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EARLY START

White House Defends Wiretap Claims; Budget Facing Harsh Criticism; Republican Health Care Plan in Jeopardy?; Tillerson Visits South Korea; Trump Hosting Merkel at White House. Aired 4:30-5a ET

Aired March 17, 2017 - 04:30   ET

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


(BEGIN VIDEO CLIP)

SEAN SPICER, WHITE HOUSE PRESS SECRETARY: You're mischaracterizing what happened today. Where was your passion and where was your concerned when they all said that there's no connection to Russia? Where was it then?

(END VIDEO CLIP)

CHRISTINE ROMANS, CNN ANCHOR: A press he briefing for the ages. A defiant and combative White House defends the president's wiretapping claims, despite the fact that bipartisan members of the Senate Intel Committee say there is just no evidence.

DAVE BRIGGS, CNN ANCHOR: And some of the White House budget proposals hitting some of the most needy where it hurts.

[04:30:02] But despite the backlash, the White House is standing by its case.

ROMANS: And then there is the health care overhaul. A growing number of House Republicans oppose the GOP health plan, a critical moment now for Speaker Ryan who may have already lost more support he can handle to pass the bill.

Welcome back to EARLY START on this St. Patrick's Day. I'm Christine Romans.

BRIGGS: Though you wouldn't see it expect for your green pen. I'm Dave Briggs, everybody. Forty-thirty Eastern Time.

The White House lashing out on all sides, defending President Trump's unfounded wiretapping accusations. The most combative stance yet, unleashed in a White House press briefing for the ages. Press Secretary Sean Spicer pushing back hard against reporters, quoting the House speaker and congressional intelligence leaders who all say there is no evidence President Obama ordered a wiretap of the Trump campaign.

Speaker Paul Ryan not mincing words on the subject.

(BEGIN VIDEO CLIP) REP. PAUL RYAN (R-WI), SPEAKER OF THE HOUSE: We have not seen evidence that there was a wiretap or FISA court order against Trump Tower or somebody in Trump Tower.

(END VIDEO CLIP)

ROMANS: Ryan backed up by Senate Intel Committee Chairman Richard Burr and the ranking Democrat on the panel, Mark Warner. Their statement says this, "Based on the information available to us, we see no indications the Trump Tower was the subject of surveillance by any element of the United States government either before or after Election Day 2016."

CNN's Jim Acosta was in the line of fire at the White House.

(BEGIN VIDEOTAPE)

JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT: Dave and Christine, the White House is still digging in, trying to explain President Trump's baseless claim that former President Obama wiretapped him at Trump Tower during the 2016 campaign. During a testy news briefing over here at the White House, Press Secretary Sean Spicer predicted the president will still be vindicated after the Intelligence Committees up on Capitol Hill investigate the matter. Here's what he had to say.

SPICER: The president has already said clearly when he referred to wiretapping, he was referring to surveillance. So, that's --

ACOSTA: It sounds like, Sean --

SPICER: OK.

ACOSTA: -- that you and the president are saying now, well, we don't mean wiretapping anymore, because that's not true anymore. So, now, we're going to say other forms of surveillance. What's it going to be next?

SPICER: No, no -- Jim, I think that's cute, but at the end of the day, we've talked about this for three or four days. What the president had to, quote, "wiretapping," in quotes, he was referring to broad surveillance. And now, you're basically going back. We talked about this several days ago.

The bottom line is that the investigation by the House and the Senate has not been provided all of the information. And when it does -- but where was the concern --

(CROSSTALK)

SPICER: -- hold on. I just --

(CROSSTALK)

ACOSTA: -- not evidence --

(CROSSTALK)

SPICER: No, no. What I -- I think the president addressed that last night, said there's more to come. These are merely pointing out that I think there's widespread reporting that throughout the 2016 election, there was surveillance that was done on a variety of people. That came up --

(CROSSTALK)

ACOSTA: -- investigation going on as to whether there was contact between the president's campaign and the Russians --

(CROSSTALK)

SPICER: Jim, I find it interesting that you -- you somehow believe that you --

(CROSSTALK)

COSTA: Of course, they're going to be looking at these various --

(CROSSTALK)

SPICER: OK. OK. I get it. Somehow, you seem to believe that you have all of this information. You've been read-in on all of these things, which I find very interesting.

ACOSTA: And President Trump will have another opportunity to sound off on this controversy when he holds a joint news conference with the German Chancellor Angela Merkel later on today -- Dave and Christine.

(END VIDEOTAPE)

BRIGGS: Jim Acosta, Godspeed.

FBI Director James Comey will testify before the House committee on Monday. The ranking Democrat on the committee, Adam Schiff, telling CNN he expects Comey will also say he has seen no evidence to support the president's wiretapping claim.

You can add the U.K. spy agency dismissing the president's wiretapping claims. The claims surfaced on Tuesday on Fox News and repeated at the press briefing by Sean Spicer.

(BEGIN VIDEO CLIP)

SPICER: Three intelligence sources have informed FOX News that President Obama went outside the chain of command. He didn't use the NSA. He didn't use the CIA. He didn't use the FBI and he didn't use the Department of Justice.

He used GCHQ. What is that? It's the initials for the British spy agency. So, simply by having two people saying to them the president needs transcripts of conversations involving candidate Trump's conversations, involving President-elect Trump, he's able to get it and there's no American fingerprints on this. (END VIDEO CLIP)

BRIGGS: CNN international diplomatic editor Nic Robertson live in London this morning.

Good morning to you, Nic.

How is the U.K. pushing back against these latest allegations?

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: In a way that it doesn't normally. GCHQ, Government Communications Headquarters, this government agency very, very rarely if ever comments on any allegations about anything that it is doing. This is part of Britain's national security infrastructure, the central part of it. It plays a key role in assisting the United States on counterterrorism on any number of big and important issues in the relationship with the two countries.

So, it is really strange and uncommon for them to answer this. And they answered it utterly. This is their language here. They -- these allegations that Sean Spicer read out -- they are utterly ridiculous and should be ignored.

We also are hearing other politicians here in Britain piling on. The leader of the third largest party here saying, "Trump is compromising the vital U.K./U.S. security relationship to try to cover his own embarrassment.

[04:35:08] This harms our and U.S. security." And then he goes on to add, "Shameful".

So, this is something that we are seeing a lot of push back here. We talked to the prime minister's office this morning. They are pointing us to that statement from GCHQ.

Of course, this is quite embarrassing for Prime Minister Theresa May right now. Why? Because she invested a lot of political capital to go to Washington, to be the first world to sit down face to face with president, Britain and United States supposed to have a special relationship.

Theresa May fighting huge issues here in Britain at the moment, the issue of Brexit and on another huge front, Scotland trying to move for independence. Her hands -- she is incredibly busy right now. This is a distraction she doesn't need, but it is getting very, very strong and unequivocal push from here, Dave.

BRIGGS: That's some great context, Nic Robertson. How unprecedented this pushback is from British intelligence. Thank you.

ROMANS: All right. Back to this budget. We are going over the White House budget blueprint over the past 24 hours. This is Trump's campaign promises turned into numbers.

But some of what's in the budget wish list is counter to the president's agenda. Let me show you some examples. First, at his inauguration, he said, "Forgotten men and women will be forgotten no longer." But cuts to programs like Meals on Wheels, federal funding of rural airports and affordable housing could hit some of his supporters, the very people who put him in office.

Second, President Trump has said he wants to spend big on infrastructure. This budget cuts $500 million from the Transportation Department's rebuilding budget. It slashes several programs which support infrastructure projects in the nation's poorest areas. Mick Mulvaney says that they would do an infrastructure bill later that is better but it does cut that right now.

Third, Trump has championed innovation in science and medicine to rid the world of disease and fine miracle cures. But he slashes nearly $6 billion from scientific research of the National Institutes of Health, $6 billion. And he cuts deeply from the Environmental Protection Agency and Department of Health and Human Services.

There are also the cuts to the New York City Police Department, in President Trump's hometown. NYPD gets federal funding for counterterrorism. The commissioner says nearly all of that funding will disappear.

For all of the funding and programs the budget slashes, the administration says they are outdated or ineffective. And no question, there is waste and duplicity in government, all right? But advocates for the poor, scientists and doctors groups are concerned. What you see here is a dramatic remaking of how government works.

All right. Also a remaking of government works, the bill to replace Obamacare hanging in the balance this morning with the growing number of Republicans voicing opposition to the plan. House Speaker Paul Ryan clinging to hope his measure will survive. He cannot afford to lose more support here, support for more than 21 Republicans.

And right now, exactly 21 Republicans have gone on record saying they will oppose the measure or they are leaning against it. President Trump still sounding helpful, tweeting "great progress on health care, improvements being made, Republicans coming together."

More now from CNN's Sunlen Serfaty on Capitol Hill.

(BEGIN VIDEOTAPE)

SUNLEN SERFATY, CNN CONGRESSIONAL CORRESPONDENT: Good morning, Dave and Christine.

Opposition continues to stack up here on Capitol Hill over the House health care bill. And Speaker of the House Paul Ryan, he has very little room for error here as he continues to work behind the scenes to wrangle the votes he needs. The bill did inch forward a bit on Thursday up here on Capitol Hill, passing the Budget Committee. It now goes on to the Rules Committee. And that's where Speaker Ryan can potentially make these small tweaks and small changes that he has been talking about.

That's where essentially it gets really difficult. You have Ryan who very well knows he needs to attract enough conservative votes and make enough changes to attract new conservative votes, but not make too many changes to lose moderate votes.

Here is how he put it on Thursday.

RYAN: Clearly, the main parts of this bill are going to stay exactly as they are, but we are making those improvements and refinements based upon the feedback we're getting from our members and the president of the United States is the one who's been mediating this. The president of the United States is the one who's bringing people together and sitting around a table, hashing out our differences so that we get to a consensus document.

The goal here is get to a bill that can pass.

SERFATY: And note there at the end, Speaker Ryan taking pains to portray that he and President Trump he believes are in sync as they push forward on this bill and really trying to push some ownership and some responsibility for its passage back on President Trump -- Dave and Christine.

(END VIDEOTAPE)

BRIGGS: Sunlen, thank you.

We know now exactly how much former National Security Adviser Michael Flynn was paid by Russia Today for a speech in Moscow. Flynn disclosed last year that he had been paid by the state run broadcaster that's officially known as RT. It was viewed as a Kremlin propaganda tool by most in U.S. intelligence.

Flynn did not disclose the amount. But now, the top Democrat on the House Oversight Committee Elijah Cummings says RT paid Flynn almost $34,000.

[04:40:07] Flynn was forced to resign for misleading the vice president over his contacts with Russian officials. Last week, Flynn officially registered as a foreign agent over work he did for a Turkish owned company.

ROMANS: All right. Forty minutes past the hour.

The Secretary of State Rex Tillerson right now is in South Korea. He is taking questions at a press conference with the foreign minister there. This amid rising tensions with the North. Why did Tillerson believe diplomacy has already failed?

We're going to go back to Seoul, next.

(COMMERCIAL BREAK)

ROMANS: Welcome back this morning.

Secretary of State Rex Tillerson in South Korea today. The second stop on the six-day visit to Asia. Tillerson sending a message that the Trump administration is

abandoning diplomatic efforts to talk North Korea out of nuclear confrontation. The secretary says after two decades of trying, it's time for a new approach.

[04:45:04] What is that approach?

For more on what that means, let's go live to the DMZ between South and North Korea and bring in CNN's Paula Hancocks.

We just heard him at a press conference with the foreign minister of South Korea. Did he layout what his new diplomatic strategy will be?

PAULA HANCOCKS, CNN INTERNATIONAL CORRESPONDENT: Well, Christine, we don't have a clear idea of what this new policy is or in fact what is new about it. We did hear from Secretary Tillerson that strategic patience policy is finished. That is the policy the Obama administration had been following. You can see over the eight years, North Korea made massive steps in its nuclear and missile program.

He did say that the only way North Korea would have economic security and peace is to give up its nuclear weapons. And he said they were exploring a new range of policy and diplomatic security and economic measures. All options are on the table is what the top U.S. diplomat said.

He also said conditions are right for talking to North Korea at this point. So, very clearly saying that negotiations are not on the table and said there's no intention of ending military exercises. The U.S. and South Korea are holding their annual exercises here in South Korea at the moment, which infuriates North Korea every single year. China has been asking them to put those on hold.

He also says, we don't want to get to the military response. We don't want things to get that far, but if North Korea takes escalatory steps, then they will get a response. If they take these steps, the military option is on the table.

And so, also, we heard from the secretary of state saying this is not an Asian problem, it's not a Northeast Asian problem, it's not an American problem, it is a global problem, calling on more countries to do more to try ad stop North Korea, saying the United Nations Security Council has not reached the end yet. There is much more that they can do when it comes to sanctions -- Christine.

ROMANS: And he is on the way next I think to China which, of course, has a huge vested interest in what happen in North Korea and a lot of leverage there. All right. Thank you, Paula Hancocks at the DMZ. Thanks.

A stunning study finds that male financial advisors at Wells Fargo banks are more likely to mess up than women, but less likely, significantly less likely to lose their jobs. Report from the National Bureau of Economic Research shows women were 25 percent more likely to be fired from misconduct than men. The study also found men were three times more likely to misbehave and twice as likely to be repeat offenders, but more likely to get a second chance apparently.

BRIGGS: That is not good.

ROMANS: Wells Fargo says its focus is a diverse and inclusive work environment. I'm not sure what that has to do with women getting fired more. The study likely to add to concern over this bank's culture issues following last year's fake account scandal.

BRIGGS: You have to fix that.

Federal and state prosecutors deciding not to charge New York Mayor Bill de Blasio over his fundraising practices. The federal investigation found de Blasio solicited donors seeking favors from the city and then contacted agencies on their behalf. In an unusual disclosure, the Manhattan district attorney did say De Blasio's actions were contrary to the, quote, "intent and spirit of the campaign finances laws." De Blasio is up for re-election later this year and has denied any wrongdoing.

ROMANS: Breaking overnight: New York City mourning the loss of an emergency medical technician after she was run over by her hijacked ambulance. Police say a second EMT was injured when a man who had been riding on the back of the vehicle, slipped into the driver seat after it stopped, he put the ambulance in reverse, running over Yadira Arroyo, fatally injuring her. An off-duty police officer and Good Samaritans captured the 25-year-old suspect who has a criminal history. Arroyo was a 14-year veteran of the New York City Fire Department and a mother of five. Just a tragedy there.

All of the celebrities staying warm, thanks for the hottest in outer ware. And now, customers and investors are rushing to buy. I'll show you how the newest stock on Wall Street flew into its first trading day, next.

(COMMERCIAL BREAK)

[04:53:25] BRIGGS: A defining moment for U.S. and German relations. President Trump hosting Chancellor Angela Merkel at the White House today. It will be their first face-to-face meeting since Mr. Trump ridiculed the chancellor on the campaign trail, accusing her of ruining Germany.

CNN's Atika Shubert live from Berlin.

Good morning to you, Atika. What has been the response and embrace of President Trump?

ATIKA SHUBERT, CNN INTERNATIONAL CORRESPONDENT: Well, it's been pretty frosty start for Merkel and Trump. You know, Merkel was one of the first to have a phone conversation with Trump. And in that conversation, she very pointedly told him that the immigration ban he took in effect with executive order was not only wrong, but in violation of international law.

So, it's been a bit rocky, and, of course, Trump has his opinions about Merkel, saying that her refugee policy has been a catastrophe for the country. So, they've got to overcome all of that and start again, basically.

And Merkel is in many ways the anti-Trump. She's somebody who considers things carefully. She doesn't speak off the cuff. She's very reserved. She doesn't tweet.

So, you know, there's going to take a lot for these leaders to connect. But it's very important that they do. She, of course, has more than a decade running one of the world's most powerful economies, with plenty of diplomatic and political experience.

And, in fact, Trump may have a lot to learn from Merkel. She's somebody who has successfully faced down, for example, Russian President Vladimir Putin. She speaks fluent Russian, grew up in Soviet East Germany. So, it will be really interesting to see these two leaders meet and see if they can form some good working relationship.

[04:55:05] BRIGGS: Body language experts will be picking apart every bit of the meeting. Thank you, Atika.

ROMAN: All right. McDonald's now saying it was a victim of a hack attack after the tweet appearing at the top of the page on Thursday. Reading, "Donald Trump, you are actually a disgusting excuse of a president. We would love to have Barack Obama back. Also, you have tiny hands."

Moments later, McDonald's tweeted its account had been compromised and about to launch an investigation.

The president is known to be a huge fan of the chain. There he is in a McDonald's commercial. I don't know if it was on Air Force One or campaign trail, but there is a picture of him with a big quarter pounder with cheese. I couldn't tell what it was. He is a consumer of --

BRIGGS: He's (INAUDIBLE) McDonald's.

ROMANS: He's a consumer of Micky D's. Micky D's looking into what happens.

BRIGGS: Fascinating story. It just blew up on twitter yesterday because Robert Gibbs is in charge of the global communications. He had to do with the tweet, though.

"Saturday Night Live" doing something it has never done in the run. It is taking the show live for the first time. That means you will get to see more of Press Secretary Spicey. Melissa McCarthy will host May 13th.

But the first "Saturday Night Live" live actually in Mountain and Pacific Time Zones set for air April 15th. That will be hosted by "SNL" alum Jimmy Fallon. Top NBC brass say the move will allow everyone to get in on the joke at the very same time.

ROMANS: All right. It's still too late for me.

(CROSSTALK)

BRIGGS: Yes, it is. We'll see next morning.

Winter just won't let go. Big snowfall totals from the last storm and another blast of cold, snowy weather on the way.

Let's turn to meteorologist Derek Van Dam.

(BEGIN VIDEOTAPE)

DEREK VAN DAM, AMS METEOROLOGIST: Good morning, Dave and Christine.

Did you know after this week's nor'easter that over 98 percent of New England is blanketed by at least an inch of snowfall. That system is long gone.

We are focusing on a significantly weaker storm to bring chances of snowfall from the upper Great Lakes, eventually shifting into New England by the middle part of the weekend. Here is Detroit, a snowmaker for you. But traveling further south into places like Chicago and Indianapolis, that is where it will be all rain, a chilly rain. But still, look for precipitation.

Now, we do have winter weather advisories from parts of Wisconsin into west Michigan. That continues through the course of the day today. Waking up to very cold temperatures across the Deep South, all the way to the Florida Panhandle with freeze warnings in effect. Another blast of cold air starting to develop across New England.

So, don't get used to the brief warm up. Look at the temperatures for New York City, by the middle to end of next week. Back to you.

(END VIDEOTAPE)

ROMANS: All right. Thanks, Derek.

It's that time of the morning, just about top of the hour. Let's get a check of the money. Stock futures ticking lower this morning. The market dropping yesterday led by health care stocks. Investors didn't like the cuts to research and science programs, and that sector struggled. Stock markets in Europe and Asia are mixed.

Mortgage rates are pushing higher following this week's interest rate from the Federal Reserve. The national average for a 30-year fixed rate mortgage is now 4.3 percent. That's the highest level, the highest level this year. Analysts see a gradual increase in rates. But expect the national average to stay below 5 percent this year.

Here is the real hit to home buyers, when interest rates rise, a quarter of a percentage point, this is how much it costs, for a $200,000 mortgage, it is about $29 more a month. As you see, the increase if the loan, as the loan gets bigger for a half a million dollar jumbo loan, it is $73 more a month. Some of the high cost neighborhoods and zip codes in America, when interest rising and price you out of the market. One of the highest IPOs of the year soaring in its Wall Street debut.

Canada Goose is the market of jackets and parkas. They're popular among celebrities. They cost upward of $800 a piece.

Stock soaring 25 percent in the first day of trading. Despite mixed results in retail over the past few months, investors like this company's combo of rugged looks and luxury prices. But the IPO was not without controversy. Animal rights group PETA protesting outside of New York Stock Exchange. It says the jackets are trimmed with real fur and they are filled real down and they say that causes pain and suffering to animals. The group tells CNN Money it plans to buy shares of Canada Goose so it can become an activist investor.

BRIGGS: You are heading skiing this weekend.

ROMANS: I am.

BRIGGS: Get yourself a Canada Goose jacket to stay warm. Eight hundred bucks is a little out of my league.

ROMANS: Yes, it was not (INAUDIBLE) I don't have it.

BRIGGS: All right. EARLY START continues right now.

(MUSIC)

(BEGIN VIDEO CLIP)

SPICER: You're mischaracterizing what happened today. Where was your passion and where was your concerned when they all said that there's no connection to Russia? Where was it then?

(END VIDEO CLIP)

ROMANS: A press briefing for the ages. A defiant and combative White House defends the president's wiretapping claims despite the fact the bipartisan members of the House Intel Committee say there is no evidence.

BRIGGS: Some of the White House budget proposals hitting the needy where it hurts. But despite the backlash, the White House is standing by its case.

ROMANS: And then there's the health care overhaul. A growing number of House Republicans oppose the GOP health plan. Critical moment now for Speaker Ryan who may have already lost more support than he can handle to pass this bill.