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What Trump's Returns Do and Don't Reveal; GOP Health Care Struggle; U.S. Concerned Putin Interfering in Libya; "First Four" Gets Heated. Aired 5-5:30a ET

Aired March 15, 2017 - 05:00   ET


DAVE BRIGGS, CNN ANCHOR: 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?

CHRISTINE ROMANS, CNN ANCHOR: 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.

[05:00:07] 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: Now, the question hanging over all of it is there a chance that this return was leaked by the president himself perhaps in order to draw unwelcome attention away from the Republican health care bill and the Russia connection and all of that?

CNN's Don Lemon asked the journalist who obtained the tax return.


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: 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."

That's the White House statement. For the record, it's not illegal to report the contents of a legally obtained tax return. The president promised to release the tax return himself after a conclusion of a routine audit. It remains unclear when that will be if that will ever happen. Dave thinks never.

BRIGGS: Don't hold your breath.

ROMANS: More recently aides have suggested since he won the election, he will not be releasing his returns. And voters elected him without seeing their taxes, and that will be where it stands.

BRIGGS: We talk about, is this a welcome distraction for the president? I'll go one step farther, does this help him? I mean, it projects the media story that he likes --

ROMANS: Right.

BRIGGS: -- and there's nothing in there that hurts him.

ROMANS: Well, let's look what we don't know in there. Let's look at what the pages don't display, and that's the biggest concern over his finances. Where the income comes from, the nature of his investments, and most importantly, any ties to Russia or other sovereign countries.

Those are questions that can only be answered if he releases his entire tax history. He's the first president in decades not to do so. So, what do these 2005 tax returns actually show?

Well, first, the president wrote off more than $100 million in losses in 2005 that reduced his tax bill. Remember that $90 million loss. Rolling that forward.

Of the $38 million the president paid, only $5 million was regular income tax. The rest was paid under the alternative minimum tax. The AMT, the dreaded AMT. It's an additional tax that prevents wealthy Americans from avoiding income taxes. The president wants to eliminate it.

Without it, Trump would have paid 4 percent tax rate in 2005. That's less than, of course, the bracket that poorest Americans pay.

BRIGGS: Sure. With all eyes on President Trump's tax return, there's another story at least as important if not far more 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 this House bill. This on top of members of the ultra conservative Freedom Caucus and several moderate House Republicans who are vulnerable in 2018 who all now say they won't support this bill. Several Republican senators, including Majority Leader Mitch McConnell, also now say changes need to be made to the House bill.

ROMANS: Opponents speaking out today. There's a conservative Republican rally near the capitol at 1:00 p.m. You'll hear remarks from Senators Ted Cruz and Rand Paul.

House Democrats set to have their say as well today. That's at 10:30 a.m. in a news conference. You'll see that. And the House Budget Committee has postponed its review of the bill today now to Thursday. That's going to give the White House another day for fuel court press to salvage those things.

BRIGGS: All right. Got a long way to go.

Joining us this morning from our Washington bureau, CNN politics digital managing editor, Zach Wolf.

Good morning to you, Zach.

ROMANS: Hey, Zach.


BRIGGS: As we stand right now, what is the biggest obstacle for passing this Republican health care bill?

WOLF: Nobody seems to support is a pretty big obstacle. I think you have, you know, m who don't like it because of the Medicaid issues. You have conservatives who don't like it because of, you know, because it doesn't go far enough in repealing Obamacare.

Nothing has materially changed since this came out. They haven't changed the bill. It's becoming clear that, you know, shaky support, it might be code red time for them to start thinking about what to do next.

BRIGGS: But originally, the thought was the trouble was in Senate because you could only really have two defections there. Is the real trouble that it might not get through the House? WOLF: Yes. I think right now, certainly, it is. But the problem is

if you change it so that it will pass the House, then it really is going to have even more trouble in the Senate. So, it's like trying to find this squishy middle area that you can pass something through both houses of Congress.

[05:05:02] You know, and once you change it just that tiny little bit, you start to lose those couple of moderates in the Senate. By the way, there's a couple of really conservative senators too. And they might not support it. People like we showed up there, Ted Cruz and Rand Paul, they only have a couple of people to lose in the Senate.

ROMANS: Well, we've heard from the president is there will be a phase two and phase three. We don't know what that looks like. Well, part of that will be some sort of a negotiation -- negotiating down drug prices, that this is just the beginning of this process.

I want to you listen to what Senator Tom Cotton said about this idea that this is the starting block here.


SEN. TOM COTTON (R), ARKANSAS: There is no three-step plan. That is just political talk. It's just politicians engaging in spin.

If we had those Democratic votes, we wouldn't be three steps. We would just be doing that right now on this legislation all together. That's why it's go important that we get this legislation right.


ROMANS: You know, Sean Spicer said this is the only vehicle. This is it. Use this.

The president said, you know, this is the beginning of a negotiation. Which is it?

WOLF: Well, you know, OK, and this is where it gets really complicated. The first step, they want to do it through the budget reconciliation rules. Those only take 50 votes.

And I think it's really important for them, they have to get the first part to start getting those other parts. And that's going to be even harder as Tom Cotton said, when you're not using budget consideration information the later, you know, iterations of this bill, that's when you start to need Democratic support when it has to be bipartisan to pass through this very divided Congress. Doing this bit right now is so important, so that they can get started on those other parts.

BRIGGS: OK. A couple in the House came out yesterday saying they won't support this bill. Ileana Ros-Lehtinen among them, Rob Wittman from Virginia. But later today, some of these FreedomWorks guys will hold a rally. You're talking about Rand Paul, Ted Cruz, Mike Lee.

Do we expect that group to endorse this bill? WOLF: You know, we'll have to see on that. I mean, it certainly goes

against a lot of things they'd like. Rand Paul has been talking about the need for full repeal. He's the one who went on that goose chase around Capitol looking for the text of this bill a couple of weeks ago. It would be remarkable if he can get those guys on board, that would send a huge message.

ROMANS: All right. Let's talk about the tax thing last night, $38 million in taxes, $36.5 million in taxes if you take out the payroll, I think. A little look at 2005. Guys, I'd like to see all of it and just put this all to bed.

Interesting, Brian Fallon, the former Clinton press secretary, he said this about the big reveal, little reveal of taxes in 2005, "Dems should return focus to Trumpcare tomorrow and the millions it will leave uninsured. Not to get distracted by two pages from '05 tax return."

And the Hawaii Senator Brian Schatz said, "These people are easily distracted. That doesn't mean POTUS has some sort of master plan."

Distraction, is it a big reveal, I mean, what did "Washington Post" called it, a nothingburger?

WOLF: You know, on the other hand, we now know for the first time, I think that Donald Trump did pay some form of income tax. There was some question, because of that, you mentioned the nearly billion dollar one, did he ever pay income tax after that? Has he been paying income tax?

We now know, yes, he did. You know, it might not have been quite at the rate that some other people are paying. And there are so many unanswered questions for so many years. I mean, this is $150 million for one year. He's clearly a wealthy man. And now, we know he's paid some tax.

BRIGGS: Some are saying this is a welcome distraction, a shiny object to take attention off the healthcare, the wiretapping. Let's go one step further. Could this actually help the president add to the anti- mainstream media narrative and it shows to your point that he paid taxes?

WOLF: Yes, I think certainly it could, and depending on how they spin it, it will certainly, I think, neutralize this issue of tax returns which continues to be a Democratic talking point about him. I don't think you're going to see that again.

ROMANS: All right. Thanks so much for that. We'll talk to you soon. Come back in half an hour. Lots to go over today.

Thank you, Zach Wolf.

WOLF: Thank you.

BRIGGS: Well, back to health care if you want your answers -- questions answered about -- ROMANS: You want your answers questioned --

BRIGGS: Yes, I got that right.

Tune in to CNN tonight. That's one of the architects of this bill, Tom Price, HHSS secretary, Wolf Blitzer, Dana Bash, 9:00 Eastern Time. He has said no one will be worse off financially under this bill. Do you think that will come up?

ROMANS: We've got to be so careful.

BRIGGS: That is the statement that they will press him on tonight.

ROMANS: All right. A story that sounds all too familiar. The U.S. is concerned Russia may be meddling in a foreign conflict. Where and why it matters, we're live in Moscow, next.


[05:14:02] ROMANS: The Pentagon growing increasingly concerned about Russia interfering with Libya. U.S. aerial reconnaissance detecting Russian transport aircraft in 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 course of Libya's political future.

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

Good morning.


Well, the Russians are dismissing those records. The Kremlin spokesman Dmitry Peskov saying he has no information either on the presence of a drone or on Russian special forces in the western part of Egypt. That was reported by Reuters. The defense ministry flat out denying it, calling it a hoax.

But what we have seen in recent months is an increased level of engagement by Russia in Libya. Not only with the internationally backed government in Tripoli but perhaps most particularly with General Khalifa Haftar who led kind of rival faction out of the eastern city of Tobruk.

[05:15:04] He visited Moscow twice in 2016 and in early January, he boarded a Russian aircraft carrier, the Admiral Kuznetsov, in the Mediterranean where he spoke to official there and held a video conference with the Russian defense minister. And that is what is raising concerns in the West that Russia might be looking to prop up or install a pro-Russian leader in Libya as it has succeeded in doing with the Assad regime in Syria. The prize, of course, will be an increased presence in North Africa and increased presence on the world stage, access to Libya's ports in the Mediterranean and Libya's lucrative oil. Russia had billions in cancelled contracts during the Arab spring there, so it certainly has economic motives, as well as political motives.

But as to Russia, they say they're talking to all sides in this conflict and they simply want to see Libya stabilized to stop the spread of terror groups in that country, Christine.

ROMANS: Yes, Clare, so interesting for Russia, political and economic interests are often very same thing.

All right. Clare Sebastian for us in Moscow -- thank you so much.

BRIGGS: All right. March Madness is here. You beat me in filling out my brackets. And we had some fireworks during the firs four NCAA game last night. A star player and also New Orleans Privateer choking his own teammate. Yikes.

Coy Wire with more on this morning's "Bleacher Report," next.


[05:20:51] BRIGGS: March Madness officially tipped off last night on Turner's truTV. Two games one of them got a little heated between two teams.

ROMANS: Yes, that's unbelievable. Coy Wire has more on this morning's "Bleacher Report."

Hey, Coy.


You had Kansas State looking solid, beating Wake Forest in the 11 seed game. But the fireworks came in the matchup between 16 seed Mount St. Mary's and New Orleans. Frustration would set in for New Orleans late in the second half, Travis Thibodeaux and Christavious Gill yelling, shoving and one point, it looks as if Thibodeaux may appear to have choked his teammate. Thibodeaux was actually benched for this skirmish for the rest of the game.

But the story of the game, the smallest guy in Division I coming up huge. Mount St. Mary's Junior Robinson, just 5'5", led the way 23 points to advance his team with a one-point win for a chance to play number 1 seed Villanova in the next round.


ELIJAH LONG, MOUNT ST. MARY'S: I wouldn't have dreamed we're going to play Villanova. But, you know, dreams come true. And, you know, this is part of March Madness. So, this is part of the madness, and, you know, we're looking forward to it.


WIRE: Tonight's game on tonight Turner's truTV. I want to spotlight someone to root for. Head coach LeVelle Moton of 16th seed North Carolina Central. Three years ago, Coach Moton's son DJ was recovering in the hospital from second degree burns. Moton had to make a decision, coach his team in the NCAA tournament or stay with his son.

Well, Moton's own wife told him he need to go with his team. They needed him in the biggest moment of their lives. Listen to this.


LEVELLE MOTON, NORTH CAROLINA CENTRAL HEAD COACH: This is really my first time because I don't remember anything from that weekend. I don't remember no plays from the game. I don't remember anything.

I just felt guilt as a father saying I'm coaching a basketball game. My son is in the hospital. I always wanted to get back here for a bit of a selfish reason, just to be able to bring them ahead and experience. And I'm laying in a hotel last night, he's just running around a thousand miles an hour I can't get no sleep. And I'm like, man, why did I bring --


WIRE: North Carolina Central plays UC Davis tonight at 6:40 Eastern, followed by the 11th seed matchup between USC and Providence.

We want to show you the best thing on the Internet last night. Carmelo Anthony's fashion choices. Dave, I know you like it. It was cold in New York where his Knicks beat the Pacers, but his outfit was on fire, or maybe should have been set on fire.

Who wore it better George or Melo. All right. Slam magazine wondered if Carmelo or Leo from "The Revenant" wore it better. It look like the bear from the Revenant as well.

You also had Melo riding like Luke or Hans Solo from "The Empire Strikes Back". But, guys, he could have played a Wookiee in that one. Lots of fur. Whole bunch of fur.

BRIGGS: What do you think of the look?

ROMANS: I love it. I love it.

BRIGGS: You like it?

ROMANS: I love it. I hope it's faux. PETA won't like it if it's not faux.

BRIGGS: Good luck to Stanford, by the way, in the post season. You teased me about mine.

WIRE: Hey, I think my time's up.


ROMANS: All right. They were able to laugh afterwards, the South Korea expert whose BBC interview went viral. Remember this?

BRIGGS: Oh, yeah. ROMANS: After his two kids busted into the home office, followed by

his wife in a mad scramble to get them out of the camera shot. They are speaking publicly for the very first time. This time in a follow up interview with the BBC, the kids were welcome guests professor Robert Kelly and his wife say they were mortified at first and then they saw the humor in it.


PROF. ROBERT KELLY, BBC INTERVIEW BECAME VIRAL HIT: We've watched it multiple times, too, our families have watched as well. Everybody we know seem to think it's pretty hysterical. We understand why people find it enjoyable. Yes, it's funny, we understand that.


ROMANS: Oh my gosh. They're adorable.

He said he usually locks the door, he forgot to this time setting off what his wife described as chaos.

And he's mortified by all of this, obviously mortified at the time but he said he wants his children to feel comfortable to come to him, which I kind of thought was nice, too.

[05:25:01] BRIGGS: The second one entering the room, though.

ROMANS: Oh, I know, the little boy --

BRIGGS: Oh, the mom with the mad scramble. I've watched it 10, 12 times, it doesn't get old. Well played. It's good to know.

ROMANS: I love the dad at work moments, awesome.

All right. We've been waiting for almost two years for Donald Trump's taxes. Now that we have some at least, it looks like a bit more of a distraction than a revelation. Who decided to leak out this information?


ROMANS: Who leaked the president's tax return? That's the biggest question of many this morning after limited details leak out of a 2005 tax return. Could the White House be looking to throw reporters off course?

BRIGGS: And can the GOP's health care bill survive. More moderates coming out against the bill as the president faces new resistance from the populist wing of the party that elected him.