I'll spell it out for you. The allegation is that there were repeated contacts between high-level Trump aides and Russia and that this was before Mr. Trump was in the White House. Which of course, as we know, there's only one president at a time. And so that would run afoul of rules and tradition that you don't start negotiating with Russia beforehand, as well as because of Mr. Trump's conciliatory tone. Perhaps the relationship was cozy.

WASINGER: I think again, like I said, what we have is the national intelligence community with illegal tapping, letting out that information to "The Washington Post" in an effort to take out former national security adviser Michael Flynn.

And I think if you take a step back at some of the other elections where allegations like this have been made, particularly in '96 with Clinton-Gore and the Chinese fundraising, we had actual evidence of the Chinese trying to influence the election through financial contributions. The vice president was making fund-raising calls out of the -- out of his official office. Those are real illegal activities.

What we're talking about here again is just a very amorphous, imprecise allegations. And again, the only real fact that we have is that the national intelligence community illegally tapped Michael Flynn, a private citizen, having conversations.

CAMEROTA: So you don't think that what the 17 intel agencies have said about Russia hacking the DNC, you don't think that that's real evidence?

WASINGER: I don't think we have all the facts in that regard. All I'm saying is what's been reported so far and what we do know doesn't lead to an investigation that even needs to occur. I think a lot of this is just confusion that the media is trying to pull it up, distract -- to distract the president from implementing his agenda.

CAMEROTA: But again, how is it the media's fault or that the media is concocting the fact that the intel agencies said that there was hacking from the Russians?

WASINGER: We don't know. We don't know what has been said or what hasn't been said between the intelligence communities. All we know is what I've already talked about. And at this point, I don't think there's enough for an investigation to even go forward.

CAMEROTA: The intel agencies do listen in on phone calls of Russian officials. So why do you believe that what they did was illegal when they captured the phone call with Michael Flynn?

WASINGER: Well, Michael Flynn is a private citizen, and he has his own rights. I don't think the national intelligence community should be wiretapping private citizens in the United States and then releasing that information to the media. I think that's a very dangerous place to go, and I think it's something that probably most Americans would agree with. I think Democrats, liberals, Republicans, conservatives, everybody can agree that our national security community should be wiretapping private citizens and releasing that information to the media.

CAMEROTA: Well, look, as we understand it, they were listening in on the Russian diplomat, as they do, and they capture whoever he talks to.

WASINGER: You know, what they did in terms of their surveillance, all -- look, Alisyn, the only point here is there was an illegal wiretap of a private citizen. And they're now using that to go after him. They took him out from the national security advisory committee and his NSA position.

[07:15:08] And the same attorney general, acting attorney general at the time, that made the allegation that he was subject to blackmail from Russia, it was the same one stopping the president's executive order on immigration. That is -- this is a bureaucracy, an entrenched bureaucracy in D.C. that has run amok, trying to thwart the president's agenda at every turn.

CAMEROTA: So Rob, are you saying -- so -- so are you saying that you don't think that there needs to be an investigation into this?

WASINGER: No, I don't. I don't think there's enough evidence at this point for an investigation to go forward. CAMEROTA: I mean, Michael Flynn did resign. And there are

transcripts of these phone calls. So are you interested in learning any more about those?

WASINGER: I'm always interested learning more about what's out there, what information we have gathered. That's not in question. I think more information is a good thing. I certainly support that. No question there.

What I'm saying is, in terms of investigations and even what Congressman Issa said over the weekend, we need to look really carefully at this before going forward. Because again, the only illegal activity has been on the part of the national security intelligence community.

CAMEROTA: We just don't know. Right? I mean, there are reports that there are other high-level Trump team advisers, Paul Manafort, Porter Page (ph), that also may have had contacts, and they are still being investigated.

WASINGER: Well, we'll have to wait and see what the results of those investigations are.

CAMEROTA: But why do you sound so unequivocal?

WASINGER: Because I think this is all smoke and mirrors. I think what's happened is President Trump has taken office. He's implementing his agenda through the executive orders. He's trying to get his team in place across the federal bureaucracy so that he can start changing the course of state so that we can move our agenda down the field.

And I think a lot of the conversations that we've been having so far -- the Russia leaks, you know, all the nonsense at the Oscars last night -- is just a distraction from getting that accomplished.

We have a bureaucracy that wants to thwart him. We have a judiciary that's very activist in terms of rolling back his executive order on immigration. And then we have Senate Democrats who are slow rolling the whole nomination process and holding up him getting his team in place.

By this point in the Obama administration, half the -- I think their nominees was about twice what President Trump's is right now.

CAMEROTA: Yes, but I mean, as you pointed out, it's also Republican Congressman Darrell Issa who's now calling for a special prosecutor. Do you feel that he's thwarting Mr. Trump's agenda?

WASINGER: Look, Congressman Issa's in a very tough race, a very close race. I don't think he's thwarting his agenda. I think he's taking care of his -- his election back home, which every congressman probably needs to do to make sure they get reelected. I don't hold him at fault for any of that.

But even from his original comments on the show, when he called for some kind of investigation. First it was an independent prosecutor and then over the weekend, he walked it back to having OSC, Office of Special Counsel, to the investigation, which is an entirely different matter in terms of the level of seriousness.

CAMEROTA: OK. Robert Wasinger, we will see where all of this goes from here. Thanks so much for being on NEW DAY.

WASINGER: Thank you, Alisyn. A pleasure.

CUOMO: It's a good conversation. I mean, just to be clear, Issa won his election. It was very close, hotly contested in a Democratic district. But he won. Shouldn't be campaigning right now. Maybe it's just an expression of conscience.

CAMEROTA: I think that he's referring to the town halls where people -- you've seen the groundswell...

CUOMO: Right.

CAMEROTA: ... against Republicans. And we heard it from David Drucker here, that they think that he's somehow appeasing some members -- some constituents.

CUOMO: It's a little cynical, though, when he just won his race, and he -- maybe you let the man have his conscience also.

Mike Flynn was not wiretapped, OK? The Russian was wiretapped. He got picked up on a call. That's deceptive and incorrect.

And the idea that we don't know what the intelligence community thinks about Russian hacking, Clapper came out. They came out not once but twice. They were clear about there being no dispute about the ownership of the hack responsibility. It was Russia. Just for the facts.

CAMEROTA: Investigations continue.

CUOMO: They do, but that we know. All right. So he was one of Hillary Clinton's biggest supporters. So why was President Trump singing his praises last night? Virginia's Democratic governor Terry McAuliffe is on.



[07:23:26] TRUMP: I know it's inappropriate, but I'd like to ask a friend of mine -- I just destroyed his political career -- from the other side. A man from Virginia. I've known him a long time, and he's a very good guy, Governor Terry McAuliffe, to come up and also perhaps make a toast. Thank you. Terry, where are you? Come on up. Terry.


CUOMO: President Trump, with his unique brand of humor, introducing Virginia's governor, Terry McAuliffe, as his friend at a dinner for the National Governors' Association. So a group of governors from both sides of the aisle are in Washington today to meet with the president to talk about everything, from health care to immigration.

Joining us now is Governor Terry McAuliffe, the chair of the National Governors' Association. Do you accept the praise of the president?

GOV. TERRY MCAULIFFE (D-VA), CHAIR, NATIONAL GOVERNORS' ASSOCIATION: Listen, I always take it when someone says nice things about me; but I do serve as chair of the organization, and we are 46 governors who are back in Washington talking, as you just mentioned, Chris, about health care, about immigration, about tax reform. You know, last night was the annual dinner where the president hosts us. It was a social occasion. And the president used to say before he ran for president I was the best governor in America. He didn't quite get that far last night, but we've got a booming economy in Virginia today. Unemployment's down, unemployment claims. We're in good shape. We're creating a strong, strong economy, and we're very proud of that in Virginia.

CUOMO: You've got big healthcare needs, as well. We know that that's a main item on the table. Medicaid expansion for you has been key. You got presented by plans from the Kinsey, a couple of different insurance companies. There was nothing presented to you, is my understanding, that doesn't show that we are going to have to tolerate people losing coverage with any of the Republican propositions that are on the table right now. Is that accurate?

[07:25:14] MCAULIFFE: That's accurate. Last night was the social event. Today we'll meet, Chris, for two hours with the president. I can promise you that health care will be at the top of the list.

I have huge concerns. If you eliminate the ACA, I lose $200 million a year in our budget in Virginia. Thousands of people will lose access to their health care. So I -- what I want to hear today, and the president will be asked, I would like to hear the president say today that no individuals will lose their health care in America. That's very, very important for us going forward.

CUOMO: Would you believe it if he says it? Because none of the Republican plans right now involve maintaining full coverage. They may say it, but you heard from the experts yesterday. The actuarial people, the statisticians, told you that, if they cut the subsidy for Medicaid -- and look, I know, a big problem for you guys is, this is dense. People may be changing the channel right now, because they're like, "Subsidies, I don't want to talk about this." But they're going to want to talk about it, you know, when pricing changes and care changes.

If they lose that subsidy, guys like you -- and it goes to a tax credit system. They said it could be 30 percent loss of those who have care. Maybe 50 percent loss of those who have care. Do you think you'll be able to tolerate that?

MCAULIFFE: No. And let's be very clear. There's nothing I heard over the weekend that has me going back to Richmond today feeling confident. So we're at the beginning of the process. I do appreciate Secretary Price came over and spent an hour with us. Came into the lion's den with 46 governors. But he's been on the job 15 days. I mean, it's nice talk. We want to get health care. We want to make it official. We want to make it low-cost.

But Chris, the devil is in the details. The political rhetoric of a campaign has hit the reality of governing. This is complex. You cannot take health care away from 18 million people. What are they going to do? And they have realized that they've got themselves in a real box here today.

Clearly, the ACA needed to have some modifications to fix it. President Obama said that, but the idea of eliminating this where so many millions of Americans have health care. I didn't get expansion in Virginia. I tried. We've forfeited $7.9 billion; 400,000 Virginians who paid for health care didn't get it. It's unfortunate. It was partisan politics, and it's worse.

But now we've got to move forward. But the governors -- let me tell you, Democrat and Republican, we are here, Chris. We do not want to see a repeal of ACA without a replacement that includes everybody who's covered today. I can promise you that.

CUOMO: I mean, that was my point. That Virginia, you know, expansion is very big for you. And you didn't get it, and you wind up seeing a lack of people getting care as a result. Now, a key distinction for people that should be something that's easy to grab onto. There's a big difference between coverage and access to coverage. OK? And we're hearing that phrase "access to coverage." What is the difference, and what will it mean to states like yours?

MCAULIFFE: Well, there are two main things they're talking about. No. 1 is block grant. And let me be crystal clear. Any time the federal government says they're going to block grant, that means the federal government is going to save money. It's going to cost the states money.

CUOMO: Well, block grant would mean they're going to give you a chunk of money, but the talk right now is that it would put a burden on the states of matching money and adding money, which would be different than right now.

MCAULIFFE: I would get a set amount of money. If I got the same amount, it's about 4.6 billion today. Those -- that is all the money I would have. And then, if we hit a recession, or the statuary goes down, any increased individuals...

CUOMO: It's on you.

MCAULIFFE: ... I have to pay 100 percent. I have to pay it.

The other is the per capita rate. The federal government would give us money based on everybody is in the system. Here's the question, Chris. We're in that expansion state. Thirty-one states took it. How do I get treated? Those 400,000 Virginians who have been left out? So that is a big issue for us today. People want coverage, and

they've got to quit talking about healthcare like it's a number. People want to be treated like individuals. They want personalized health care. They want quality care, and treat them with dignity, instead of they're just some number out there in a health care form. These are human beings.

CUOMO: And the reason I bring up this access versus coverage is because one thing that people are going to want more than anything else is the truth. "I know I can keep my doctor if I can't. I know the deductibles are going to be you under control if they're not. It's got to be straight talk, so that's why we'll try to police it as best we can. "

Quick question for you. The DNC has a new chair. Perez did a little Solomonic thing there, splitting the baby, bringing in Keith Ellison as his deputy chair. That's unusual. There is criticism that this is party insiders keeping the party where it was, as opposed to where it needs to be. What's your take?

MCAULIFFE: I thought it was a smart move. I supported Tom early on. I've known Keith Ellison. Big supporter. I'm glad he did win. I ran for chair of the national party. I actually had the votes, and I actually made Mayor Jackson of Atlanta, deputy chair in charge of voting rights.

So listen, day to day, the party's responsible for putting the nuts and bolts together. Let's get our party. We have 38 governors up, Chris, between today and November of 2018. These governors will make a decision on the redistricting and will come up in 2021.

We are down to 16 Democratic governors.