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Full Senate Heads to White House for Briefing on North Korea; Wells Fargo CEO Hopeful for Tax Reform Under Trump; Trump Team Rolls Out Tax Plan; Derek Jeter, Jeb Bush Set to Buy Miami Marlins; Aired 10:30-11a ET
Aired April 26, 2017 - 10:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[10:30:00] JOE JOHNS, CNN SENIOR WASHINGTON CORRESPONDENT: They say this ruling out on the West Coast will be overturned eventually. If not, it goes all the way to the Supreme Court and that's where they predict they'll win in the end.
Back to you, John and Poppy.
POPPY HARLOW, CNN ANCHOR: All right, Joe Johns, thank you very much.
JOHN BERMAN, CNN ANCHOR: All right. President Trump having some folks over this afternoon. The entire U.S. Senate. For what could be a pretty revealing briefing on North Korea.
BERMAN: This is both North and South Korea have been carrying out military drills, some of the largest drills that peninsula has ever seen. We have a live report from North Korea next.
BERMAN: All right. A pretty unusual gathering at the White House this afternoon. The full Senate being invited over for a briefing on the escalating tensions with North Korea.
[10:35:02] The president, we are told, is expected to drop by this briefing. If you're wondering, House members will get their briefing on Capitol Hill.
HARLOW: All of this is happening as the U.S. is now saying that its missile defense system or THAAD in South Korea will now be operational within days. That is much sooner than the previously stated goal of the end of the year.
Our international correspondent Will Ripley is following all of this developments in Pyongyang.
WILL RIPLEY, CNN INTERNATIONAL CORRESPONDENT: John and Poppy, here in North Korea we saw a dramatic show of force and a triumphant announcement on state media of what they claim is their largest ever military exercise and you have to see these new pictures of the North Korean leader Kim Jong-un presiding over this, 300 pieces of long- range artillery fired almost simultaneously along with submarines and bombers on practice runs, all of it designed to send a message to the United States and the Trump administration that North Korea is ready for war, something that they view is a very likely possibility given the heightened tensions right now.
I had the rare opportunity to speak on the record just a short time ago with a North Korean government official who told me that this country, just because they haven't conducted their sixth nuclear test just yet, doesn't mean they're not going to do so. In fact this official told me it is only a matter of time before they do conduct another nuclear test and launch more missiles.
I asked if the delay, if the nuclear test hasn't happened yet as a result of increased pressure from the Trump administration and the possibility of China exerting more economic punishment on the North Korean regime if they engage on a provocative act such as a nuclear test, the response I was given, absolutely not.
They say external forces do not play a role in any of this and they say that the United States needs to watch because they will be testing more nuclear weapons when they see the time is right. The question, though, how will the Trump administration respond -- John and Poppy.
BERMAN: All right. Will Ripley inside Pyongyang in North Korea. Thanks so much, Will.
I want to bring in CNN global affairs analyst and national security investigations editor for Reuters, David Rohde.
David, I know you work your sources in Congress all the time. The full Senate going over to the White House this afternoon. This is a pretty unusual full Senate briefing on the tensions in North Korea. Do you have any sense of what the senators want to or expect to hear from the White House today?
DAVID ROHDE, CNN GLOBAL AFFAIRS ANALYST: I guess what they want to hear is sort of a clear strategy, you know, and was there some sort of assurance, you know, most importantly given by Chinese President Xi to President Bush. You know, is China -- you know, China and the U.S., are they on the same page? Is there a sort of plan behind what is a lot of saber rattling by both sides, both the U.S. and North Korea.
HARLOW: So the ranking member of the Senate Foreign Relations Committee, Senator Ben Cardin, on this show yesterday told us, he talked about wanting mature leadership on this issue and he defined them by the articulation of a strategy.
Do you believe from all the sources you've spoken with that the White House does have that strategy in place and that it will articulate it to the senators today and say, here is our red line, for instance?
ROHDE: So several weeks ago the White House sort of -- there were press reports on them unveiling the strategy of maximum pressure on North Korea and also maximum engagement diplomatically but there's a problem with that and that many of the sort of senior positions both at the Pentagon and at the State Department that deal with Asia, a policy had not been filled by the administration. So there is sort of a disconnect there.
There's a lot of theater going on. This is a very unusual briefing that it's probably again designed to show North Korea and China how seriously the Trump administration is showing, you know, that their approaches to North Korea and again, the big question remains, will that get China to really sort of turn the economic screws on North Korea or not?
BERMAN: So Senator Lindsay Graham, a sometimes now dinner guest of President Trump, he wrote this yesterday and it's really interesting, actually. He says, "President Trump is not going to let the nut job in North Korea develop a missile with a nuclear weapon on top that can hit the United States."
That's actually a pretty high bar right there. I mean, we know North Korea is working to develop an intercontinental ballistic missile. We know they are working to develop nuclear warheads that can fit in that missile. If Lindsey Graham saying the president won't let that happen, it begs the question how?
ROHDE: That is the big question and everything I'm hearing whether it's from the Hill or, you know, anyone else in Washington is that the administration wants to resolve this diplomatically. Again they see, you know, that there could be some kind of partnership with China to resolve this without the use of force, and the danger is when you keep, you know, signaling things, you installed the new missiles, you have the Senate briefing, you have this carrier group headed there, could there be a mistake?
Again, there's no easy, you know, military solution to this. You could take out, you know, their nuclear facilities, but they would immediately carry out an artillery strike on Seoul killing thousands of civilians so that's why the North Koreans I think demonstrated their artillery yesterday.
HARLOW: David Rohde, thank you so much for the analysis, the reporting. We appreciate it.
Still to come for us, in just hours, the president's team will unveil what they promised to be the biggest tax cuts, tax reform in American history.
[10:40:04] So the head of one of the biggest banks in America says hold on. Make sure it's not just tax cuts. It has to be more.
(BEGIN VIDEO CLIP)
HARLOW: Does it happen? If you were a betting man and you put your money on it, does it happen this year?
TIM SLOAN, CEO, WELLS FARGO: I don't know if it's going to happen this year, but I believe it's going to happen.
HARLOW: In this administration?
SLOAN: Yes. HARLOW: In these four years?
(END VIDEO CLIP)
[10:45:43] HARLOW: So the biggest tax cut and tax reform in history, it's a big promise this morning from the Treasury secretary, but the CEO of one of the biggest banks in America says it can't just be cuts. It has to be reform. So does he think the White House can actually get it done? I asked him.
HARLOW: What is the number one thing that you would like to see out of the Trump administration this year? What action?
SLOAN: So I'm informed in that answer by what our customers want. So we --
HARLOW: What do they want?
SLOAN: The biggest issues that our customers have had both small business and consumers over the last few years has been taxes and the health care system. And I'm hopeful that the administration will be able to address both those issues.
HARLOW: Let's talk about that hope because we saw what happened with health care reform. We'll see if they -- if it happens the second time around, if they can get it through, but on tax reform, you know, you have Treasury Secretary Steve Mnuchin coming out this week and telling "The Financial Times" that August deadline that they had set does not look realistic.
What makes you hopeful or are you hopeful that the Trump administration will get comprehensive tax reform done in 2017? Not just tax cuts, but actual reform.
SLOAN: Yes. I think actually you hit the nail on the head. It's more important to get tax reform from my perspective than tax cuts. Tax cuts would be great. Who wants to pay more taxes? Nobody does. But would it be more important to make sure that we get tax reform? And I look at the EOCD statistics that show us that in the U.S. we're 31 out of 35. Just think about that.
HARLOW: You're talking about corporate tax rates.
SLOAN: Yes. Well, no, this is just the whole tax system.
SLOAN: All right. We're losing jobs and companies are moving overseas because we found ourselves because we haven't addressed it for 30 years. HARLOW: It's hard.
SLOAN: We are number 31. Who wants to be number 31? I don't.
HARLOW: So is the reason it hasn't happened since 1986, comprehensive tax reform, does it happen? If you were a betting man and you put your money on it, does it happen this year?
SLOAN: I don't know if it's going to happen this year, but I believe it's going to happen.
HARLOW: In this administration?
HARLOW: In these four years?
BERMAN: All right. What we know, it's interesting, talking about tax cuts and tax reform, what we know is that the administration is proposing corporate tax cuts down to 15 percent, also the -- for all businesses roughly, down 15 percent. And maybe --
HARLOW: You know who would be glad if it happens.
BERMAN: Maybe increase in the standard deduction which would also be a flat-out tax cut for a whole lot of people. So let's talk about this with Mike Graetz. He is the former deputy assistant secretary for tax policy under George H.W. Bush, also with us Jonathan Gruber, an economist professor at MIT and is one of the key architects of Obamacare which we'll get to in just moment.
Michael, you know, during the break you say to me, tax cuts, they're easy, tax reform, that's hard, and what we have here, at least we think, just tax cuts. We do not see any plans to restructure where revenue is coming from or reshape the revenue collection process. Is that a problem? Would that be necessary to really change things in this country?
MICHAEL GRAETZ, FORMER DEPUTY ASSISTANT SECRETARY FOR TAX POLICY, TREASURY DEPARTMENT: Well, tax cuts have been done more than once. They're always supposed to pay for themselves and they never quite do, and the hard part is who are you going to get to pay for the tax cuts? And that seems to be the great mystery of the day.
As you know, Ways and Means Chairman Brady and Paul Ryan proposed taxing imports at the border as a way to pay for tax reform, but Mr. Trump and his advisers don't seem likely to go in that direction.
HARLOW: It looks like the border adjustment tax is --
HARLOW: Is dead.
HARLOW: Exactly. So, Jonathan, one way you can pay for this stuff is if the economy grows gangbusters year on year for a long time and it's not like this hasn't happened before. Right? It happened under Reagan, it's happened after the Kennedy tax cuts. The economy is different now and you've got a much, much, much bigger national debt. Mnuchin, the Treasury secretary, promised again this morning at least 3 percent annual growth. Can it happen?
JONATHAN GRUBER, ARCHITECT WHO HELPED DESIGN OBAMACARE: Well, look, we don't just have to have theoretical conjectures here. We have decades of evidence at both the national level and the state level that as Mike said, tax cuts don't pay for themselves. Indeed they don't even come close to paying for themselves and look, if you look at the most rapid job growth since Ronald Reagan, it was under Bill Clinton who raised taxes on the rich.
[10:50:02] So I think the notion that this is going to cause massive increases in growth is wrong. Indeed, if you look at a cut in the corporate tax rate, mostly what it does is reward stockholders who made investments years in the past, going to get the returns now. How does that increase growth?
BERMAN: And even if it does spur on growth, Michael, just to follow up on something you said, and Jonathan was just saying right there. It is, you know, dynamic scoring is the phrase that this administration, and other economists like to use, the idea that if you cut taxes the economy will grow so much it will bring in more revenue.
You know, you've been at this for a long time. Do you believe in the magic of dynamic scoring?
GRAETZ: Well, I believe there is some growth and economic growth is the driver of revenues in the federal government and the state governments. What I'm worried about is turbo dynamic scoring which seems to be what some people have in mind which is just to assume away all the problems that you would have and economic growth will solve all the problems and that's, as Jonathan said, has been unrealistic in the past.
HARLOW: You know, Jonathan, John and I are sitting up here this morning wondering if it's actually Democrats who care more about debt and deficits than Republicans at this point because this is a president who just last year said on CNN, I am the king of debt, and he just, you know, a month ago told "The New York Times" magazine, we're going to prime the pump in order to get this economy going, in other words spend money to make a lot of money in the future. Correct me if that is not Keynesian liberalism?
GRUBER: Look, it's once again the facts are clear. If you look at every president since Ronald Reagan, the deficit has gone up under Republicans and down under Democrats. Bill Clinton brought the deficit into surplus. Barack Obama took a catastrophic deficit situation and brought it back under control.
The old notions of fiscal responsibility being the province of Republicans are simply wrong and I think we need to stop applying a fiscal responsibility label if you just want to cut taxes. Let's just call them what they are, tax cutters, not fiscally responsible individuals.
BERMAN: And Michael, you worked under a Republican administration. We wanted to give you a chance to defend there. I mean, I think there's probably plenty of fiscal irresponsibility to go around, politically speaking.
GRAETZ: Well, sure. The Democrats want to raise the deficit by spending and the Republicans want to raise it by tax cuts.
BERMAN: Everyone was in on the game.
GRAETZ: Nobody wants to pay for it. Nobody wants to pay for anything. I do think it's important to understand that we are now really hurting ourselves in the global economy by having a very high corporate tax rate. We have the highest in the world. We're creating incentives for people to borrow here, to put all their deductions in the U.S. and put all their income abroad and bringing down the rate has been a goal of everyone who's thought about this seriously. So I think we definitely need to bring down the business tax rate.
HARLOW: I think most -- a lot of Democrats would agree --
BERMAN: Every Democrat we've had on the show agrees.
HARLOW: Yes. They agree. It's just how much and how you're going to pay for it.
HARLOW: Before we let you go, Jonathan, very quickly, Paul Ryan just said something that struck us at the top of the hour. Listen to this on health care.
(BEGIN VIDEO CLIP)
REP. PAUL RYAN (R), HOUSE SPEAKER: So we want to give the states the ability to kind of customize the reforms to maximize the ability to lower premiums and protect people with pre-existing conditions and that is exactly at the heart of what the MacArthur amendment does.
(END VIDEO CLIP)
HARLOW: He's promising that this new deal that is being worked out between the Tuesday group and the Freedom Caucus would protect pre- existing conditions, no question.
You are one of the architects of Obamacare which did that or does that currently. Do you buy that argument? Because that's not how we read the agreement. This would give states these waivers to get out of that. GRUBER: You're absolutely right. Look, let's be clear. People talk
about pre-existing conditions protection. Technically that would stay. But in practice it would go away because this law would states to remove community rating which means insurers could now charge the sick many, many multiples the healthy. So yes, insurance would have to cover cancer, but you could charge people hundred-thousand dollars a month to cover it. How is that providing pre-existing conditions protection? It's not.
This is simply taking what was already a bad law and making it even more discriminatory against the sick and we need to call them on that and be honest about that.
BERMAN: Yes. If you're saying you're protecting people with pre- existing conditions but you can raise their premiums to infinity, you know, is that really protection? I think that's the political argument that will need to happen going forward.
Last word on Obamacare?
GRAETZ: Well, I think that it's going to be very difficult to get the votes in the House just like it was before. Everything that pleases the conservatives worries the moderates on the Republican side and it's a very difficult balancing act.
BERMAN: Moderates is where the game is right now.
HARLOW: Thank you, guys, very much. We appreciate it. Michael, nice to have you. Jonathan, thanks to you as well.
Still to come for us, from running for president to running a baseball franchise. New reports that Jeb Bush teaming up with Derek Jeter to buy the Florida Marlins. The details are next.
[10:58:48] BERMAN: All right. Derek Jeter going from the dugout to retirement to the owner's box and he looks like he'll be joined by the former governor of Florida.
HARLOW: Yes. Andy Scholes has more on the "Bleacher Report" this morning. Good morning.
ANDY SCHOLES, CNN SPORTS CORRESPONDENT: All right. Good morning, guys. Yes, the future Hall of Famer and former Republican presidential candidate Jeb Bush joining forces to buy the Miami Marlins. According to multiple reports Jeter and Jeb's group has won the bid to buy the team. The price tag, $1.3 billion. It's not a done deal by any means. The sale now must be approved by 75 percent of Major League Baseball's owners.
Jeb following in his brother, former president George W. Bush's footsteps as he was once part owner of the Texas Rangers, and according to reports, Jeb is going to be the controlling owner of the Marlins if the deal goes through. All right. It's only April, but we may have the play of the year in
baseball. Tied 2-2 in the seventh. Blue Jay's Chris Coghlan, charging home and check this out, he goes airborne over St. Louis Cardinals catcher Yadier Molina. Incredible play. The Blue Jays would go on to win the 6-5 in extra innings.
And John, I don't know if there's ever been a better play by a runner to avoid a tag.
BERMAN: I have never, ever seen anything like that. Justin (INAUDIBLE) did something cool last year, but I don't want to quibble with you, Andy Scholes. Thank you very, very much. Good to see you.
HARLOW: And thank you all for joining us. I'm Poppy Harlow.
BERMAN: And I'm John Berman. "AT THIS HOUR WITH KATE BOLDUAN" starts now.