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GOP Health Care Bill Faces Hurdle; U.S. Anticipates New North Korea Missile Test; State Department Cuts. Aired 9:30-10a

Aired March 16, 2017 - 09:30   ET



[09:32:51] JOHN BERMAN, CNN ANCHOR: All right, good morning. I'm John Berman.

Just 30 minutes from now, the Republican bill to repeal and replace Obamacare faces a new, major hurdle, a showdown inside the House Budget Committee. This as 19 Republicans now say they are leaning against or planning to vote "no." My next guest is one of them. Joining me is Congressman Dave Brat of Virginia, who sits on the Budget Committee, congressman, which means you get to vote on this bill as it's written today.


BERMAN: And, just checking, you are a - you're a "no" vote today.

BRAT: Yes, "no" vote, yes.

BERMAN: Nothing is going to change that?

BRAT: No. We want to get to a "yes." The major issue we have today on the front page of "The National Journal," both the right and the left policy experts concede that this plan still has too many elements of Obamacare in it at the structural level, right? You have the federal government running health care for 300 million people. As a free market economist, I could get sued for malpractice if I did vote for this thing. We have people are serious health care concerns that we need to block off. They're uninsurable. They have pre-existing conditions. And that is separable from the insurance problem we have.

But both of the policy experts on the right and the left concede the idea that the individual market is still an Obamacare market. And what we have to do is put bucket two, which deals with the insurance regulations, that's the main cost driver, we have to put that in the bill. It can't just be left to Secretary Price because then you'll have dueling presidencies. Every four years you're going to change the health care system, right? You have to put it into law, bring down the cost. That's what Trump wants. He wants to bend the cost curve down and allow people to shop across the state lines. That can't happen right now with the insurance regulations because you can only shop across lines for socialist products, right? If - if a young person can't go out and buy a cheap policy, it's unavailable, that's -

BERMAN: Well, all right, all right, I mean I understand what you're saying there.

BRAT: Yes.

BERMAN: You call them socialist products, I think that's what you're referring to is Obamacare.

BRAT: Right. Right.

BERMAN: Let the record show, that is your opinion. I think other people will not call them socialist products. But -

BRAT: Yes.

BERMAN: But to your point, you're actually talking about the second step that Paul Ryan is talking about, putting it in step one, which I'm not sure he's inclined to do. Representative Garrett, your colleague, yesterday said that he doesn't think there are the votes to pass this in the House at all. Do you think that there are changes that can be made in the next week? Paul Ryan wants to bring this to the floor in the next week.

[09:35:17] BRAT: Yes. Yes.

BERMAN: There are changes that can be made in the next week to get this through the House of Representatives?

BRAT: Yes, well, that is the change, right? But now there are not the votes. The base, every conservative think tank, every conservative group has come out against the bill because it retains too much of Obamacare. So the solution is to get rid of the insurance regs - we got rid of one reg in the plan, which is great. We got rid of the bronze, silver, platinum, and that accounts for the CBO score of a 10 percent price reduction. If you got rid of the rest of them, the cost curve is going up by 25 percent right now. So if you go down ten, you're still up 15. That's not good enough. That makes the system insolvent and everything the federal government touches is insolvent. Medicare is insolvent in 2034.

BERMAN: Just to be clear -

BRAT: Social Security is insolvent. And we have $100 trillion in unfunded liabilities. Do you want more federal government or less.

BERMAN: There are members - there are members of your own party who are concerned with a different part of the CBO report -

BRAT: Yes.

BERMAN: The part that says that 24 million Americans will not have insurance who do now in ten years.

BRAT: Right.

BERMAN: Does that, in and of itself, concern you?

BRAT: Ys, it does concern me. If you have a free market system, the score actually comes out better, believe it or not. And that part hasn't been reported on. And the folks on the moderate side are on - they're not fulfilling the promise. Trump and all of us promised six years ago we were just going to repeal Obamacare. There wasn't even a replacement. And then the language shifted, maybe a couple years later, we're going to repeal and replace it with free market solutions. Big government, federally run health care is not a free market solution.

BERMAN: Congressman -

BRAT: And Paul Ryan knows that. He's a - he's a high-ex (ph) scholar. And the famous book is "The Fatal Conceit." "The Fatal Conceit" is to think our finite human minds can manage a system for 300 million people that vary from Texas to California. It's impossible. We need to return to it the states and to the individuals.

BERMAN: Well - well, congressman -

BRAT: Yes.

BERMAN: As someone who speaks with experience about finite human minds, I, you know, I appreciate the last comment.

Congressman, the Budget Committee, it would take four votes to block this in the Budget Committee today.

BRAT: Right.

BERMAN: Are there four votes today to block it?

BRAT: It's going to be close. They're still making up their minds on it as the evidence still is pouring in, right? We've have a week to process the text. It's not long enough. And so that's part of the issue.

BERMAN: And second question, who's being more helpful to you in moving forward, your points here -

BRAT: Yes.

BERMAN: Speaker Ryan or President Trump?

BRAT: Well, they're both showing some flexibility right now, right? And it's not personal. It's just policy. Paul Ryan's a free market guy, but he's in a tough spot. He's trying to get this through with a major package. But he is a free market guy. And Trump has been flexible from the outset. He's a business guy. He wants shopping across state lines and to bend the cost curve down. That's the major things he wants. It won't happen in this plan. You cannot shop across state lines in this plan. That's why putting bucket two -

BERMAN: You can't, no.

BRAT: Ys, the insurance piece is essential, right? And then the young people and senior citizens, and it gets complex, right, but it - BERMAN: The over state lines, though, the over state lines, you know, Speaker Ryan doesn't think that can be part of this during reconciliation. That's part of the issue, isn't it?

BRAT: Yes, well - and that's not true. Go talk to Harvard scholar Ted Cruz, right, Harvard Law, the parliamentarian will rule on that. And if you have Vice President Pence in the chair, he can say, thank you for your counsel, let's vote. And 51 votes in the Senate put it through. So it's - the Senate, you know, is kind of a - the slower moving body. They're having tea over there and - they get nervous about these kind of things, right? But this is managing one-fifth of the economy. To put the TV cameras on them over there with the parliamentarian live, and I think you'll find a - we can move it through because the only issue there is, does it have a budget impact?

BERMAN: All right.

BRAT: Yes, getting rid of insurance regs. Do you think that has a budget impact? Yes, it's in the tens of billions of dollars. It's huge.

BERMAN: Congressman - Congressman Dave Brat accusing your Senate colleagues of drinking tea, knowing no bounds in negative campaigning.

BRAT: I know.

BERMAN: Congressman, thanks so much for being with us. I do appreciate it.

BRAT: Hey, you bet. Any time. Thanks, man.

BERMAN: All right, America's top diplomat in Japan. His first, big overseas trip. He holds his first, big overseas news conference. And what does he say? He says North Korea policy is a failure and the United States should cut funding to its own State Department.


[09:43:46] BERMAN: All right, this just in. CNN has learned that U.S. intelligence and the Defense Department expect North Korea to begin another round of missile and nuclear testing any day now. And this comes as Secretary of State Rex Tillerson is doing his first Asia trip. He is in Tokyo.

CNN's Will Ripley is there.

Will, this certainly, you know, casts appall, I think, over this whole trip. And North Korea has been a big topic for the secretary.

WILL RIPLEY, CNN CORRESPONDENT: It has been. And, in fact, Secretary Tillerson said what much of the world already knows, that the United States and the global community needs a new approach - a new approach when it comes to North Korea because, as he put it, the efforts of the last three U.S. administrations have been an abysmal failure. Listen.

(BEGIN VIDEO CLIP) REX TILLERSON, SECRETARY OF STATE: The diplomatic and other efforts of the past 20 years to bring North Korea to a point of denuclearization have failed. So we have 20 years of failed approach.


RIPLEY: What we did not get from Secretary Tillerson at this press conference, specifics. Will there be sanctions against Chinese companies that do business with North Korea? Will there be an Iran- style approach, a more global approach as opposed to regional. No specifics from the secretary, John.

[09:45:00] BERMAN: (INAUDIBLE) in terms of the U.S. commitment to its Asian allies?

RIPLEY: Certainly reiterating support of Japan, support of South Korea, which is something that both of those countries wanted to hear. Also saying that all three countries, the U.S., Japan and South Korea, need to work together more closely. They need to cooperate, put any regional historical squabbles aside and try to focus on the bigger picture, which is the threat from Pyongyang.

BERMAN: You know, and then the secretary of state runs a department that the president of the United States wants to cut funding to. How did he respond to that news today?

RIPLEY: He called it a challenge that he said he was happy to accept. And he definitely sounded more like a CEO at this point because he said that he's going to have the men and women of the State Department work together to try to analyze where they can cut more than a quarter of their budget. Take a listen.


REX TILLERSON, SECRETARY OF STATE: The State Department is coming off an historically high level of budgetary resources in the 2017 budget. The level of spending that the State Department has been undertaking in the past - in particular in this past year is simply not sustainable.


RIPLEY: And so he said what many in corporate America have heard time and time again, John, that the people of the State Department will have to figure out how to do more with fewer dollars.

BERMAN: All right, Will Ripley for us in Tokyo. Thanks so much, Will.

You know who came out against certain cuts to the State Department a few years ago? The current secretary of defense. We're going to discuss the controversy over State Department funding. Does it put America at risk? That's next.


[09:51:01] BERMAN: New this morning, the White House unveiled its first budget plan. It includes huge cuts to the State Department, slashing 28 percent for diplomacy and foreign aid. State of Secretary Rex Tillerson supports the plan, saying the department can essentially do more with less and should. But not everyone agrees with the president's strategy, including maybe the 2013 version of secretary of defense, James Mattis, who was a Marine Corps general then. Listen to what he said.


GENERAL JAMES MATTIS, DEFENSE SECRETARY: If you don't fund the State Department fully, then I need to buy more ammunition, ultimately. So I think the - it's a cost/benefit ratio. The more that we put into the State Department's diplomacy, hopefully the less we have to put into a military budget if we deal with the outcome of an apparent American withdrawal from the international scene.


BERMAN: All right, joining us now to discuss more, brigadier general and author of "The Siege," Tony Tata.

Thanks so much for joining us, General.

You heard General Mattis just there in 2013. We don't know where he stands today on the State Department cuts, but in 2013 he basically warned against cutting the State Department too much. You've been overseas. These State Department functions, USAID, these things that you see over there, how important are they?

BRIG. GEN. ANTHONY TATA, U.S. ARMY (RET.): They're critically important, John. They're right there by you on the battlefield and sometimes they're out there by themselves. These USAID workers in particular are in areas that you necessarily can't get to or won't be and sometimes they're holding down a population, and they're engaging in a population that, you know, you are not able to engage as a military force.

But, you know, this is about budgets. And budgets are tough calls. And the president has been very clear about where he wants to emphasize, and it's in defense. And so this is a part of soft power. And you talked about elements of national power. You've got diplomatic power. You've got information power. You've got economic power. So this would fall into diplomatic power, how we can coerce a population and engage a population and hold in a supporting effort a population while the military engages in the major effort, the primary effort that's going on.

BERMAN: And it's important to know, general, you've worked in the military, you've also worked in government, state government in North Carolina, so you know there are choices that have to be made. The question right now, is it the right choice, is it the best choice. More than 50 percent of funding the U.N. programs - U.N. programs will get slashed, peacekeeping, the World Food Program, U.N. refugee operations would feel the impact here. Again, it's a choice.

TATA: It's a choice, right. BERMAN: And the president will depend it, no doubt. But what message

does this send perhaps to countries overseas?

TATA: Well, I think the - there are a couple of messages it sends. One is that, you know, is the U.N. as effective as it ought to be? Even USAID knows that they can do a better job of monitoring themselves and evaluating themselves on effectiveness. What is the ultimate output? And I think that's what the president's getting at here, how much output are we getting for the money that we're putting in.

The second is, you know, you heard him talk about NATO and other U.N. countries needing to pony up, cowboy up more. Well, this might be a signal that, OK, you know, if you can't put more on the battlefield, how about putting more into this bucket, and we're going to trim our sails a little bit on the USAID and the larger funding of humanitarian programs, and so U.N., you know, OSCE and all these collective security arrangements, why don't you put a little more money into that, and that could be the tradeoff here.

BERMAN: Now, I know you haven't had a chance to dig in - into the numbers yet. We only really did get a skinny budget -

TATA: Right.

BERMAN: As it's called.

TATA: Yes.

BERMAN: So there isn't much to look at there. But the headline, 28 percent. When you first saw that, does that seem like a reasonable or a tough number (INAUDIBLE)?

TATA: Well, when you look at the overall budget we have, John, it - there - it's got to come from there or a few other places. And when you look at the scale of where he's putting money, it's in defense programs and veterans programs, what he said he would do on the campaign trail, and he's trimming money from the EPA, and USAID, and the State Department, and that's really no surprise. And so I expected a number of about 25 percent.

[09:55:08] BERMAN: But just to be clear, last question, General Mattis, when he says it - implied it would make commanders' jobs harder overseas.

TATA: Well, you know, he's coming of - fresh off the battlefield in that interview and so for me, if I've got more civil military guys, maybe I can do a little bit more with that money. And so it depends on where that money flows.

BERMAN: General Tony Tata, great to have you with us. Thanks so much. Appreciate your insights.

TATA: Great to be here, John. Thanks.

BERMAN: All right, support for the Republican health care bill very much in question. In just moments, a new debate begins inside the House Budget Committee. This thing could die today in the budget committee if four Republicans vote against it. We just talked to one Republican in that committee who is voting against it. House Speaker Paul Ryan, he'll hold a news conference in just a few minutes. The big question for him is, what changes is he willing to make? We know - we may know within a few minutes. Stay tuned.


[10:00:12] BERMAN: All right, good morning, everyone. I'm John Berman.