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THE LEAD WITH JAKE TAPPER

CIA's Hacking Capability; Obamacare Replacement Bill. Aired 4:30-5p ET

Aired March 7, 2017 - 16:30   ET

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


[16:30:00]

JAKE TAPPER, CNN ANCHOR: The conservative bloc -- you heard Rand Paul earlier in the show -- very opposed to this. They think that these refundable tax credits are Republican welfare, they're calling it.

It looks as though a lot of Democrats, if not all Democrats in the Senate at the very least, are going to oppose it. Can this pass?

ABBY PHILLIP, CNN POLITICAL ANALYST: Right. I mean, this bill very much feels like it's an orphan. It has no real constituency, except for maybe GOP leadership and parts of the White House.

And even as a first step, I actually think that the multistep process is in and of itself problematic for this Congress, because to do -- they have to do the first step, which is the lowest bar, maybe 50 votes. And then they have to do subsequent steps which might require 60 votes, which will be even more difficult to get.

So, if you're a Republican and you're trying to figure out whether you will ever get this full-fledged repeal and replace, the process itself seems to be incredibly prohibitive for that. And it seems like you would start a process and never really fully finish it. And that's got to scare some Republicans, especially the ones coming up for reelection in two years.

TAPPER: The chairman of the House Intelligence Committee, Devin Nunes, of California just held a press conference and he was asked about President Trump's evidence-free charge over the weekend that President Obama had wiretapped him. Take a listen.

(BEGIN VIDEO CLIP)

REP. DEVIN NUNES (R), CALIFORNIA: The president is a neophyte to politics. He's been doing this a little over a year, and I think a lot of the things that he says, you guys sometimes take literally.

Sometimes, he doesn't have 27 lawyers and staff looking at what he does, which is I think at times refreshing and at times can also lead us to have to be sitting at a press conference like this answering questions that you guys are asking.

(END VIDEO CLIP)

TAPPER: Charles? CHARLES COOKE, EDITOR, NATIONAL REVIEW ONLINE: Well, look. I'm a

political neophyte and I don't have 27 lawyers, and I can see that that was reckless.

And I'm far from being president, but, were I president, I wouldn't have made that accusation without a great deal of evidence. There is something here. There is obviously somewhere along the line there has been a FISA court involved. There has been something surveilled.

But the notion that President Obama himself ordered Donald Trump to be wiretapped in Trump Tower is a very specific accusation and an extraordinary one to make without evidence.

JENNIFER GRANHOLM, CNN SENIOR POLITICAL COMMENTATOR: And they're doubling down on it. I mean, they have an opportunity to say -- I mean, even Nunes is basically saying, hey, don't take it seriously. But Spicer can't say that.

They're doubling down on it. So, back to the point, if the president actually has evidence, he is the one who can release it. And, of course, he's not releasing it because, of course, there is no evidence of it.

PHILLIP: This really illustrates the tough spot that the president keeps putting his allies in. Devin Nunes is a hard guy to alienate from Donald Trump. I wouldn't even consider that a huge amount of distance.

But you can see and sense the frustration there that he doesn't really know how to deal with this. And time and time again, this president continues to do things that make it very hard for his allies to defend him. And this is just one of those times.

I mean, being a political neophyte is not really an excuse once you have been sworn in as president of the United States. You have to do the job.

GRANHOLM: Hardest job in America, Sean Spicer, right?

PHILLIP: Everybody else in the White House.

(CROSSTALK)

TAPPER: I just -- I find it interesting the idea that a 70-year-old man shouldn't be held accountable for his words.

GRANHOLM: I know. And almost -- I mean, today, he had another tweet this morning which accused the Obama administration of releasing hundreds of people from Gitmo. Come to find out it was the Bush administration.

Obama administration had released nine. The Bush administration had released 122. It was wrong. But why there is no vetting of these emissions from the president.

COOKE: Because there is this idea, this latent idea that he's playing 5-D chess. But in reality he seems to be watching television and tweeting about it.

(CROSSTALK)

COOKE: His TV and his Twitter.

PHILLIP: There is also a pattern of stating things as fact that are not fact. I mean, this is really the big problem with what happened on Saturday morning, was that it wasn't just that he said, I think President Obama wiretapped me. He said, I just found out that President Obama wiretapped my phones.

And that's a definitive statement that coming from the president of the United States means something.

TAPPER: And what he actually meant was, I just read a story in Breitbart and I completely misunderstood it.

PHILLIP: Exactly.

TAPPER: Abby, Charles, Governor, thank you so much, one and all, for being here.

Coming up: using technology to spy? Newly leaked documents show methods the government can use to listen in on unsuspecting targets, including potentially turning computers, phones, even televisions into spying devices against their own owners -- that story next.

(COMMERCIAL BREAK)

[16:39:07]

TAPPER: Welcome back to THE LEAD. I'm Jake Tapper.

Our national lead today, a stunning look inside the CIA's hacking capability, seemingly straight out of a Jason Bourne film. WikiLeaks calls it the -- quote -- "largest ever publication of confidential documents from the CIA," documents they claim are from the Center for Cyber Intelligence that reveal the methods the spy agency uses to gather information on targets without them knowing, among them, turning household items such as computers or smartphones or a Samsung smart TV into surveillance tools, turning your own electronics into spy devices even when they're powered off.

The CIA hackers are apparently able to bypass encryption on popular communication applications such as WhatsApp or Signal or Confide, by hacking the smartphones the apps run on and collecting the data before the encryption is applied.

CNN cannot independently verify the information contained in these 8,761 documents and files which WikiLeaks is calling Vault 7. In a statement, a CIA spokesman said -- quote -- "We do not comment on the authenticity or content of purported intelligence documents" -- unquote.

[16:40:10]

Joining me now is former CIA counterterrorism official Phil Mudd.

Phil, thanks so much for joining us.

PHILIP MUDD, CNN COUNTERTERRORISM ANALYST: Sure.

TAPPER: I think our viewers would be surprised how easily the CIA could invade someone's privacy without them knowing it. Can the public be confident that there are controls to make sure these techniques aren't abused?

MUDD: Well, you asked the right question, Jake. They should be surprised the CIA can surveil them, because the CIA, like the FBI, has to go through a court order to do so.

You have to think of this in a couple pieces. Number one, anybody walking down the street, Jake, could break into your house. But to do that legally, the police need a warrant. The CIA can collect as many tools as they want. To look at an American through a TV or through a landline back in the 1970s, you have to go through a court order to do that.

I think the more interesting question is not whether the CIA, whether it's a phone or a television, can watch an American with a court order. It's what capabilities are we learning about that allow them to watch North Koreans, Iranians, Russians?

And I think those capabilities in this case are remarkable. For those, you would not need a court order.

TAPPER: WikiLeaks also shows documents of a CIA UMBRAGE group which they say -- quote -- "collects and maintains a substantial library of attack techniques stolen from malware produced in other states, including the Russian Federation, which would allow the CIA theoretically to misdirect attribution, leaving behind the fingerprints of the groups that the attack techniques were stolen from.

The suggestion is the CIA has the capability of framing a country like Russia for hacks.

MUDD: A suggestion? I sure as hell hope they're doing that. When you run a spy operation, one of the questions you have is deniability.

First of all, you don't want to be picked up. The second thing is, especially if it's a cyber-operation, you don't want somebody to determine what the origin of attack is. You don't want it to say made in the USA.

I worked on a program 25 years ago, 30 years ago, Jake, to arm the rebels in Afghanistan. You think we gave them U.S. weapons? We wanted deniability. We gave them Eastern European and other weapons, so that when those weapons were captured, everybody sort of kind of knew they were American-provided, but they didn't say that.

I hope the CIA is picking up material so that when -- from the Russians, from malware, from private sector so that, when they use it, whoever picks it up, the Iranians, the Russians, the Chinese or otherwise, say we're pretty sure this is the agency, but we don't know because they disguised it through a false flag operation. They used somebody else's stuff.

TAPPER: What would worry you the most if you saw this document, Vault 7, from WikiLeaks, if you still worked for the CIA and you were looking at it from inside the agency?

MUDD: Two things that we're not talking about. The first is people are talking about accessibility to what the CIA does and whether it violates American civil liberties.

Fair question. First question I would have is, when President Obama evidently spoke with President Trump about his biggest national security concern, it was North Korea. What has just been exposed to the North Koreans and the Iranians that will allow them to prevent the CIA or somebody else from hacking their stuff? That's my first question.

Does this reveal something that helps a nuclear-capable state like North Korea?

The second is like Edward Snowden, who did it, why did they do it and where are they now? There is a ton of people at the agency and elsewhere saying we're going to look at this stuff and hunt somebody down. They ought to pay.

TAPPER: Phil Mudd, thanks so much so far your perspective. We appreciate it.

MUDD: Thank you.

TAPPER: We're going to build a wall and the Coast Guard is going to pay for it? How the Trump administration could potentially hurt our defenses at sea.

Plus, drought, disease, starvation, what the United Nations is calling a nightmare hunger crisis that the world can no longer ignore.

Stay with us.

(COMMERCIAL BREAK)

[16:45:00] JAKE TAPPER, CNN THE LEAD ANCHOR: House Speaker Paul Ryan commenting on the republican plan to replace Obamacare. Let's take a listen.

PAUL RYAN, UNITED STATES HOUSE OF REPRESENTATIVES SPEAKER: -- and replace Obamacare. It delivers relief to Americans fed up with skyrocketing premiums and fewer choices. It moves us away from the broken status quo toward a better patient-centered system. That means lower costs for hard working families. It means more choices and competition, so that you can buy the plan that you need and that you can afford.

It means greater control of your health care. As you know, this is the culmination of years long of an inclusive process that we've been doing here for years. Last June, as part of our better way agenda, we put forward our vision for health care. After the election, we began to work with our counterparts in the senate. And with the Trump administration on this plan, I want to thank President Trump, I want to thank Vice-President Pence, and I want to thank Secretary Price for their support and their hard work in getting us to this repeal and replace point.

I also want to thank Chairman Brady who's going to be joining us in a minute and Chairman Walden for their leadership. Now, this bill will go through the regular order process in the house. As it does, I encourage all Americans to read this bill online at readthebill.gop. Go online and read the bill at readthebill.gop.

Doing big things is never easy, but we have made a promise and we're going to keep that promise. We made a promise to repeal and replace Obamacare with conservative solutions and reforms. That is exactly what this bill does and that's why we're here. Thank you.

UNIDENTIFIED MALE: Well, I want to echo a couple things that the speaker said. I do want to thank the president, I do want to thank the vice-president, I do want to thank our new Secretary Tom Price as well. If I just listened to the president meeting with the Deputy Whip team, he said he was proud to support this new bill. Why? Because of the years of work that has gone into it. We know why we are here today, because of Obamacare did three essential points.

One, created exchange. Well, we all know the history of what's happened to that. The failures, the companies pulling out, and now you have one-third of the entire country, 1022 counties with one only health care provider. It created 23 co-ops, provided more than $2 billion. 18 of those co-ops have collapsed.

It expanded Medicaid. Well, we know it can't sustain itself, so we have to put Medicaid on being able to sustain itself, and that's why I want to thank Chairman Greg Walden for the work that they're going through as well.

And third, it made government control health care, the regulations that it imposed upon everybody else. Well, today is a new day. And we stand proud with our president, that he supports this bill to move forward, to keep the promise that we made that we would repeal Obamacare and replace it, to put the power back with the individuals.

GREG WALDEN, UNITED STATES CONGRESSMAN FROM OREGON AND HOUSE ENERGY AND COMMERCE COMMITTEE CHAIRMAN: Hello, good afternoon. I want to thank my colleagues for their work on this, especially the president, the vice-president, Secretary Price, Mr. Brady, and the members of our Energy and Commerce Committee, especially our subcommittee chairman, Dr. Burgess, who have put in incredible amounts of time and work. Do you know this bill went public last night about this time? It's available online for everyone to see and this is the conservative alternative to Obamacare. This is how we're going to reform health care in America and give choice back to people, rescue the failing individual market. We're proud of this piece of legislation. We look forward to marketing - marking it up tomorrow. Remember, we made a promise to the American people that we're going to

keep it right here, right now, by repealing Obamacare and replacing it with something that will work for them. But remember, this is just the first step. This is just the first step. This legislation begins the process of transforming the health insurance market. It also amounts to the biggest entitlement reform since Bill Clinton signed welfare reform into law.

[16:50:06] Because we're going to restore to the states authority that's been taken away from them, make them have to not come here to Washington and ask some bureaucrat for permission to do everything. And instead allow them to innovate, to be creative, to get their hands around patients who need their help the most, and to best use those dollars. And with Medicaid, it amounts to per capita allotment so they'll know what they can expect. It works for them. We've worked closely with the governors.

And so, tomorrow at 11:00 or 10:30, we'll kick off our markup. We'll begin this process in an open and transparent way. But let me say again, look, we're going to make sure those who have pre-existing conditions continue to get health care and health insurance. We're going to make sure there are no lifetime caps and we're not going to kick your kids off their plans until after they turn 26. We'll help you kick them out of the basement, maybe, but not off their health insurance.

This is important work we're doing. We look forward to moving forward on it, and to providing the rescue for the individual market and relief to the states and help to the people that sent us here to get this job done.

RYAN: I think Mr. Brady is still at the White House, so we'll just -- we were going to have him go next, but we'll just go to questions. Casey.

UNIDENTIFIED FEMALE: (INAUDIBLE)

RYAN: I'm prepared to lead our conference to doing what we said we would do in the election. We actually ran on a repeal and replace plan. That's what this is, the repeal and replace plan we ran on. Now, I am intent on making sure that we fulfill our promises. But I believe in regular order. I believe in going through the process the way it was meant to go through. We didn't write this bill in my office on Christmas Eve like they did in Harry Reid's office and then jamb it through to the - to an unsuspecting country. These committees are writing this legislation, these committees will be marking up a legislation. These committees will be marking up a legislation tomorrow, and then it goes to the budget committee the next week, and then it goes to rules committee before the week after that which is regular order.

So, I'm excited that we're doing this the right way. I'm excited we're doing this out in plain sight. Go to readthebill.gop. What I want to tell my fellow citizens as the nightmare of Obamacare is about to end, that we are doing what we said we would do in this campaign which is repeal and replace this awful law that is crashing. Let me say one more thing. Let's not forget, Obamacare is collapsing. Obamacare isn't staying. If we did nothing, the law would collapse and leave everybody without affordable health care. We are doing a act of mercy by repealing this law and replacing it with patient- centered health care reforms that we as conservatives have been arguing for and fighting for for years. (INAUDIBLE)

UNIDENTIFIED MALE: (INAUDIBLE)

RYAN: I don't think so. Let me -- let me just give you a list of what's in here that conservatives should be excited about. Number one, the bill repeals Obamacare. Number two, it repeals the Obamacare taxes, which is a massive tax relief for families for the cost of health care. It repeals the Obamacare spending like the Medicaid expansion and the Obamacare subsidies. It repeals the Obamacare mandates on individuals and businesses. It ends funding for Planned Parenthood and sends that money to community health centers.

It has a Medicaid per capita block grant. That's the biggest entitlement reform anybody has seen here for decades. It nearly doubles the amount of money people can contribute to health savings accounts. That is a fundamental part and a crucial part of conservative health care policy. It equalizes the tax treatment of health care. I've been doing conservative health care reform for 20 years. For 20 years, we as conservatives have been arguing for equalizing the tax treatment of health care for all Americans, so we're going to vibrant individual markets, so we have choice and competition.

Look, here's -- there are two ways of fixing health care; have the government run it and ration it and put price controls. That's what Obamacare does. That's what the left wants. Or do what conservatives have been arguing for for years, have a vibrant free market where people get to do what they want, they buy what they want. Equalize the tax treatment. Stop the discrimination of tax code against people who want to go out in the free market place and buy the health care of their choosing. This does that; this lowers cost, creates competition and allows choices. The most important thing that this thing does, is it takes power out of Washington, takes power out of the bureaucracy and puts it back to doctors and patients where it belongs. Yes?

UNIDENTIFIED FEMALE: (INAUDIBLE) 10 million people could lose their coverage. Is that acceptable to you?

[16:54:50] RYAN: Look, what matters is that we're lowering the costs of health care and giving people access to affordable health care plans. Look, the government will always win the war on government-run plans saying, if we mandate, everybody buys what we say they have to buy, then the government will always estimate that they'll buy it. I just think that's bogus. That entire premise of that comparison doesn't work.

The fact is we're not going to have the government tell you what you must do; tell you what you must buy. We're going to allow the market to do that. We're going to let people decide what they want to do with their lives, and we want to lower costs by having more competition and equalizing the tax treatment of health care having health savings accounts, that gives people the freedom to buy the plan they want and can afford. Yes?

UNIDENTIFIED MALE: (INAUDIBLE) 218 votes?

RYAN: We will have 218 votes. This is the beginning of the legislative process. We've got a few weeks. We're - we'll have 28 -- 218 when this thing comes to the floor, I can guarantee you that. Yes?

UNIDENTIFIED MALE: What do you say to folks who say this bill (INAUDIBLE)?

RYAN: Read the bill. Go to readthebill.gop. Yes?

UNIDENTIFIED FEMALE: (INAUDIBLE)

RYAN: Well, it's not - it's not that this is open for negotiations. What Mike is trying to describe is we envision three phases occurring here. So, let me describe to you what the three phases are. Number one is this bill which we use is reconciliation. As you all know you can't filibuster a reconciliation bill. So, this repeal and replace bill is what we pass to reconciliation. Phase two, all the regulatory flexibility that the secretary of HHS has to deregulate the market place, to lower the cost and stabilize the market, that's what Tom Price will do.

There's something like 1400 instances in this law that gives the secretary discretion. Secretary Tom Price unlike the Obama administration will use that discretion to bring more market freedom and market stabilization. So, that's phase two.

Phase three is to pass the bills that we want to pass that we cannot put in reconciliation, because of those budget rules. What's an example of that? Interstate shopping across state lines. We love that policy, we think it's critical. But as you well know, you cannot put that in a budget reconciliation bill otherwise it could be filibustered. We also believe in association health plans.

Let people through their trade associations, farmers of the American farm bureau plan, restaurant tours to the National Restaurant Association plans, small businesses through the NFIB plan, bulk buy their health insurance and nationwide buying pools. We very much believe in that policy but we know the rules don't allow us to put that in reconciliation. Medical liability reform, the practice of defensive medicine is cranking up health care costs, practicing defensive medicine which makes health care ultimately more expensive for everybody. But we know we can't put that in reconciliation.

Those phase three bills, we're going to move also at the same time, and we're going to push those to the finish line. But those will ultimately take 60 votes in the senate. So, phase one is this repeal and replace bill. Phase two, Tom Price deregulates the market and brings certainty so that we can have more choices and more plans and get the states back in the game of have - of being able to regulate health care. Phase three, pass those reforms that we believe in, that we think will make it even better, but we know we can't put it in reconciliation because of the 60-vote threshold. Thank you very much, everybody. Appreciate it.

TAPPER: We had the republican house leadership talking about the very first steps in their effort to repeal and replace Obamacare. Let's go to Phil Mattingly also on Capitol Hill. Phil, still the question remains, will republican conservatives, will the rank and file come behind Speaker Ryan and support this effort?

PHIL MATTINGLY, CNN CONGRESSIONAL CORRESPONDENT: Yes, and clip and save Speaker Ryan's words, just now, I just stepped out from where he was speaking. And he said he would guarantee that they would get 218 votes. He would guarantee that they would get the majority for the bill that they've introduced last night, that he and his team are now trying to sell. And there's no question about it, Jake, to get to that point, they need to persuade a lot of very wary conservatives, some of whom held a press conference just an hour ago, talking about why this plan did not go far enough.

And, Jake, I think the big issue here going forward is even as the Trump administration clearly gets on board, clearly starts joining the house republican leadership in selling this proposal is, do they have the juice to get those conservatives in line? Speaker Ryan says yes. He was asked, "Can you do what Nancy Pelosi did in 2009, which is get your caucus or in the republican case, your conference together to move this forward?" He said, absolutely. One of the big questions is obviously committees will start working on this bill as of tomorrow. Then it will move over to the house floor.

How much room is there for negotiation? How many changes can be made in this initial bill to try and pacify or assuage the concerns of those conservatives? I'm told from house republican aides, there isn't a lot that they can do to change the general direction of this. That makes what Speaker Ryan is going to have to do behind closed doors and the days ahead, and most importantly what President Trump, Vice-President Pence and Secretary Price are going to have to do behind closed doors in the days ahead, exceedingly important to try and move those individuals who aren't just wary, but out-right opposed back in line, Jake.

TAPPER: That's right, Phil. As you know, many republicans calling this replacement effort Obamacare 2.0 or republican welfare. Our thanks to Phil Mattingly. Be sure to follow me on Facebook and Twitter @JakeTapper or you can tweet the show @TheLeadCNN. That's it for THE LEAD. Turning you over now to Wolf Blitzer in "THE SITUATION ROOM".