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Trump's 2005 Tax Return Revealed; GOP Health Care Struggle; U.S. Concerned Putin Interfering in Libya; Dutch Voters Cast Ballots Today. Aired 4:30-5a ET

Aired March 15, 2017 - 04:30   ET



[04:30:34] DAVE BRIGGS, CNN ANCHOR: Who leaked the president's tax returns? That's the biggest question of any questions this morning, after limited details leaked out. Could the White House just be looking to throw reporters off course?

CHRISTINE ROMANS, CNN ANCHOR: And can the GOP's health care bill survive? More moderates coming out against this bill, as the president faces new resistance from the populist wing of the party that elected him.

Good morning, everyone. Lots to get to today. Welcome back to EARLY START. I'm Christine Romans.

It's a snow day for the news.

BRIGGS: But if there are snow days for our children.


BRIGGS: Lots on the East coast.

I'm Dave Briggs. Good morning, everybody, 4:30 a.m. Eastern Time.

Overnight, the big Trump tax release turned out to be something closer to the Trump tax distraction.

The White House confirming a report that Donald Trump 2005 tax return showed $38 million in taxes paid on more than $150 million in income. The White House releasing the figures after MSNBC's Rachel Maddow teased a major scoop. She brought on journalist David Cay Johnston who said an anonymous source actually left the first two pages of Mr. Trump's return in his mailbox.

In the end, Maddow's report was widely criticized as overhyped and a disappointment, with the top line figures of earnings and taxes paid. There are still far more questions than answers.

ROMANS: And the question hanging over all of it, is there a chance this return was leaked by Mr. Trump himself, perhaps to draw unwelcome attention away from the Republican health care bill and the Russian question?

It's a question CNN's Don Lemon pondered. He asked the journalist who obtained the tax returns.


DON LEMON, CNN ANCHOR: Do you think it's possible that he could have sent them to you?

DAVID CAY JOHNSTON, JOURNALIST RECEIVED TRUMP TAX RETURNS: Oh, absolutely. Donald has a long history of leaking information about himself. And he doesn't think quite like most of us do. He doesn't have the sort of framework of what makes him look good or look bad that the rest of us have.


ROMANS: So, the White House took aim at the messenger saying this, "You know you are desperate for ratings when you're willing to violate the law to push a story about two pages of tax returns from over a decade ago."

Now, you know, we looked into this. For the record, it's not illegal to report the contents of an illegally obtained tax return. And Mr. Trump promised to release his tax returns himself after the conclusion of a routine audit. It remains unclear when that will be or if he will really honor that promise.

More recently, aides have suggested since he won the election he will not be releasing his tax returns. But, certainly, this president is holding himself up to a different standard than every elected official in modern history.

So, what these pages don't display are the biggest concerns over the president's finances, where his income comes from, the nature of his investments and more importantly, any financial ties to Russia or other sovereign governments.

So, what do these 2005 tax returns show? First, the president wrote off more than $100 million in losses that year. The $38 million, the president paid, $5 million was regular income. The rest was paid under the alternative minimum tax. It's an additional tax that prevents wealthy Americans from avoiding income taxes and the president wants to eliminate it.

Without it, Trump would have paid a 4 percent tax rate in 2005. That's less than what the poorest Americans pay.

BRIGGS: But no real shocker here in what we've learned?

ROMANS: No real shocker, but you wonder if it's a distraction on purpose to change the top story --

BRIGGS: Shiny object, look over here, don't look over here.

Well, with all eyes on President Trump's tax returns, there's certainly another story at least as important on Capitol Hill. New Republican defections are making the road to passage even rougher for the House health care bill.

"The Washington Post" reporting overnight that conservative populists loyal to President Trump are urging him to ditch his support for the House bill. This on top of members of the ultra conservative Freedom Caucus and several moderate House Republicans vulnerable in 2018 who all now say they won't support this bill. Several Republican senators, including Majority Leader Mitch McConnell also say changes need to be made to the House bill.

ROMANS: OK. We're going to hear a lot about this today. Opponents speaking out today, there's a conservative Republican rally near the Capitol. That's at 1:00 p.m. That will feature remarks from Senators Ted Cruz and Rand Paul.

House Democrats said to have there say at a 10:30 a.m. news conference this morning. The House Budget Committee has postponed its review of the bill from today to Thursday now. That will give the White House more time for its full court press to salvage this bill.

For the very latest, let's bring in CNN's Phil Mattingly. He's in Capitol Hill for us.


[04:35:01] PHIL MATTINGLY, CNN CONGRESSIONAL CORRESPONDENT: Dave and Christine, the fallout from those damaging CBO numbers only serving to continue on Capitol Hill for a second day. The reality as House GOP leaders look across the playing field right now is they've got significant problems really on both sides of the ideological spectrum. They have conservatives who've been very boisterous about their concerns about this bill. Now, they need to worry about moderates. Those moderates who that coverage number could pose very real political difficulty for them going forward.

The reality remains this, House GOP leaders not planning any major changes for this bill, despite what you heard from some White House officials. It's a reality that was kind of underscored by Press Secretary Sean Spicer. Take a listen.

SEAN SPICER, WHITE HOUSE PRESS SECRETARY: This is the only vehicle that seeks to achieve what people on our side of the aisle have been talking about since 2010. This is it, if we don't get this through, the goal of repealing Obamacare and instituting a system that will be patient-centered is going to be unbelievably difficult.

MATTINGLY: And, guys, really, that's kind of the underscored selling point here. This is the bill, this is the moment, this is what you campaigned on for cycle after cycle after cycle. If you missed this opportunity, it goes away. There's no second changes. There's no alternative bills that are in the works right now. Everybody needs to get behind this bill.

But I can't stress enough, the idea that the White House has perhaps been freelancing and negotiating with conservatives, they're saying frankly that if there's any negotiation at all on this House bill, it's become very frustrating to House leaders, sources tell me, as they recognize that their strategy, their bill itself was agreed upon by the White House a couple weeks ago. Any divergence from those agreements, at least according to House leadership sources, that causes problems -- Dave and Christine.


ROMANS: All right. Phil Mattingly, thanks for that.

Tension really building here in this fight to overhaul Obamacare. Republican Senator Lisa Murkowski of Alaska has already said publicly she has concerns about her party's health care replacement plan.

Listen to her reaction when CNN's Manu Raju asked her where she stands.


MANU RAJU, CNN SENIOR CONGRESSIONAL REPORTER: Do you support that House health care bill --

SEN. LISA MURKOWSKI (R), ALASKA: Give a minute to get to my constituents, please.

RAJU: It's a yes or no, do you support the House health care bill?

MURKOWSKI: Would you please respect --


MURKOWSKI: We've been in there for two hours. Come on.


ROMANS: Senator Murkowski is considered a critical swing vote on health care reform. Clearly, she didn't want to answer.

You know, it's not unusual to be chasing someone down in the halls of Congress and just ignore you. But she went beyond ignoring, she came back and gave him a little bit of a talking to.

BRIGGS: I'll give her a pass. They have some long days.

If you want some questions answered about the health care bill, be sure to join us tonight for what promises to be a very interesting discussion with Health Secretary Tom Price who joins CNN's Wolf Blitzer and Dana Bash for a live town hall. What's next for the new bill and tens of millions who will be faced with new health care decisions? Join us tonight, 9:00, only on CNN.

ROMANS: It should be good.

BRIGGS: Yes, it should be very interesting. Some of his remarks will come back. We could find out in a matter of hours whether the FBI's investigating

ties between the Trump campaign and Russia. Rhode Island Democratic Senator Sheldon Whitehouse says FBI Director James Comey promised to tell him and Republican colleague Lindsey Graham by today. The two are leading one of three congressional investigations into Russia's interference in the election. It's not clear whether Comey plans to announce anything publicly.

CNN has also learned the Senate Intelligence Committee plans to launch a public hearing on Russia later this month. A House Intel hearing on Russia starts Monday. Lindsey Graham on NEW DAY later this morning.

ROMANS: All right. President Trump is extremely confident evidence exists to prove his claim that he was wiretapped by former President Barack Obama. White House spokesman Sean Spicer says the evidence will vindicate the president. Democrats don't buy it at all. Congressman Steny Hoyer of Maryland calling the president's allegation untrue and an alternative fact made up in his own head. Hoyer says if there were proof, all of the U.S. would have seen it by now.

BRIGGS: President Trump heading out on the road. He'll be attending an auto rally in Detroit today and is expected to announce a new review of auto industry regulations. That review could open the door to less stringent controls on carbon dioxide emissions and fuel efficiency requirements. Mr. Trump ends his day with a rally in Nashville.

ROMANS: And we know how those energize him, you know? How he likes to have those --

BRIGGS: That is his oxygen.

ROMANS: Yes, exactly. So, that will be interesting to watch.

The president's new six-nation travel ban facing three new legal challenges in federal court today ahead of its implementation tomorrow. Yes, this ban is supposed to go live tomorrow. A challenge brought by refugee aid groups in Maryland, along with challenges from the state of Hawaii and four families in Seattle. Those will all be heard today.

The Seattle challenges will be heard by Judge James Robart, the same judge who brought the administration's first travel ban. The judge is also expected to set a hearing to determine what are the legal decisions that halted the original ban extend to this new one.

[04:40:07] Five other states have joined Washington state and Minnesota in that legal challenge.

BRIGGS: Well, budget cuts at the Environmental Protection Agency may be more significant than originally reported. According to a close source of the EPA, the cuts might be deeper than 25 percent. A number that one EPA official called, quote, "devastating". The cuts could include grants to states to protect air, water and land and lead to layoffs for military veterans and contractors who work for the agency.

CNN's requested comments from the EPA and the White House, neither has yet responded.

ROMANS: All right. Time for an early start on your money.

An East Coast blizzard couldn't stop the two-day Fed meeting and it may be time to get ready for another hike in interest rates. The Federal Reserve is expected to raise interest rates later today, the second time in three months. If so, the central bank thinks the American economy can handle it encouraged by strong job gains and rising inflation.

A rate hike will not be a surprise to Wall Street and it's already priced this into financial markets. What investors will look for is a schedule, how many times did the Fed raise rates this year and how quickly. The Fed has only raised rights two times since 2015. Before that, it took almost ten years for the Feds to give the rates a bump.

All eyes will be on Fed Chair Janet Yellen to say if she says anything about the president's financial policies. In the past, she has pushed back against Trump's plans to dismantle Dodd-Frank, the financial regulatory reform.

Well, what does a rate hike mean for you? A reminder here -- higher interest rates mean higher borrowing costs. So, millions of you can expect to pay a bit more on credit cards, new car loans, new mortgages.

But this is good news for savers. A bump on interest rates means more interests on savings account, still very, very well. But, you know, when you've had the interest rates for so long. It's been oxygen for some investors.


ROMANS: It's been so good for the 1 percent, for banks. It's not been good for regular people who have money in savings accounts. So, I'm looking for some relief for them.

BRIGGS: And we're talking about two, maybe three over the course of the year.

ROMANS: Yes, I think so. Yes.

BRIGGS: All right. Well, the U.S. is concerned that Russia may be meddling beyond its borders. Once again, we're live in Moscow with details, next.


[04:46:21] BRIGGS: The Pentagon growing increasingly concerned about Russia interfering in Libya. U.S. aerial reconnaissance detecting Russian transport aircraft and a large drone at an air base in western Egypt close to the Libyan border. One U.S. general testifying he believes the Kremlin is trying to determine the political course of Libya.

Let's go live to Moscow and bring in CNN's Clare Sebastian for the latest developments.

Good morning to you.

What is the Russian reaction here?


The Russians are denying this. The Kremlin spokesman Dmitri Peskov saying he has no word of a drone on the Egyptian border near Libya or of Russian special forces as was reported earlier by Reuters. The defense minister is flat out denying this, calling it a hoax.

But the Kremlin also saying that there have been contacts with Libya and it does want the situation in that country stabilized. Now, as for those contacts the ones that have sparked particular attention are not those with the internationally backed government in Tripoli but those with Khalifa Haftar who heads a rivalry administration out of Libyan city of Tobruk. He has visited Moscow twice in 2016. He also boarded a Russian carrier, the Admiral Kuznetsov, in the Mediterranean in January and held a video conference there with Russian defense minister Sergei Shoygu.

Now, why is this causing concerns perhaps or attention in the West? Well, there are fears that Russia may be trying to install or prop up another pro-Russian ally, as it has done in Syria, and perhaps cement its sphere of influence in the Mediterranean, moving from the Middle East into North Africa.

The Russians say that is not the case. They are not trying to intervene. They simply want to see the situation in Libya stabilize, to stop the spread of terror in that region. But that is why there is a cause for concern.

BRIGGS: Appreciate the live report. Keep us up to date.

ROMANS: All right. Secretary of State Rex Tillerson arrives in Tokyo this morning. The North Korean missile threat is at the top of the agenda in his meetings with Japanese officials. He will also discuss U.S. economic and security interests in the region. The meetings come as U.S., Japan and South Korea are conducting naval drills in the area, where the North launched missiles last week. The exercises are designed to improve shoot-down capabilities against missiles.

Tillerson will also visit South Korea and China on his first Asian trip. Again, I've got to point out he's not traveling with a press corps which caused a big dustup in Washington.

BRIGGS: Heard so long from State throughout his Trump presidency.

ROMANS: Yes. So, no traveling press corps -- official traveling press corps but on commercial flights, reporters are meeting him on every stop.

All right. The alleged hackers behind the massive Yahoo hack will soon be revealed. We'll get a check in on the CNN Money Stream, next. (COMMERCIAL BREAK)

[04:53:36] ROMANS: Voters heading to the polls in the Netherlands today in what seems to be the first of several elections testing the populist sentiment in Europe this year. Immigration and the continued membership in the European Union have been some of the big issues in the campaign to elect a new parliament. It comes amidst growing tensions with Turkey serving as a backdrop.

CNN's Atika Shubert is live in the Netherlands as voting gets underway.

And, Atika, you've been saying and telling us that the economy one of the top issues, and immigration for so many of these voters, they say at least. But the economy has been doing well. There's a nationalism that's been fuelling this.

ATIKA SHUBERT, CNN INTERNATIONAL CORRESPONDENT: Absolutely. And this is really a point of debate that's been started many years ago by Geert Wilders. He's the far right candidate of the Freedom Party. I actually had a chance to speak to him last week.

And he told me, listen, even if I lose the seats, I actually have already won the election simply because everyone is talking about immigration, identity, what does it mean to be Dutch and to have traditional Dutch values. So, for him, clearly, this is already a win.

But that doesn't mean these going to the most votes. This is a very fragmented election. In fact, just to show you, on here, what is not exactly the ballot but it's pretty close to it, 28 parties are contesting these elections.

So, the ballot is similar to this size. Voters will have to mark it with a red pencil and then fold it up like an accordion to put it in the ballot box.

[04:55:02] So, either which way, there will be a coalition government simply because it's very unlikely that any majority party will get a majority of the votes. In fact, the last time that happened it was 1891.

So, no matter what there will be a lot of horse trading after this election.

ROMANS: No matter what, clearly.

All right. Thanks so much, Atika Shubert. Keep us posted.

BRIGGS: Five deaths now blamed on the nor'easter that slammed the Northeast, but the snowfall and strong winds are not over for some areas. Storm easier than expected in major cities like Philadelphia, Washington, and certainly here in New York. But smaller ones like Binghamton, New York, were buried.

Can you spot the car on snow, Romans? ROMANS: Oh my goodness.

BRIGGS: You can see the mirror I think.

ROMANS: Left mirror.

BRIGGS: Record-breaking snow totals almost 30 inches there with more expected today.

ROMANS: The snow, the wind, the sleet making a mess in Pennsylvania. This downed tree crushed a car. Oh. And the car spun out as cameras were rolling in Boston.

Amtrak will now operate modified service today between Boston and D.C. nearly 1,000 flights cancelled. Folks, really check before you head to the airport. A total of 9,000 flights cancelled since Monday. Schools in Boston still closed today. Schools in some of the New York suburbs like mine closed today, too.

BRIGGS: And New Jersey and Connecticut as well.

Well, they were able to laugh afterwards. The South Korea expert --

ROMANS: I love this story.

BRIGGS: -- whose BBC interview went viral after his two toddlers busted into his home office followed by his wife in a mad scramble to retrieve them speaking publicly for the first time.

ROMANS: See that boy coming around the corner.

BRIGGS: That's my favorite part without a doubt.

This time in a follow-up interview with the BBC, the kids were welcomed guests. Professor Robert Kelly and his wife say they were mortified at first then found the humor.


PROF. ROBERT KELLY, BBC INTERVIEW BECAME VIRAL HIT: We watched it multiple times too. Our families have watched as well. Everybody we know seems to think it's pretty hysterical. Yes.

So, we understand why people find it enjoyable catching a regular family off guard and stuff. So, yes, it was -- it's funny, we understand that.


BRIGGS: Do you? Do you? Laugh for a moment, it was hysterical. Kelly says he usually locks the door that would be a good plan but forgot this time, setting off what his wife described as chaos. One of the great moments of the year.

ROMANS: His wife and the kids are in the other room. She says she was taping the broadcast with her phone. So, she is focused on taking a broadcast on the phone. And there's a delay, a satellite delay. And suddenly, she's taping the broadcast and she sees her kids on the thing she's taping and she flipped out. I think it's so cute. It's adorable.

BRIGGS: I had this happen, made quite that camera appearance, I was talking sports business and I left my 5-year-old walking around the set.

ROMANS: Oh, my gosh.

BRIGGS: McDonald's didn't work.

ROMANS: I took my three kids into a tracking booth for the radio once. They had to be escorted out. They couldn't be quiet. It was crazy.

BRIGGS: It was a great moment.

ROMANS: All right. Let's get a check on CNN Money Stream this morning. Global markets mostly higher after U.S. markets closed lower yesterday. The Federal Reserve is expected to raise interest rates later today. That is the big story. This will be the second time in three months investors are awaiting that announcement at 2:00 p.m. Eastern.

Oil prices also hit a three-month low, dragging down energy stocks. Right now, futures this morning are a little bit higher.

The Department of Justice will announce charges today against hackers with ties to Russia who investigators believe were behind the hacking of hundreds of millions of Yahoo accounts. That's according to a lot of source who would not say if the breach was connected to the Russian government.

Hackers stole data that included names, e-mail addresses, passwords. They didn't get financial information. Yahoo announced last year it had be breached at least twice. The Yahoo hack would be the latest cyber attack that U.S. authorities have blamed on Russia, or at least tied back to Russia.

BRIGGS: That have many implication on there --

ROMANS: I don't know, lots to see.

BRIGGS: OK, we shall see.

Well, EARLY START continues right now.


BRIGGS: It's the long-awaited Trump tax reveal. Sort of. Figures from the president's 2005 tax return leaked out but it contains two answers, the most critical questions. The most critical, who leaked them?

ROMANS: And the president now facing health care resistance, and the lawmakers he's counting on to get this bill passed. Can the bill survive as pressure mounts for changes while the House speaker refuses to budge?

All right. Good morning, everybody. Welcome to EARLY START. I'm Christine Romans.

BRIGGS: And I'm Dave Briggs. It's Wednesday, March 14th, 5:00 a.m. in the East.

I think the big thing to watch today is Trump rally in Nashville. We'll get into it later. But does he really own this health care plan? Does he really sale how Obamacare is failing or does he kind of label it Paul Ryan's plan?

ROMANS: I know, that's --

BRIGGS: It should be interesting.

Overnight, the big Trump tax release turned out to be something closer to the Trump tax distraction. The White House confirming report that Donald Trump's 2005 tax returns showed $38 million in taxes paid, and more than $150 million in income.