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THE LEAD WITH JAKE TAPPER

Interview With Iowa Congressman Steve King; Catholic Church Changes?; Trump Administration Under Fire Over Flynn Controversy; Does Trump Believe Job Report Numbers?; White House Trump Unaware Flynn Worked As Foreign Agent; Trump Asked for Wiretap Evidence, Offers None; White House Praises Jobs Report, Called Past Numbers "Phony". Aired 4-4:30p ET

Aired March 10, 2017 - 16:00   ET

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


[16:00:15]

JIM ACOSTA, CNN ANCHOR: The president taking credit for jobs numbers he once would have called fake news? Hey, who put that phrase in the prompter?

THE LEAD starts right now.

President Trump puts his deal-making skills to the test, as he sits down with the heads of key House committees about replacing Obamacare. Are they still on the same page?

Foreign agent man. The White House says it had no idea that the president's ex-national security adviser was a paid international lobbyist during the campaign. So, what happened to extreme vetting there?

Plus, ringing in a new era, a brand-new era? The pope considering a change 1,000 years in the making. Will married Catholic men soon be able to join the priesthood?

Welcome to THE LEAD. I'm Jim Acosta, in for Jake.

President Trump today seeming to embrace his role as the public face of the Republican health care bill, even as CNN learns that the White House appears open to changing the bill to appease skeptical conservatives.

CNN's Phil Mattingly joins me now.

Phil, the White House may be seeing this bill more as a starting point than a finished product, but that's not true for House leaders, right?

PHIL MATTINGLY, CNN CORRESPONDENT: Yes, that's exactly right, Jim.

And it's the kind of disconnect that can threaten a major piece of legislation like this. If nothing else, it certainly creates a new hurdle, a hurdle that joins a whole lot of other ones, Jim.

(BEGIN VIDEOTAPE)

MATTINGLY (voice-over): Behind the scenes, House GOP leaders now running headlong into the White House on their health care proposal.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: That's what people want. They want repeal and replace.

MATTINGLY: As top committee chairs met with President Trump today, sources telling CNN White House officials, including the president himself, are amenable to conservative requests to change a crucial component of the bill.

TRUMP: It provides states with flexibility over how Medicaid dollars are spent, giving power from Washington and back to local government.

MATTINGLY: But trimming the sunset of Obamacare's Medicaid expansion to 2017 from 2020, it's a move House Republican leaders, at least for now, have no plans on making.

REP. KEVIN MCCARTHY (R-CA), HOUSE MAJORITY LEADER: I think right now that it would be very difficult to do.

MATTINGLY: And despite Trump's openness to the idea, GOP leaders making a not-so-subtle point today: You knew what was in the bill. You knew the strategy, and you were clearly on board.

QUESTION: If you walk into the White House today and the president says, this needs to change, this needs to sunset in 2017, and not 2020, how do you respond to that?

REP. GREG WALDEN (R), OREGON: Well, first of all, I look forward to meeting with the president. We have been in regular contact with his team. We look forward to the president's direct involvement.

MATTINGLY: For GOP leaders, what to do about the Medicaid expansion is among the most delicate issues in the bill; 31 states and the nation's capital accepted funds from the expansion, which delivered coverage to around 11 million people.

WALDEN: As we repeal Obamacare, we want to make sure that we don't create gaps.

REP. PAUL RYAN (R-WI), SPEAKER OF THE HOUSE: Here's the problem with Medicaid.

MATTINGLY: But conservatives have made clear the expansion has to go as soon as possible.

REP. RAUL LABRADOR (R), IDAHO: Leadership needs to have a my way or the highway, or take it or leave it kind of approach. And they do that in every single piece of major legislation. I think the president understands that people with different ideas can come together.

MATTINGLY: For now, the White House trying to tread carefully, despite a comment from the president today that could be seen as stepping into conspiracy theory territory again.

TRUMP: Seventeen would be a disaster for Obamacare. That's the year it was meant to explode because Obama won't be here.

SEAN SPICER, WHITE HOUSE PRESS SECRETARY: Right now, the date that is in the bill is what the president supports.

MATTINGLY: As House leaders try and make conservatives happy without losing those moderates.

MCCARTHY: Not everything that we would like to have in the very first phase could be in the bill. We're going through three different phases.

MATTINGLY: That three-part process will require no shortage of back- end work, with unilateral regulatory actions to future legislation.

MCCARTHY: Sometimes, when you have push back on one side and the other side, from a political spectrum, you might have found the sweet spot.

(END VIDEOTAPE)

MATTINGLY: And, Jim, as they have continued to search for that sweet spot, it's worth noting over the last couple of days the president and his team have met with a number of conservative groups who are opposed to this House plan.

That changed today. The president sitting down with the very House chairman who wrote this proposal. One source familiar with the meeting told me those individuals made very clear to the president, this is the plan going forward. Don't expect major changes in the House. And the White House said that they were behind this from the very beginning -- Jim.

ACOSTA: Phil Mattingly, thank you.

For more, I want to bring in Congressman Steve King, Republican of Iowa.

Congressman, thanks for joining me.

REP. STEVE KING (R), IOWA: Pleasure, Jim.

ACOSTA: Thanks for doing this.

House Speaker Paul Ryan says this bill is Republicans' last chance, their last best chance to fulfill this campaign promise to repeal Obamacare. Is any Republican who doesn't support this bill then deciding to keep Obamacare? What do you say to that?

[16:05:05]

KING: Well, I don't agree with that.

And, of course, we don't have a bill that's off the floor yet and we have got a Rules Committee that will meet. There will be amendments that will be offered up at the Rules Committee. Leadership will have a lot to say about which amendments might be offered. But we have a chance to improve this legislation. And we always say

that we want to perfect the legislation at every stop along the way. So, no, I don't agree with that, but I understand the message that's wrapped up in that.

ACOSTA: And do you think it's a little bit cockamamie that members are being asked to weigh in on this bill before it has even been officially scored by the Congressional Budget Office? Why wouldn't you want that information before voting?

KING: Well, we do want the information before voting, and we should have the information before we weigh in on it as well.

If I remember, Barack Obama said that he wouldn't sign a bill that added one dime to our national debt. So, you know, his pledge was pretty strong, although it's obvious he didn't keep it. And the score was way off, too.

I would like to see the score. And I think we're moving a little too fast. I think we should spend two or three or four weeks examining this, giving the American people an opportunity to weigh in and let the organizations weigh in, so that we can sort this out as the House of Representatives is designed to do.

And usually when a bill comes out from behind closed doors, it needs improvement before it can be presented to the president of the United States and the American people.

ACOSTA: And speaking of improvements, or lack thereof, CNN is reporting there are negotiations under way that could bring the Medicaid sunset, they want to fix Medicaid in all of this, reduce that amount of money that is spent on Medicaid, move that up to 2017 or perhaps the start of 2018, instead of 2020.

Would that help you get to yes on all of this? And what about the prospect of millions of Americans losing their health insurance if you start restricting that Medicaid funding?

KING: Well, that movement of Medicaid maybe helps a little bit, but not that much to me.

And I look at these numbers, and we added a little over 20 million Americans that are -- that have their own policy now that didn't have seven years ago when Obamacare was passed. But 10.8 million of them were pushed onto Medicaid. So, that's just kind of a separate equation in my philosophical mind. And we also have...

(CROSSTALK)

ACOSTA: You don't think people are going to lose health insurance as a result of this repeal and replace effort? Isn't there really the possibility that millions of people could lose their health insurance?

KING: There is that possibility, but it seems as though we are creating that as the metric through which we have to view everything else. I would say this. I start with this, that we were better off before

Obamacare passed. If we would repeal Obamacare on the spot and give people, say, a year to adjust their circumstances, and have it be enacted a year from now, we would all be better off. Then onto that, we could start the reforms that are necessary.

And this underlying bill ties our hands on some of the reforms we want to do. For example, there are at least 10 mandates that are preserved from Obamacare, actually 12 of them that I can think of that are preserved from Obamacare. That nullifies or neutralizes to a significant degree our ability to try and buy and sell insurance across state lines.

Now, that and the refundable tax credit, that's a direct up-front subsidy in advance. Those things, I would like to address to make it a better bill.

ACOSTA: And, Congressman, I know you have been very much out front on the issue of immigration.

Switching gears here, yesterday, we learned there was a 40 percent drop in illegal Southwestern border crossings from January to February. That is a very big drop. Do we even need a wall anymore, this wall that the president wants to build? If it's down 40 percent, I guess you don't need a wall anymore, right?

KING: Jim, I heard that news yesterday. And I heard some of it directly from General Kelly. And I thought that. If we ever get the border crossings down to the point, we will soon say we don't need a wall because the crossings are down.

No, we do. And we do because of the illegal crossings. We do because circumstances may come back to us again, and especially, though, because the illegal drugs that come -- 80 to 90 percent of the illegal drugs consumed in America come from or through Mexico. And we need to secure the border.

We need to beef up our Coast Guard and we need to keep a lot of those drugs out of America. But we also need to address the demand in this country; 50,000 Americans die because of a drug overdose in a given year. And that's just intolerable, Jim.

ACOSTA: Yes.

Congressman Steve King, thank you very much for your time. We appreciate it.

KING: Thank you. I appreciate it, Jim.

ACOSTA: All right.

The president keeps distancing himself from his former National Security Adviser Michael Flynn and his newly discovered ties to another country. Now the White House explains why it didn't know Flynn was a foreign agent.

(COMMERCIAL BREAK)

[16:13:26]

ACOSTA: Welcome back to THE LEAD.

More on our politics leads. Just a short while ago, White House Press Secretary Sean Spicer stressed once again that President Trump had no idea Michael Flynn, the man who once briefly served as his national security adviser, was a foreign agent with lobbying ties to Turkey.

Joining me now is CNN correspondent Jessica Schneider.

Jessica, it appears the White House continues to distance itself from General Flynn. Just hours after Vice President Mike Pence said that the president made the right decision to fire Flynn, what more can you tell us?

JESSICA SCHNEIDER, CNN CORRESPONDENT: Yes, the White House, Jim, really taking a hands-off approach here.

In fact, spokesman Sean Spicer specifically stating this afternoon the president didn't know General Michael Flynn as the head of his company was acting as a foreign agent, but a source does tell me that White House counsel did know both before the inauguration and right when he was named national security adviser.

In fact, Democrat Elijah Cummings on the House Oversight Committee sent a letter to V.P. Pence on November 18 after the election raising issues of conflicts of interest, even though Pence now saying he was just made aware this week.

Of course, the potential problem here is that members of Flynn's consulting company secured meetings with Turkish officials in mid- September, at the height of the campaign, and also secured a $530,000 contract, all of this during election season.

And the goal here was to improve U.S. business dealings with Turkey, but a lot of questions about the fact that Flynn and his company, they were meeting with Turkish officials.

ACOSTA: Absolutely.

And we hear so much about extreme vetting these days. This episode brings up the question whether or not the president's team has been fully vetted. Isn't that right?

SCHNEIDER: Yes, that's right.

[16:15:00] And that was a concern that was brought up repeatedly during the press conference today. But all that Sean Spicer would say is that it's not the government's job to make sure the right legal forms are signed or that the proper paperwork is submitted.

Take a listen.

(BEGIN VIDEO CLIP) SEAN SPICER, WHITE HOUSE PRESS SECRETARY: General Flynn filed with the Department of Justice two days ago, how would anyone know? That is not up for the government to determine. There are certain private citizen's activities that you conduct and you seek counsel on, or professional advice. That's not up to the government. And that's exactly how the system works.

REPORTER: The person who is in line to be the national security advisor may need to register as a foreign agent and that does not raise a red flag?

SPICER: No, it's not a question of raising red flag, John, it's a question of whether or not they gave them the advice that they are supposed to.

(END VIDEO CLIP)

SCHNEIDER: Yes, and what's important here is that the White House should have known about this, especially because General Michael Flynn, he did file a lobbying disclosure form with Congress as far back as September 15th. So, the White House should have known, but today saying that the president did not have any awareness.

JIM ACOSTA, CNN ANCHOR: And I was at so many campaign rallies where Michael Flynn would join in with the chants of "lock her up", talking about Hillary Clinton. Do we know if General Flynn knowingly left this information out and are there any legal repercussions for this?

SCHNEIDER: There could be legal repercussions. The thing that his lawyers are saying is that they did file that congressional lobbying form but they didn't file the foreign agent form with the Department of Justice. There could be criminal implications here although that isn't usually the case. We haven't heard back from the Justice Department but we're not expecting any legal ramifications here, Jim.

ACOSTA: And, of course, you'll be watching. Jessica Schneider, thank you so much.

The White House was also asked yet again about proof to back up the president's claim that President Obama tapped his phones. Not only did the president himself offer no proof today, White House Press Secretary Sean Spicer also dodged the question. We know the Justice Department had Congress in the Justice Department as well to investigate all of this, but how much will House and Senate intelligence committees learn about these wiretap claims as they take up investigations into Russia's interference in U.S. elections?

Jeff Zeleny joins me now at the White House.

Jeff, when you look at the wiretap claim alone, the question is, does the Justice Department, does anyone for that matter have any evidence to support this? We still don't have that answer.

JEFF ZELENY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Jim, that is the biggest question in all of Washington this week, as you well know. Now, the House and Senate Intelligence Committees have indeed subpoenaed and asked the Justice Department to provide any evidence to back up this claim. But a week into this, a week after the president made this, evidence is in very short supply, here at the White House and on Capitol Hill.

(BEGIN VIDEOTAPE)

ZELENY (voice-over): It's been a full week now since President Trump leveled the explosive accusation that President Obama was spying on him at Trump Tower. But again today, still no evidence.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Thank you all very much. We're going to get to work. Thank you.

ZELENY: Asked many times, the president wouldn't say whether he had any proof to back up his unsubstantiated charges.

The White House is now trying to keep its focus on health care.

TRUMP: And that's what people want, they want repeal and replace.

ZELENY: Yet Washington is consumed by Russia and the widening investigation into any connections between the Trump campaign and Russian operatives.

The congressional probe includes allegations of presidential wiretapping, which no one seems to know about but Mr. Trump.

Adam Schiff, the top Democrat on the House Intelligence Committee, told CNN's Manu Raju he has seen no evidence, but suggests the question will come up when FBI Director James Comey testifies on Capitol Hill later this month.

REP. ADAM SCHIFF (D-CA), RANKING MEMBER, HOUSE INTELLIGENCE COMMITTEE: I haven't seen any evidence whatsoever to substantiate that and I think when Sean Spicer isn't even willing to talk about it, you know there's a real problem.

MANU RAJU, CNN SENIOR CONGRESSIONAL REPORTER: Do you think that in March 20, that hearing, Comey is going to be prepared to talk about this issue?

SCHIFF: He's certainly prepared for the question and I don't see any reason why he can't answer it. He may even welcome the opportunity.

ZELENY: The top Republican on the committee, Chairman Devin Nunes, echoed his comment from earlier this week that he had not seen any proof to back up the president's claims.

REP. DEVIN NUNES (R-CA), CHAIRMAN, HOUSE INTELLIGENCE COMMITTEE: We want to find that out. But at this point, I just don't have anything to tell you.

ZELENY: Vice President Mike Pence did not answer a question in a FOX News interview about whether he believes the president's accusations.

BRET BAIER, FOX NEWS ANCHOR: Do you think it's possible that President Obama ordered the wiretap on candidate Trump?

MIKE PENCE, VICE PRESIDENT OF THE UNITED STATES: I think we'll just let the congressional committees review that and answer those questions. Those are knowable answers and the bipartisan congressional committee is going to appropriately review the facts.

ZELENY: White House Press Secretary Sean Spicer would not say why the president has not reached out to his FBI director who met with senior congressional leaders this week. Asked today whether Mr. Trump would apologize if the investigation ultimately shows President Obama did not wiretap Trump Tower, Spicer said this.

SPICER: Let's not get ahead of ourselves. I think it's important to see where that goes and I don't want to prejudge their work at this time.

(END VIDEOTAPE)

ZELENY: So, Jim, Sean Spicer there saying that the president wouldn't necessarily apologize. He said he didn't want to prejudge it. But he also said earlier this week that the president would not necessarily accept the findings of this congressional investigation.

[16:20:03] Jim, the reality here is this has consumed and complicated the president's agenda which, of course, health care is on the top of and that is also ending the week in critical condition -- Jim.

ACOSTA: Critical condition once again. Jeff Zeleny, thank you so much.

According to then-candidate Donald Trump, the unemployment numbers were always fake. But now that he's president, the numbers are good. They're real. Why his rocky relationship with numbers could be troubling for the bigger economic picture.

Then, the Pentagon claims the deadly raid in Yemen was a success. We talked to one reporter who spoke to people who were there. They have a different story. That's coming up.

(COMMERCIAL BREAK)

[16:25:04] SCIUTTO: We're back with the money lead.

The Trump administration is celebrating today's jobs report instead of trashing it like the president has in the past.

(BEGIN VIDEO CLIP)

SPICER: I talked to the president prior to this and he said to quote him very clearly, "They may have been phony in the past, but it's very real now."

(LAUGHTER)

(END VIDEO CLIP) SCIUTTO: They are real now. According to the Labor Department, the unemployment rate ticked down to 4.7 percent, a far cry from its peak at 10 percent in 2009 during the financial crisis. The U.S. economy also added 235,000 jobs last month.

The administration called today's report great news for American workers after the president called past numbers terrible, phony, and a hoax.

I want to bring in CNN's Cristina Alesci.

Cristina, the White House joked about the change of tone today, but this was no laughing matter when the president was discrediting these numbers in the past, right?

CRISTINA ALESCI, CNN BUSINESS CORRESPONDENT: That's right.

Government data in general is very serious business and some emerging markets as you know, Jim, and even countries like China, there are serious questions about whether the data is legit. So, the U.S. right now doesn't have that problem. But comments like the one Spicer made today give government statisticians and economists pause and they don't believe officials should undermine the data one month and promote it when it's convenient. And some think it's dangerous.

(BEGIN VIDEOTAPE)

TRUMP: I hear, 5.3 percent unemployment. That is the biggest joke there is.

Don't believe those phony numbers.

STEVE MNUCHIN, TREASURY SECRETARY: The unemployment rate is not real.

TRUMP: The unemployment number, as you know, is totally fiction.

ALESCI (voice-over): Comments like those have data crunchers on edge.

ROBERT RUBIN, FORMER TREASURY SECRETARY: There is a real challenge in today's environment and I think a real risk, maybe even danger, that there will be efforts to influence data for political reasons, for tactical reasons, for ideological reasons.

ALESCI: And these headlines over the past few weeks have some people concerned.

RUBIN: We now have an environment in Washington in which there seem to be some reasonable number of people who would like to fit the facts to their policies rather than starting with the facts and from the facts deriving their policies and that is an immense threat to sound public policies in the United States.

ALESCI: Protecting the integrity of government data has become a hot topic in the nation's capital like at a recent panel hosted by the conservative American Enterprise Institute and the liberal Hamilton Project. ARTHUR BROOKS, PRESIDENT, AMERICAN ENTERPRISE INSTITUTE: The

conference on government statistics more popular than the Rolling Stones.

(LAUGHTER)

BROOKS: But let's face it, the phrase alternative facts has entered the American lexicon, is anything more important?

TORSTEN SLOK, CHIEF INTERNATIONAL ECONOMIST, DEUTSCHE BANK: The U.S. has always been the gold standard and we've known for a long time we have tremendous data.

ALESCI: And that tremendous data drives tremendous dollars. Unemployment stats trigger unemployment insurance. The consumer price index determines Social Security checks. And the Census Bureau says its ongoing American community survey guides more than $400 billion in federal funding every year.

REBECCA BLANK, FORMER ACTING COMMERCE SECRETARY: So, they're literally tens if not hundreds of billions of dollars that are driven by these data.

ALESCI: That survey is mandatory. A bill sponsored by some House Republicans would make it voluntary. They argued the data collection is a privacy intrusion by the federal government, but making it optional could degrade the quality of the information.

BLANK: If we lose the ACS, I don't know how a lot of local governments make decisions.

ALESCI: The White House is downplaying these data concerns. It tells CNN, the unemployment rate is, quote, "one of many measures we use to evaluate the health of our economy and jobs market."

And on calculating the trade deficit, the White House says it merely wants to get to the bottom of the data swamp and negotiate great deals.

But for people who care about data integrity, they don't consider the numbers a swamp.

RUBIN: We have had tremendous advantage in this country because of the credibility of our data and the credibility of our policies because they were based on sound data. If we were to sacrifice that, I think we pay a tremendous cost.

(END VIDEOTAPE)

ALESCI: So, Jim, government data crunchers are also worried about the Trump administration cutting their budgets. Surprisingly little federal money actually goes into data collection as it is. It represents less than 1/5 of 1 percent of the federal budget according to AEI and the Hamilton Project -- Jim.

ACOSTA: Cristina Alesci, thank you for the real look at the real numbers.

The White House explaining why reporters aren't traveling with the secretary of state to Asia next week, because it costs too much? Perhaps it's the charter cheese. That's next.

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