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EARLY START

Donald Trump Jr. Admits Meeting with Russian Lawyer; Cyber Security with Russia Gets Backlash; Mnuchin: Tax Reform to Pass This Year; Senate Back on Health Care Reform; Victory Declared in Mosul. Aired 4-4:30a ET

Aired July 10, 2017 - 04:00   ET

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


[04:00:12] CHRISTINE ROMANS, CNN ANCHOR: President Trump's son, Donald Trump Jr., now admitting he met with a Russian lawyer with ties to the Kremlin in an effort to help the Trump campaign. That startling admission is now raising a big question, is this evidence of collusion?

DAVE BRIGGS, CNN ANCHOR: President Trump now appearing to walk back his agreement with Russia to create a cyber security unit. What's about this sudden face all about? This is interesting development over the weekend.

ROMANS: It sure is.

BRIGS: Good morning and welcome to EARLY START. I'm Dave Briggs.

ROMANS: And I'm Christine Romans. It's nice to see you all this morning. It is Monday -- Monday, July 10th. It is 4:00 a.m. in the East and a lot to get to this morning.

President Trump's eldest son now admitting he met with a Russian. He says he was told could help his father's campaign. Donald Trump Jr. responding to a report from "The New York Times" that he was "promised damaging information about Hillary Clinton before agreeing to meet a Kremlin-connected Russian lawyer during the campaign." That meeting held in early June, two weeks after Mr. Trump clinched the nomination.

BRIGGS: In attendance, senior adviser Jared Kushner, then-campaign chairman Paul Manafort, Don Jr., and the Russian lawyer Natalia Veselnitskaya -- I'm just going to let that go and let you figure it out later. It's the first known meeting between several top members of Trump's team and a Russian national during the campaign. It goes to the fundamental question facing the FBI congressional investigators looking into Russia's interference in the campaign. Did the Trump campaign conclude with Russians in an effort to hurt Clinton and win the White House?

ROMANS: So, Trump Jr. responding with a statement to CNN. It says in part, "I was asked to have a meeting by an acquaintance I knew from the 2013 Miss Universe pageant with an individual who I was told might have information helpful to the campaign. After pleasantries were exchanged, the woman stated that she had information that individuals connected to Russia were funding the Democratic National Committee and supporting Ms. Clinton. Her statements were vague, ambiguous, and made no sense. My father knew nothing of the meeting or these events."

Don Jr. has been a vocal critic of accusations there was collusion between the Trump campaign and Russia, even tweeting on June 8th, one day before the meeting, "Thanks James Comey debunks NYT reports about Trump campaign having repeated Russian contacts." And here's what Don Jr. told our Jake Tapper in July when he was asked about collusion.

(BEGIN VIDEO CLIP)

DONALD TRUMP, JR., PRESIDENT TRUMP'S ELDEST SON: Well, it just goes to show their exact moral compass. I mean, they'll say anything to be able to win this. I mean, this is time and time again, lie after lie. You know, he won't say, well I say this, we hear experts, you know, his housecat at home once said that this is what's happening with the Russians. It's disgusting. It's so phony.

(END VIDEO CLIP)

ROMANS: For more on the meeting and why this Russian lawyer asked for it, let's bring CNN's Elise Labott in Washington.

ELISE LABOTT, CNN GLOBAL AFFAIRS CORRESPONDENT: Well Dave, Christine, Donald Trump Jr. says that he and two other senior members of the Trump team met a year ago with a Russian lawyer who claims she had damaging information on Hillary Clinton. Now he says the meeting was set up by an acquaintance from the 2013 Miss Universe pageant that was held near Moscow. And that acquaintance told Trump Jr. that the individual might have information helpful to the campaign.

Now this person turned out to be a Russian lawyer who started the meeting saying she had information that individuals connected to Russia were funding the Democratic National Committee to help Hillary Clinton. Now Trump Jr. said this woman didn't bring any evidence, saying her statements were "vague, ambiguous, and made no sense." And he said he quickly realized that she was using Hillary Clinton as a pretext to talk about U.S. policy.

Now, the attorney, Natalia Veselnitskaya, formed a group who was purporting to seek the removal of an adoption ban on Russian children to the U.S. that was put in place years ago as retaliation for an American law passed in 2012. Now that law is known as the Magnitsky Act which imposed sanctions over senior Russian officials thought to have violated human rights. And Ms. Veselnitskaya has also sought the repeal of that legislation.

This could be of interest to Special Counsel Robert Mueller whose investigation is looking into contacts between Russia and the Trump campaign and allegations of collusion which President Trump has denied, Dave and Christine.

ROMANS: All right, Elise Labott for us in Washington. Thank you for that. The White House fighting back against the bipartisan furor sparked by President Trump's meeting with Vladimir Putin.

[04:05:00] Over the weekend the president appeared to agree with Putin's assessment that Russia did not meddle in the U.S. election, tweeting this, "I strongly pressed President Putin twice about Russia meddling in our election. He vehemently denied it. I've already given my opinion." Even the president's closest allies are distancing themselves from his position on Russia's election meddling. Listen to U.N. Ambassador Nikki Haley.

(BEGIN VIDEO CLIP)

NIKKI HALEY, U.S. AMBASSADOR TO TH UNITED NATIONS: Everybody knows that Russia meddled in our elections. Everybody knows they're not just meddling in the United States election. They're doing this across multiple continents and they're doing this in a way that they're trying to cause chaos within the countries.

(END VIDEO CLIP)

BRIGGS: Plenty of questions this morning. Why can't President Trump bring himself to say what Ambassador Haley and others are proclaiming about Russia's election meddling? Here's former CIA Director John Brennan.

(BEGIN VIDEO CLIP)

JOHN BRENNAN, FORMER CIA DIRECTOR: I don't think he demonstrates good negotiating skills when it comes to Mr. Putin. Again, two days before in Warsaw, he gives Mr. Putin the opportunity to point to the failures of U.S. intelligence. To me I think he ceded that ground. Ana also right before he met with Mr. Putin and talked with him at some length, which I'm glad he did, he said it's an honor to meet President Putin. An honor to meet the individual who carried out the assault against our election? To me, it was a dishonorable thing to say.

(END VIDEO CLIP)

BRIGGS: All right, for more on the (INAUDIBLE) from the president's meeting with Putin, let's bring in CNN White House correspondent Athena Jones.

ATHENA JONES, CNN WHITE HOUSE CORRESPONDENT: Good morning, Christine and Dave. After two days of confusion over the contradictory readouts provided by the two sides, the U.S. and the Russians, after that lengthy sit down between President Trump and Russian President Vladimir Putin, the White House is finally setting is the record straight. Chief of Staff Reince Priebus refuting the Russians' claims that President Trump took President Putin at his word when Putin denied Russian meddling in last year's election. Take a listen to what Reince Priebus said on "Fox News Sunday."

(BEGIN VIDEO CLIP)

REINCE PRIEBUS, WHITE HOUSE CHIEF OF STAFF: The president absolutely did not believe the denial of President Putin. What the president did is he immediately came into the meeting, talked about Russian meddling in the U.S. election, went after that issue at least two separate times. This was not just a five-minute piece of the conversation. This was an extensive portion of the meeting.

(END VIDEO CLIP)

JONES: Now, Priebus' comments came a day after several administration officials given multiple opportunities to correct the record, to refute Putin's claim, declined to do so. Back to you.

ROMANS: All right, Athena Jones at the White House. Thank you Athena.

President Trump now appears to be backing away from the idea of forming a cyber security unit with the Kremlin. Sunday morning he tweeted, "Putin and I discussed forming an impenetrable cyber security unit so that election hacking and many other negative things will be guarded." A cyber security unit with the Russians accused of meddling in America's elections.

But by last night, a seeming about face, "The fact that President Putin and I discussed a cyber security unit doesn't mean I think it can happen. It can't. But a ceasefire can and did." President Trump is referring to a ceasefire in southwest Syria he negotiated with Putin, a ceasefire that appears, Dave, to be holding.

BRIGGS: That news didn't help him escape the criticism for floating the idea of a joint cyber security arrangement with the Russians. Republican Senator Marco Rubio tweeting, "Partnering with Putin on a cyber security unit is akin to partnering with Assad on a chemical weapons unit." Republican Senator Lindsey Graham also weighing in saying, "It's not the dumbest idea I've ever heard but it's pretty close." And this from former Defense Secretary Ash Carter.

(BEGIN VIDEO CLIP)

ASH CARTER, FORMER SECRETARY OF DEFENSE: The Russians pulled out the old playbook. I've seen all this going back to Russian and Soviet days. When confronted with something they've done wrong, ask for U.S. intelligence old trick. Propose a working group -- in this case on cyber. But this is like the guy who robbed your house proposing a working group on burglary. It's they who did this.

(END VIDEO CLIP)

BRIGGS: All right, for more on the prospect of a U.S./Russia cyber security team and what President Trump did or did not say to Vladimir Putin, let's go live to Moscow and bring in CNN's Matthew Chance. Good morning to you Matthew. When you take all of this in context, is it being seen as a big win there in Moscow?

MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, the way the Kremlin is characterizing it is that it was a win for both sides. The Kremlin spokesman late last night, Dimitri Peskov, said that take it from me, Vladimir Putin is satisfied with the outcome of his meeting and well they should be because they went into this first face-to-face meeting between the two presidents with very low expectations.

I mean the Russians were very apprehensive about it. They knew the domestic political situation there in the United States has made the Russia issue toxic for President Trump. [04:10:03] And state media which is often a conduit for the views of

the Kremlin before the meeting took place was saying, look, if we can even agree for a second meeting, that would be considered a success by the Kremlin. So anything other than the abject failure would have been welcomed. And of course, in the event, we now know it was much more than that. It went on for 2.25 hours, 2 hours, 16 minutes. And the two leaders discussed the core issues at the heart of that troublesome relationship between the United States and Russia.

That was way more than the Kremlin had hoped for. So yes, they've been welcoming it very much. In terms of the issue of the working group on cyber security, Sergey Lavrov, the Russian foreign minister said, look, this is important. Cyber security, counterterrorism, organized crime, these are the areas where the United States and Russia should be working together.

BRIGS: Matthew Chance, live for us in Moscow. Thank you.

ROMANS: The Trump administration still wants to pass tax reform this year, this year. And the treasury secretary Steven Mnuchin says a plan is on its way.

(BEGIN VIDEO CLIP)

STEVEN MNUCHIN, U.S. TREASURY SECRETARY: Our plan is to have a full- blown release of the plan in the beginning of September with being able to vote and getting this passed before the end of the year.

(END VIDEO CLIP)

ROMANS: So, many experts say full tax reform in 2017 will be difficult, but Steven Mnuchin says the administration wants the full package, corporate tax cuts, simpler tax brackets for individuals, and a focus on middle-income tax cuts. However, analysts say the current plan mostly benefits wealthy Americans. Mnuchin counters this. He says eliminating deductions keeps the rich from getting a huge tax cut.

(BEGIN VIDEO CLIP)

MNUCHIN: We will reduce and eliminate almost every single deduction. So that means that people who were in the high tax states will have no tax reduction.

(END VIDEO CLIP)

ROMANS: Right now Americans can write off high local taxes in states like New York, Connecticut, New Jersey, California, but the White House's proposal discards all deductions except for those for mortgage interests and charity. The idea is to offset the revenue loss to cuts.

However, it's not just the wealthy that benefit from deductions. The Tax Foundation found it helps the majority of middle-class filers, as well. But that's a pretty tall order, tax reform by this year.

BRIGS: And will this be revenue neutral? Do we -- are we led to believe or is that just counting on the massive growth that it would generate?

ROMANS: No, counting on the massive growth they say it's going to generate and unleash in the economy.

BRIGGS: But getting through health care is going to have to happen first.

All right, Senate Republicans are back on Capitol Hill today. Are they any closer though to a health care plan? Next, we'll tell you why one leading Republican says the GOP should be ashamed of not passing health legislation.

[04:15:00] (COMMERCIAL BREAK)

BRIGGS: Welcome back. Senate Republicans returning from the holiday recess this morning and ready to get back to work on health care reform. But it seems no one is optimistic about getting a plan passed. One idea back on the table now that's repealing Obamacare without immediately replacing it. Republican Senator Bill Cassidy, a physician, calling that idea being pushed by the president a non- starter.

ROMANS: And this from Iowa GOP Senator Chuck Grassley, "52 Republican senators should be ashamed that we have not passed health reform by now. We won't be ashamed. We will go from majority to minority." One thing is clear, Republicans can't seem to get on the same page when it comes to reforming health care. Listen to Senators Ted Cruz and John McCain on the prospects for getting a deal done.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), ARIZONA: If you shut out the adversary or the opposite party, you're going to end up the same way Obamacare did when they rammed it through with 60 votes, only guess what, we don't have 60 votes. To my view, it's probably going to be dead.

SEN. TED CRUZ (R), TEXAS: If we can't get this done right now, I agree with the president, then let's honor the promise on repeal and spend more time to get it done. I believe we can get it done. I think there's an agreement. My objective for the last six months helping lead the working group on health care has been to reach consensus to bring together and unify the Republican conference and the way we do it is focusing like a laser.

(END VIDEO CLIP)

BRIGS: President Trump sounding like it's now or never on twitter late last night tweeting, "For years even as a civilian I listened as Republicans pushed the repeal and replace of Obamacare. Now they finally have their chance."

ROMANS: All right, 18 minutes past the hour this Monday morning. Iraq is declaring a significant victory in the liberation of Mosul this morning. The Iraqi military rolling back one of ISIS biggest victories. We're going to CNN's Nick Paton Walsh in Iraq on the ground for us next. [04:20:00] (COMMERCIAL BREAK)

ROMANS: Iraq is declaring victory in Mosul. Prime Minister Haide al- Abadi has started congratulating soldiers on the great success of their eight-month push to drive ISIS out of the country's second largest city. The prime minister's office putting out a statement saying this, "The remaining pockets of ISIS are encircled in the last inches of the city. It is a matter of time before we declare to our people the great victory." Al-Abadi says the Iraqi soldiers are fighting to free civilians whom ISIS has been using as human shields.

CNN's Nick Paton Walsh is on the ground. He's got the latest for us from Mosul.

NICK PATON WALSH, CNN SENIOR INTERNATIONAL CORRESPONDENT: The Iraqi Prime Minister Haider al-Abadi arriving in Mosul last night to declare victory here, to speak of its liberation. We've seen him roaming the streets, talking to the normal residents here in the east of the city, appealing to them to go back to work, to go back to their jobs. And really, I think Iraq is in full celebration mode. You will see people dancing in the streets with soldiers.

A real sense I think that after enduring an eight-month slog in Mosul to rid themselves of ISIS, Iraqi troops have now reached the river that runs through the city that marks the back end of ISIS territory here, raising the flag there, as we've been seeing on social media. And although there are some small pockets of ISIS, since last night were holding out, really the moments I think is now where for Iraq has to reflect upon the sacrifice it's made. The sacrifices made for the world, frankly, to kick ISIS out of its territory.

Haider al-Abadi making sure many feel the appreciation his government has for the work and the blood that's been lost in that goal. But much more complicated task potentially socially ahead of Iraq here. They have quickly to begin to heal the rift between the Sunni ethnic group and the Shia ethnic group. The Sunnis once with the minority ruling under Saddam Hussein.

Now they find themselves marginalized, they're extremists, feeling empathy toward ISIS, letting them get a foothold, and the Shia who predominantly in the government and military now.

[04:25:11] They have to heal somehow, but it's important not to lose sight of this moment. It is important for Iraq, for its sacrifice, for what it's done to make the world potentially safer as well, from ISIS and Iraqi Prime Minister Haider al-Abadi certainly here to be sure that is not missed. Back to you.

ROMANS: Wow. Three years of occupation of that city. Just an amazing, amazing move now.

BRIGGS: Yes, and it's not just uniting those two groups but how you rebuild Mosul. I mean, you talk about billions of dollars just for infrastructure alone. It is a pile of rubble, but a great accomplishment. Up next, President Trump's son admitting he met with the Russian lawyer with ties to the Kremlin. But does this meeting really rise to the level of collusion? We'll discuss, next.

(COMMERCIAL BREAK)

[04:30:05] BRIGGS: President Trump's son, Donald Trump, Jr. now admitting he met with a Russian lawyer with ties to the Kremlin in an effort to help the Trump campaign.