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Trump Will Keep U.S. In NAFTA For Now; White House Tax Wish List Helps Wealthy; Obamacare Repeal Now In GOP Moderates' Court; Lawmakers Frustrated By North Korea Briefing. Aired 5:30-6a ET
Aired April 27, 2017 - 05:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[05:30:00] CHRISTINE ROMANS, CNN ANCHOR: Welcome back to EARLY START, I'm Christine Romans.
DAVE BRIGGS, CNN ANCHOR: And, I'm Dave Briggs. The "New York Post" phrases it, "Taxes Chainsaw Massacre." We will get more into this tax reform -- or is it just tax cuts -- in just a bit. It is 30 minutes past the hour.
ROMANS: All right. Breaking overnight, President Trump announcing he will not withdraw from the North American Free Trade Agreement after all.
BRIGGS: The president repeatedly slammed NAFTA on the campaign trail as a raw deal for American workers, but in phone calls to Canada's prime minister and Mexico's president, Mr. Trump said he wanted to improve NAFTA instead of scrapping it.
ROMANS: In a statement the president said, "It is my privilege to bring NAFTA up to date through renegotiation. I believe that the end result will make all three countries stronger and better." President Trump has already withdrawn the U.S. from another huge trade pact, President Obama's Trans-Pacific Partnership.
BRIGGS: The president's decision to stay with NAFTA came hours after a senior administration official said the White House was considering pulling out of the trade accord. Top Republicans reacted to that news by warning it would be a disastrously bad, reckless idea. Trade is now a developing theme in this White House, the key focal point of a war room that's now been set up. The president expected to make more moves on trade this week and well beyond.
ROMANS: OK. The man who won't release his tax returns wants to cut your taxes but he has no plan yet to pay for it and his top economic advisers can't say what it means for a family of four making $60,000 a year. Now, despite the lack of details, the Treasury Secretary Steven Mnuchin says there are certain aspects that the president considers non-negotiable.
(BEGIN VIDEO CLIP)
STEVEN MNUCHIN, TREASURY SECRETARY: The core principles of this -- we've been meeting with the House and Senate and they agree 100 percent. The core businesses make business rates competitive, bring back trillions of dollars to create jobs, simplify personal taxes, create a middle-income tax cut. So those core principles are non- negotiable and that's something that we all feel strongly about.
(END VIDEO CLIP)
ROMANS: They're promising tax cuts for everyone but from the details we do have the list could be a big boon to the wealthiest Americans, possibly even President Trump himself. That's because the administration wants to eliminate many taxes that disproportionately hit the wealthy, such as the estate or death tax which affects estates over $5.5 million. Repeal a tax on the rich that subsidizes Obamacare costs, essentially cutting capital gains taxes for the rich.
And, eliminating the alternative minimum tax or the AMT, a parallel tax that ensures high-income filers can't use breaks to pay no taxes. In fact, the AMT is something that Trump himself has paid. Information from his leaked 2005 returns show that without the AMT, Trump would have paid only $5.3 million in taxes that year instead of the $37 million he did. So the president, himself, may fare better under those proposals, at least in theory. We don't know for sure since he will not release his tax returns. And the other breaking news from yesterday's big press conference was that Steven Mnuchin, the Treasury secretary, said Donald Trump will not --
BRIGGS: Don't hold your breath.
ROMANS: -- release his tax returns.
BRIGGS: Ain't happening.
ROMANS: It will not happen. Joining us again, "CNN POLITICS" reporter Tal Kopan. Good morning. I want to stay on taxes for just a minute and Gary Cohn, the president's chief money man there, he was asked specifically about a family of four making $60,000 a year, and I want you to listen to his response.
(BEGIN VIDEO CLIP)
REPORTER: Middle-class families watching this tonight on the news -- a family of four, median income $60,000. What does it mean for them?
GARY COHN, NATIONAL ECONOMIC COUNCIL DIRECTOR: It could mean a tax cut.
REPORTER: How much?
COHN: Could mean a tax cut. You're asking the same question we got asked over here. We will -- we will let you know these specific details at the appropriate moment. We are in very robust discussions with the Senate, with the House leadership. They are progressing very quickly and we will continue to give you more details as we have them.
(END VIDEO CLIP)
ROMANS: A cynic would say the details were really forthcoming about companies, right, and about lowering the capital gains tax for people by getting rid of that 3.8 (ph) percent tax on the wealthy for their investments, but not for the middle class. TAL KOPAN, CNN POLITICS REPORTER: Yes, the White House is sort of trying to have it both ways here. They want to look like they're driving the ship and they are, you know, releasing this plan that's going to be the skeleton of whatever comes out of the House and Senate. At the same time, they're sort of ducking on the details and saying oh, that will be left up to legislators. Folks in Congress don't fully appreciate this approach and certainly, the details are important.
And when you throw in the backdrop, as you mentioned, of the fact that Trump is not releasing his own tax returns and so it calls into question how would his plan impact himself, his children, folks like him. That's going to be a line of attack from the Democrats. And so, when you put all that together it's a bit difficult to really take this package fully seriously because already you hear rumblings from his own party in the House and Senate saying this is not what we want our starting point to be.
[05:35:12] BRIGGS: That's what I wanted to ask you about because there's just about universal agreement we need to lower the corporate tax rate.
BRIGGS: We need to simplify our tax code. What might that opposition be from the right?
KOPAN: Well, one of the things -- and when you say opposition from the right, just like Obamacare, the right is not united on this.
KOPAN: I mean, we've talked a lot. I feel bad -- there are a lot of acronyms, there are a lot of jargony terms, but the border adjustment tax is another one and that's something that has to do with changing the way exports versus imports are taxed, and it's a bit of a wonky- type thing but it's sort of Paul Ryan's baby, in a way, and we don't see that in this tax plan. And there are definitely folks in the Republican Party who are happy to not see that in this tax plan. And so, even when we say well, OK, it's red meat for his base, it's not entirely clear that you can even get the entire Republican caucus on the same page with tax reform which -- again, if this were easy, past Congresses --
KOPAN: -- might have done it.
ROMANS: Totally. It hasn't been done since 1986 for a reason because it is so darn hard and it is so complicated. And there are some -- and remember, one in five big companies -- profitable big companies -- pay no tax, so there is profit that's been made in a very convoluted tax system. What I'm really concerned about -- what I really want to know for sure is if they allow companies to bring back their foreign profits that are stashed --
ROMANS: -- in bank accounts overseas -- trillions of dollars -- if they allow them to bring that back, how do you make sure it just doesn't go into share buybacks and dividends for shareholders, which is what Wall Street would like to see -- and how do you make sure it actually creates jobs? And, Dave Briggs, I don't know how you -- I don't how you make this --
BRIGGS: Don't put this on me, my friend.
ROMANS: No, I'm just saying that's a real challenge because this White House has staked itself --
ROMANS: -- as a champion of the little guy. If you give the big guys more money -- which is the stocks markets are reflecting that they're expecting more money, you know -- you can't just pay out -- you can't just make the big guys bigger.
BRIGGS: There's no question about that. But another complicated issue is that of NAFTA and whether the president will or will not pull out of the North American Free Trade Agreement. What are the politics here and what will his base feel if, in fact, we do stay in it?
KOPAN: Well, you know, trying to prognosticate about where Donald Trump's base will go is a little bit difficult. There are certainly things that his opponents have already pointed to and said look, this is a complete violation of what he promised on the campaign trail. His base seems to be sticking with him and part of that is that his base sort of voted for him not because of necessarily very specific policy proposals but because they trusted Trump to make the right decision.
Now, NAFTA was one his signature issues. You can count on one hand the number of things that from the beginning of his campaign to the end he sort of consistently came back to and trade was absolutely one of them --
KOPAN: -- and he called it raw deal. And so, you know, it's not surprising that he's not tearing it up honestly because the second that trial balloon was floated --
KOPAN: -- there was swift and aggressive reaction from his own party --
KOPAN: -- saying we are not on board with that.
ROMANS: Yes. KOPAN: So, you know, this is sort of a compromised position to say we're going to renegotiate it. But he is going to have to have something to show for this, at least by midterms and certainly by his reelection campaign, to keep his base happy. It may get him off the hook for now but you can't just say we're going to renegotiate it and at the end of the day end up with the same thing to fulfill what he promised on the campaign trail.
ROMANS: Absolutely. You've been writing about this judge -- a federal judge that blocked the Trump administration on some of the enforcements of sanctuary cities -- taking away funds from sanctuary cities. That's another thing. If you're looking at the wall in the war room in the White House that shows your 100 days -- on this -- on the sanctuary cities, the president has been rebuffed again and again.
KOPAN: Yes, absolutely. You know, it's a really interesting issue because the threatening language from the White House has been very aggressive on sanctuary cities. And what we heard them say is we want to take away all federal funds, or at least many federal funds, from sanctuary cities as punishment. But, you know, the text of the order he signed pointed to this obscure piece of law that most cities say they actually comply with already and is not really what they go after when they target sanctuary cities.
And so, that's all to say that the judge, once again, as we saw with the travel ban -- the judge sort of threw that in the face of the government's lawyers who got up there and said it's actually a fairly narrow thing. We're not going to pull all federal funds. And the judge said -- you know, quoting Sean Spicer in his opinion and quoting the president -- that's not how you've described this.
And so, you know, we see the president, once again, holding up the judiciary as sort of a punching bag and opponent, which certainly could fire up his base. And, you know, this will continue to move forward but it's a fascinating example of how the courts are taking his very robust public record and using it sometimes against the laws he's signing.
[05:40:15] BRIGGS: Well, and now the suggestion, according to reports, that he's looking at ways to break up the Ninth Circuit, so this is far from done. Tal Kopan, thanks for being with us from D.C. this morning.
KOPAN: Thank you, guys.
BRIGGS: With the health care battle brewing all eyes are on moderate House Republicans now after the hard-right House Freedom Caucus voted to back a deal and repeal and replace. The latest draft amendment hammered out by leaders for the moderates and the conservatives would allow states to seek waivers to weaken some Obamacare reforms, notably protecting people with preexisting conditions.
ROMANS: But there are reasons to be skeptical. This deal will come to a vote, or pass if it does. Moderates are not exactly lining up behind their leader. Tuesday Group go-chairman Tom MacArthur -- one moderate lawmaker telling CNN, "I spent the whole work period hearing from people pissed about preexisting conditions. This isn't helpful."
BRIGGS: Now moderates have to decide which is worse, backlash for voting for the new bill or backlash for not voting for it despite pledging to repeal Obamacare throughout. Still, the White House is projecting confidence here. Chief of Staff Reince Priebus says they'll get there soon but couldn't exactly say when.
ROMANS: All right. The U.S. considering putting North Korea back on the list of terror sponsors. What did lawmakers learn from closed- door briefings on the nuclear threat?
[05:45:45] BRIGGS: Plenty of tough talk but not a ton of substance. That's how several members of the Senate described an unusual briefing theyjust received about the threat from North Korea. The entire Senate bussed to the White House to hear about a range of options for dealing with Kim Jong Un and his nuclear ambitions. Lawmakers left wishing for more specifics, many saying little new information emerged. One thing we did learn, the U.S. is considering putting North Korea back on the list of state sponsors of terrorism. That's according to senior White House officials.
That's how -- let's check on how that's going over in Pyongyang. Let's go live to Seoul and bring in CNN's Alexandra Field. I guess the question some are asking is how were they ever off that list, Alex?
ALEXANDRA FIELD, CNN CORRESPONDENT: Look, that was a decision that was made under President George Bush in 2008 and it was seen as a way to accelerate or move toward talks to freeze the nuclear program -- to negotiate a freeze to the nuclear program. Obviously, that fell apart and that's where it's remained ever since. This idea of putting them back on the list is something that does continue to resurface. It is seen as one diplomatic option as, of course, everyone is looking for economic actions that can be taken as well -- the strengthening of sanctions.
When you talk about these kinds of things -- diplomatic options, putting them on the state sponsor terror watch list, more sanctions, it's going to sound quite familiar to everyone. That's because these aren't exactly new or novel or different approaches to dealing with North Korea. Of course, you have heard the Trump administration say repeatedly in its first 100 days that the era of strategic patience when it comes to North Korea is over and that all options would be on the table, which is why everyone has been looking to Washington and wondering what move would be next.
In the last few weeks we have seen a buildup of military assets in the region. The movement of the USS Carl Vinson toward the waters off of the Korean Peninsula, the docking of a very powerful submarine, and the decision to move forward as quickly as possible with the deployment of this controversial missile defense system that is, right now, being installed here on the -- on the Peninsula.
So for everyone who was looking for an entirely new or different approach, that's not what the world is hearing right now. You have the Secretary of State and the Secretary of Defense say after that meeting in Washington which took place yesterday that the strategy right now -- that the goal for the Trump administration is to achieve the denuclearization of the Peninsula and to ratchet down the tensions by working with partners to strengthen sanctions and look for economic and diplomatic measures here. That's everyone's first choice option, Dave.
BRIGGS: Yes, a lot of maneuvers but still the dynamics remain the same. Alex Field live for us in Seoul. Thank you.
ROMANS: All right. President Trump giving the Pentagon the power to set troop levels in the fight against ISIS in Iraq and Syria. This delegation of authority allows the Defense Secretary James Mattis to determine if more U.S. troops are needed to back operations to retake Raqqa in Syria and retake Mosul in Iraq from the Islamic State. Pentagon officials say the decision does not change current troop deployment numbers.
BRIGGS: All right, let's take a look at what's coming up on "NEW DAY". Our friend, Alisyn Camerota joining us this morning.
ROMANS: Good morning.
BRIGGS: Not much to talk about, as usual, Ali.
ALISYN CAMEROTA, CNN ANCHOR, "NEW DAY": My head is exploding. That's how much we have to sort of absorb and talk about this morning on "NEW DAY" and we have some very interesting guests. We have the lawmaker who is trying to come up with the compromise for health care reform. So, Tom MacArthur will be here. He will tell us about the MacArthur amendment that might just be that magical middle ground between the conservatives and the moderates to help them somehow repeal or reform Obamacare.
And then, we also are going to have one of the men central to the investigations into the allegations of Trump campaign ties to Russia, and that is Carter Page. You know his name. He was a top campaign adviser during the Trump campaign. So he will be here to answer all of the tough questions on "NEW DAY" when Chris and I see you at the top of the hour.
ROMANS: Now that should be something to look forward. All right, thank you so much, Alisyn.
BRIGGS: Talk to you in a bit.
ROMANS: It is a -- it is a $2 trillion day on Wall Street. What in the world am I talking about? I'll explain when I get a check on CNN Money Stream, next.
[05:54:05] BRIGGS: Republicans offering up a short-term spending plan to keep the government funded through next Friday. The House and Senate, though, still have to vote on the deal before tomorrow's deadline. It is expected to pass both chambers because of two concessions made, both by the GOP. No funding for President Trump's border wall and continued payment of subsidies to low-income Americans insured through Obamacare.
ROMANS: Breaking overnight, missiles strike near a Damascus airport. Syria's military blaming Israel. That's according to Syrian state television. Israel neither confirming nor denying, but its intelligence minister telling Israel Army Radio that the missile attack would be "completely compatible with Israel's policy of stopping smuggling of weapons from Iran to Hezbollah." An Israeli Defense Force spokesman had no comment.
BRIGGS: United Airlines announcing some big changes in the wake of that disturbing incident where a passenger was dragged off a plane earlier this month. The changes include offering up $10,000 to customers who volunteer to give up their seats on overbooked flights. Passengers already in their seats cannot be removed and crew members will be booked on the flights at least an hour before departure. United hopes these changes will help improve customer satisfaction. So far, none of the employees involved in the initialincident have been fired.
[05:55:25] Hollywood and movie fans paying tribute to acclaimed Oscar-winning director Jonathan Demme, who died Wednesday after a battle with cancer. His career in film was defined by its versatility. He made dramas, comedies, concert films, although he's likely best remembered for the 1991 horror film that swept the Oscars, "Silence Of The Lambs".
(BEGIN VIDEO CLIP)
ANTHONY HOPKINS, "SILENCE OF THE LAMBS": A census taker once tried to test me. I ate his liver with some fava beans and a nice Chianti.
(END VIDEO CLIP)
BRIGGS: And who could ever forget that scene? Demme followed that up with "PHILADELPHIA", the first big Hollywood film to tackle the AIDS crisis. It won Tom Hanks his first Oscar. Hanks remembering his friend and his former collaborator as the "grandest of men." Jonathan Demme was 73. A remarkable career.
ROMANS: All right, let's get a check on CNN Money Stream this Thursday morning. Global markets mixed. U.S. futures looking like they're going to move a little higher. Wall Street fell yesterday after two days of big gains. There were solid earnings but that was offset by uncertainty over the president's proposed tax cuts. Not enough information to sustain the rally. Now, the administration may be slashing rates but gave no specifics of how it would be paid for without increasing the deficit and the debt. Expectations of a corporate tax cut had fueled a big rally since the election.
Speaking of earnings, it is a $2 trillion day on Wall Street. Some of the most highly-valued companies in the world issue reports in what will be the busiest day of the earnings season. Look at these names -- Google, Amazon, Microsoft, Comcast, Intel, all releasing today. Together, these six companies are worth more than $2 trillion dollars, and just a small taste of the big names reporting. Earnings seasons has been strong, so far. Companies are doing well. Of the 181 S&P 500 companies that have reported, 77 percent have done better than Wall Street expected.
It's a good time to sell a home, the most profitable in almost 10 years. Homeowners who sold in the first three months of 2017 saw an average gain of $44,000 from purchase. That's the best gain since 2007. This is according to a report from ATTOM Data Solutions who looks at all these numbers. Low supply has helped push up prices where above-asking sales are common. Good news for homeowners but that means buyers have to step up their game in order to compete. I know you've been in the housing market recently.
BRIGGS: For two days --
BRIGGS: -- mine was on the market -- that's it.
ROMANS: Two days, that's it. I now there are 'for sale' signs all over my neighborhood and I know people who are trying to buy are saying they have to put above-asking and they're being outbid a lot.
BRIGGS: And I know in Colorado where I'm from people are almost having to pay cash for these homes --
ROMANS: You know, Colorado --
BRIGGS: -- to compete.
ROMANS: The Denver area, record highs above the pre-crisis peak --
ROMANS: -- and that's a really hot market there, too.
BRIGGS: On fire.
ROMANS: All right. Well, good luck, everybody out there if you're in the housing market. Thanks for joining us. I'm Christine Romans.
BRIGGS: And I'm Dave Briggs. "NEW DAY" starts right now -- enjoy.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: A lot of really good things have happened in that first 100 days.
UNIDENTIFIED MALE: Forty-four percent approve of the job the president's doing but 54 percent disapprove. That is a historic low.
UNIDENTIFIED FEMALE: This should be his high-water mark. It could well be downhill from here.
MNUCHIN: This is going to be the biggest tax cut and the largest tax reform in the history of our country.
UNIDENTIFIED MALE: The only proposals we've seen are posed to help the wealthiest in our nation.
UNIDENTIFIED MALE: He's really handing his Democratic opponents a real sword to come after him with if he's going to ask people to cut taxes for the rich and not show he might benefit.
UNIDENTIFIED MALE: I see great movement when it comes to health care.
REP. PAUL RYAN (R-WI), HOUSE SPEAKER: There is a lot of work left to do but this unified government has made a solid start.
(END VIDEO CLIP)
ANNOUNCER: This is NEW DAY with Chris Cuomo and Alisyn Camerota.
CHRIS CUOMO, CNN ANCHOR: All right. We want to welcome our viewers in the United States and around the world. This is NEW DAY. It is Thursday, April 27th, 6:00 here in New York.
And up first, President Trump says the 100-day mark doesn't really matter and yet, the White House is making a big push to get an identifiable win before the century mark. Among the big-ticket items on the agenda, the president's tax cut wish list. It's not really a plan because it's unclear how it would work, how it would be paid for, and whom it would help. Agreeing to renegotiate NAFTA with Mexico and Canada, and pushing for a vote on a new GOP health care bill.
CAMEROTA: There's also a new CNN poll to tell you about and it shows President Trump with the lowest approval rating of any newly-elected president at this almost 100-day mark. So we have a lot to cover on day 98 of the Trump presidency. Let's begin with CNN's Joe Johns. He is live at the White House. Hi, Joe.
JOE JOHNS, CNN SENIOR WASHINGTON CORRESPONDENT: Good morning, Alisyn.