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McConnell Concedes Defeat On Health Care;Ethics Chief: "Carelessness About Ethics" In White House; Bride-To-Be Killed By Officer After Calling 911; No Word From North Korea On Proposed Talks With The South. Aired 5:30-6a ET

Aired July 18, 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] DAVE BRIGGS, CNN ANCHOR: The Senate Majority Leader concedes defeat on a Senate health care bill in its current form.

The Senate Majority Leader had essentially no choice though after two more Republicans defected from the bill, leaving it without enough support to even begin debate.

CHRISTINE ROMANS, CNN ANCHOR: Late last night, McConnell explained in a statement, "Regretfully, it is now apparent that the effort to repeal and immediately replace the failure of Obamacare will not be successful."

McConnell now making a major pivot, announcing he will push for a new version that will repeal Obamacare outright with a two-year phase-out, so there's time to come up with a replacement system.

McConnell notes that a majority of senators already backed a House repeal bill when it came up in 2015.

BRIGGS: McConnell's statement came just moments after the president posted a tweet along the same lines.

Quote, "Republicans should just repeal failing Obamacare now and work on a new health care plan that will start from a clean slate. Dems will join in."

Fallout from the defection of the two senators McConnell had been counting on came quickly.

Our Ryan Nobles has more on that from Capitol Hill.

(BEGIN VIDEOTAPE)

RYAN NOBLES, CNN WASHINGTON CORRESPONDENT: Dave and Christine, good morning.

This is essentially the worst case scenario for Senate Majority Leader Mitch McConnell.

Two more Republicans senators, Mike Lee of Utah and Jerry Moran of Kansas, have announced that they will not support the latest version of health care reform. That effectively means this bill is dead.

This is what Sen. Lee said in his statement last night.

Quote, "After conferring with trusted experts regarding the latest version of the Consumer Freedom Amendment, I have decided I cannot support the current version of the Better Care Reconciliation Act.

In addition to not repealing all of the Obamacare taxes, it doesn't go far enough in lowering premiums for middle-class families, nor does it create enough free space from the most costly Obamacare regulations."

And Jerry Moran's statement went even further. He said that the Senate needs to start fresh and open up the legislative process. He also said that he would not put his stamp of approval on bad policy.

Now, Senate Majority Leader Mitch McConnell was already in a difficult position. He needed to hold onto all 50 votes. They had hoped that as early as today they'd be voting on the motion to proceed to bring the bill to the floor and it looks as though, at least for now, the Senate version of health care reform has been put on indefinite hold -- Dave and Christine.

(END VIDEOTAPE)

ROMANS: All right, Ryan.

So much to get to. Let's get to it this morning with David Drucker, senior congressional correspondent for the "Washington Examiner."

Here's what Sen. Charles Schumer said here about this.

"Rather than repeating the same failed partisan process yet again, Republicans should start from scratch and work with Democrats on a bill that lowers premiums, provides long-term stability of the markets and improves our health care system."

And then, John McCain, from the hospital, issuing a statement saying, "We must not repeat the original mistakes that led to Obamacare's failure. The Congress must now return to regular order, hold hearings, receive input from members of both parties, and heed the recommendations of our nation's governors so that we can produce a bill that will finally provide Americans with access to quality and affordable health care."

They are back to square one here.

DAVID DRUCKER, CNN POLITICAL ANALYST, SENIOR CONGRESSIONAL CORRESPONDENT, THE WASHINGTON EXAMINER: Square one, yes. Well, let's see what happens over the next 10 days to six, seven weeks. The House bill was dead and was dead for six weeks and, quietly, Republicans were working behind the scenes amongst themselves to craft a compromise which they were eventually able to pass.

It's possible that going home for August recess and getting an earful from their constituents could -- and the time away from Washington could help them find a way to get to something that can get out of the Senate.

So I think it's too soon, just knowing how the process works for these major pieces of legislation work, to write this thing off completely.

ROMANS: All right.

BRIGGS: But as for the notion that President Trump has floated and Mitch McConnell has floated a vote to just clean, repeal now, replace later with a two-year safety net, what would that mean for the American people and for health care in this country?

DRUCKER: Well, look, if they created a situation where they repealed Obamacare but said nothing is going to take effect for two, three, four, five years -- however long they wanted to do it off in the future -- and then spent time crafting a new health care reform bill with changes to be made gradually, in a sense it would be very similar to what Obamacare was.

It was a law that was passed and then, you know, many parts of it were pushed off way into the future.

I think the problem here is political. I think that if the Republicans would have gone with this approach in January -- granted, they didn't want to do that. They talked about it. The votes weren't there.

But let's remember the vote had been there and they had done this when Obamacare was still broadly unpopular, when there was a lot of political momentum to get something done when you didn't have a House or Senate health care bill that was very unpopular, right?

BRIGGS: And mean.

DRUCKER: So if you had done it then -- yes, and mean, and that's what the president said. Had you done it then I think that's the kind of thing that could have worked then.

I think the problem now, not only do we not think the votes are there but you have a House bill and a Senate bill from the Republicans that the polling shows people don't like. Either conservatives think it's too weak and Democrats think it will gut health care.

[05:35:08] And so, the political atmosphere for doing that now is colored by what people think the Republicans are going to do and it makes that more -- it just makes that, I think, next to impossible.

ROMANS: I just -- the whole thing is mind-boggling for what it means for the rest of his agenda. You know, the president was boasting yesterday about, you know, this legislative agenda rivaling only FDR, which is not true, but what does it mean for everything else?

I mean, that's what -- I'm watching the global markets today. There's a concern that this president's aggressive agenda won't happen.

DRUCKER: And when you talk to Republicans, I think their biggest concern here is that it derails tax reform because tax reform is such a heavy lift. So much of the health care system related to taxes and they were looking to use the health care reform bill as a sort of jump-start for the tax reform effort to come later. I think politically, though, what it shows you is how hard it is for the Republicans, number one, to get to yes on big bills. These are tough votes.

You have a lot of competing interests and they can't do it yet on health care. Tax reform is not going to be any easier.

I also think it's showing you the limit of the president's ability to get some of these things done. You know, he's been able to sign a lot of bills that Republicans have been very pleased with.

BRIGGS: Sure, deregulation.

DRUCKER: Deregulation, repealing a lot of the Obamacare -- Obama-era regulations that required legislation for those dismantlings.

ROMANS: Right.

DRUCKER: But so far his ability to negotiate big bills and big deals, that ability has not been there so far -- we haven't seen it.

In the House, when Republicans finally got to yes it was because the White House backed off, in part, and the moderates and the conservatives worked among themselves without the glare and the pressure to get something done and the president was sort of brought in as a ceremonial closer. I'm sure he'd argue with that and say it was more than ceremonial.

But, you know, the issue here is whether he can corral votes, whether he can lead on a legislative front.

BRIGGS: And bogging down that agenda, of course, is this Russia investigation. The drip, drip, drip. The continued evolution of explanations for this Don, Jr. meeting.

And the president was focused on that yesterday morning tweeting this. "Most politicians would have gone to a meeting like the one Don, Jr. attended in order to get info on an opponent. That's politics."

Let's be clear. That is not politics. Democrats and Republicans alike have said that's not a meeting anyone would take.

Sean Spicer offered this explanation in an off-camera briefing yesterday.

(BEGIN VIDEO CLIP)

SEAN SPICER, WHITE HOUSE PRESS SECRETARY: There was nothing that, as far as we know, that would lead anyone to believe that there was anything except for a discussion about adoption and the Magnitsky Act."

(END VIDEO CLIP)

BRIGGS: Now, if there's no crime, if there's no wrongdoing -- and clearly, there is no evidence of any crime yet -- why the continued evolution of explanations? The defenses that vary from day-to-day, hour-to-hour.

DRUCKER: Yes, that was more like a devolution of explanations. That was the original explanation before, you know, the e-mails became public and we knew what, at least, the Russian -- what the Russians in the meeting were billing the meeting was.

So that was an old explanation. I don't understand where Sean Spicer was going there.

Look, I think the important thing here and you hit on it, is just that this is a big distraction and while President Trump may exist very comfortable in chaos -- and I think, you know, if you look over his career as a businessman and an entertainer and in the campaign, I think he thrives in conflict and chaos.

ROMANS: Yes.

DRUCKER: I think it's what he prefers. But it makes it difficult for Republicans on Capitol Hill, who he needs for the big-ticket items that are part of his agenda that are not executive orders, they don't thrive on chaos. They're looking over their shoulder.

It creates a problem where the president is not busy using the power that he has with the Republican base and the broader Republican electorate to sell health care reform or tax reform. They're busy fighting about Russia.

And even on the base, and Republicans generally are sticking with him in the battle against the media --

ROMANS: Sure.

DRUCKER: -- and whether or not there was, you know, evil Russian collusion. For Republicans on the Hill and for any -- and for Independent voters, this is a big mess and it would be much better if they could get this off the table and actually do real boring stuff like, you know --

ROMANS: Boring is better --

DRUCKER: -- policy.

ROMANS: -- as they say in finance. Boring is better.

No -- you know, "The Wall Street Journal" with a remarkable editorial from its editorial board, "The Trumps and the Truth."

"Mr. Trump somehow seems to believe that his outsize personality and social media following make him larger than the presidency. He's wrong. He and his family seem oblivious to the brutal realities of Washington politics.

Those realities will destroy Mr. Trump, his family, and their business reputation unless they change their strategy toward the Russia probe. They don't have much more time to do it."

The "Journal" calling for radical transparency on this.

[05:40:03] BRIGGS: And they went on to shoot down the notion of fake news as well.

ROMANS: On and on and on.

David Drucker, nice to see you. Thank you so much this morning.

DRUCKER: Thanks, guys.

BRIGGS: Thanks, Dave.

ROMANS: All right. After months of clashing with the White House over conflicts of interest, Washington's top ethics watchdog is resigning.

But departing Office of Government Ethics Chief Walter Shaub spending his last few days on the job, telling CNN he still has concerns, starting with the president's frequent trips to his own properties.

(BEGIN VIDEO CLIP)

WALTER SHAUB, DEPARTING DIRECTOR, OFFICER OF GOVERNMENT ETHICS: You see the president essentially giving his own properties free advertisements by traveling there at our expense. You see him holding financial interests that leaves us unable to know whether decisions are motivated by policy aims or by personal financial interest.

And we've seen sort of a level of carelessness about ethics on the part of senior appointees. I don't know that I'd go so far as to say in most cases they're intentionally pushing the envelope, but it's that a message has been sent from the top and the tone from the top is everything in ethics.

(END VIDEO CLIP)

ROMANS: Shaub says he has done all he can in the current circumstances but he plans to keep up the fight. His resignation goes into effect tomorrow, Dave.

BRIGGS: All right. Ahead, a man left searching for answers after police shoot and kill his fiance in Minnesota.

(BEGIN VIDEO CLIP)

DON DAMOND, FIANCE OF JUSTINE RUSZCZYK: Our hearts are broken and we are utterly devastated by the loss of Justine.

(END VIDEO CLIP)

BRIGGS: Authorities, so far, slow to provide information. We'll have a report from Minneapolis, next.

(COMMERCIAL BREAK) [05:45:49] BRIGGS: A Minneapolis police officer involved in the shooting death of a woman who called 911 for help is now coming forward and offering his condolences to her family. That officer identified through his attorney as Mohamed Noor.

Meantime, stunned family and friends of Justine Ruszczyk making desperate pleas for information about the last moments of her life.

CNN's Ryan Young has the latest from Minneapolis.

(BEGIN VIDEOTAPE)

RYAN YOUNG, CNN NATIONAL CORRESPONDENT: Christine and Dave, a lot of people asking questions about exactly what happened and, of course, this shooting has really terrified a lot of people. You see signs like this one, why did you shoot and kill our neighbor and a friend.

We do know that phone call was made by Justine. She called 911 because she believed back in this alleyway that she thought she saw a sexual assault going on.

When she called 911 two officers arrived. They did not activate their body camera. They did not have their car dash camera on.

We do know at some point a shot was fired, she was hit and died, and it's really tearing apart her family.

DAMOND: Piecing together Justine's last moment before the homicide would be a small comfort as we grieve this tragedy. The death of Justine is a loss to everyone who knew her. She touched so many people with her loving and generous heart.

YOUNG: There was a statement released by the officer's attorney. It says that Officer Mohamed Noor extends his condolences to the family and anyone else who has been touched by this event. He takes her loss seriously and keeps them in his daily thoughts and prayers.

We've also learned from the medical examiner's office that she was shot once in the abdomen and that was the fatal shot where she died just out here.

Again, most of the community members out here want to know exactly what happened. They're waiting to hear from police to get those extra details -- Dave and Christine.

(END VIDEOTAPE)

ROMANS: An awful story. All right. Ryan, thanks for following it for us.

The Republicans' failure to repeal and replace Obamacare shaking global markets. We're going to check on how stocks are reacting on "CNN Money."

(COMMERCIAL BREAK) [05:51:57] BRIGGS: So far, no word from North Korea on whether it will accept the South's unexpected offer to hold talks to diffuse the international standoff over the North's missile program.

As South Korea waits, House Majority Leader Kevin McCarthy telling CNN that he wants new sanctions on the North, echoing calls by Japan and the E.U. to ramp up pressure.

All this as we are learning more on how the sale of luxury goods inside North Korea is connected to a secret slush fund for Kim Jong Un.

CNN's David McKenzie live in Seoul with more on this intriguing story. Good morning to you, David.

DAVID MCKENZIE, CNN INTERNATIONAL CORRESPONDENT: Good morning, Dave.

Yes, these olive branches coming from South Korea toward the North are military-to-military and humanitarian talks that they are proposing. Talks could happen as soon as this Friday but it is important to note that the North Koreanshave to play ball. They have to say yes, we want talks.

And the South Korean strategy is making them take a different tact than the U.S., which is looking to push further punishing sanctions, in part because of the money flow that is going into North Korea to develop their weapons program.

And a story that we've been working on around these images. This luxury store in Pyongyang where North Koreans -- elite North Koreans loyal to Kim Jong Un can spend thousands of dollars to getting luxury goods that are banned often by the sanction's regime.

Now, it seems that these goods are going through traders throughout the region into North Korean and that's one of the reasons that the U.S. wants to clamp down on this because the money, says one defector who we spoke to, goes directly to the missile program -- Dave.

BRIGGS: Of course, some feel the sanctions, David, from the House are just a way to delay the Russian sanctions on delay on orders of the White House. So we'll continue to stay on all this.

David McKenzie live for us. Thank you.

ROMANS: All right. The U.S. dispensing a mixed message on Iran's nuclear compliance, certifying that Iran is still making good on the terms of the nuclear deal.

The Trump administration says Iran's non-nuclear activities show its, quote, "unquestionably in default of the spirit of the agreement."

Both the president and Secretary of State Rex Tillerson have been fierce critics of the deal. A senior administration official said they are considering more sanctions targeting Iran's ballistic missile program and state sponsorship of terrorism. BRIGGS: Staying with the sanctions theme, President Trump offering assurance to nervous residents of Venezuela, saying in a sharply- worded statement overnight, the United States will not stand by as Venezuela crumbles.

Trump adding that if President Nicolas Maduro regime imposes its so- called constituent assembly on July 30th the United States will take what he calls strong and swift economic actions.

Opposition leaders say the constituent assembly will be a puppet of the regime. The tough talk coming a day after participants in a nonbinding opposition referendum overwhelmingly voted for a presidential election and against this imposed assembly.

[05:55:00] ROMANS: Yes, the economic crisis there just really severe.

All right. Let's get a check on "CNN Money Stream" this morning.

Global reaction to the failure of Republicans' effort to repeal and replace Obamacare, global stock markets falling overnight.

Big questions this morning about the future of the entire Trump economic agenda.

The U.S. dollar falls to its lowest level since September.

The Wall Street stocks, hanging up here very close to record highs driven by fat corporate profits more than anything else.

And investors are gearing up for more earnings reports today. Goldman Sachs, Bank of America, United, and IBM all report.

Wow, Netflix stock surging 10 percent overnight after reporting millions of new subscribers. The company added five million new subscribers in Q2, most of them, by the way, overseas.

In fact, Netflix now has more subscribers outside of the U.S. That's a big growth part here.

You know, the boost in sign-ups was driven by some of its best-known series. "HOUSE OF CARDS," "ORANGE IS THE NEW BLACK," "MASTER OF NONE" all came out last quarter, all of them very big draws. This is really a golden age of programming and Netflix really doubling down on its own original programming here.

Amazon could be joining the meal kit delivery business and that's bad news for Blue Apron. Blue Apron plunged as much as 11 percent after Amazon filed to trademark a prepared food kit service.

Competition in the industry is already tough. Amazon has a history of destruction, as you know. Blue Apron was the first meal kit company to go public but it's down in value about one-third since it IPO last month.

Have you used one of these meal kits?

BRIGGS: I have not but it's time.

ROMANS: I like it, I like it.

BRIGGS: No one is safe when Amazon gets in.

ROMANS: I don't use Blue Apron. I do -- I do a different one but I do -- I do like it. I mean --

BRIGGS: I mean, you get everything sent to you, correct?

ROMANS: You get everything sent to you to try new things. You know, you don't have to shop. You know, it's not for every meal.

BRIGGS: But you've got to get the kids on board and that ain't easy --

ROMANS: Yes, yes.

BRIGGS: -- with new recipes.

ROMANS: No. That's the hardest part of it, actually.

Thanks for joining us. I'm Christine Romans.

BRIGGS: I'm Dave Briggs.

A major shift in the Republican strategy on health care. The new plan, repeal now, replace sometime later.

"NEW DAY" starts right now. We'll see you tomorrow.

ANNOUNCER: This is CNN breaking news.

CHRIS CUOMO, CNN ANCHOR: All right. Welcome to our viewers in the United States and around the world. This is NEW DAY. It's Tuesday, July 18th, 6:00 here in New York.

And we begin with breaking news.

The Republican effort to repeal and replace Obamacare collapses. That leaves a huge amount of doubt about the stability of health care for millions of Americans. Pricing, access could be negatively affected.

The final straw for the bill came when two more senators announced their opposition to this effort.

President Trump had a late-night dinner to try work a deal but fell short.

We have seen the markets drop around the world in response overnight.

ALISYN CAMEROTA, CNN ANCHOR: So, the president and Senate Majority Leader Mitch McConnell acknowledging defeat and they're now pushing for a straightforward repeal without a replacement plan.

How did all of this fall apart? We have it all covered for you. Let's begin with CNN's Suzanne Malveaux. She is live on Capitol Hill. Give us the latest, Suzanne.

SUZANNE MALVEAUX, CNN CORRESPONDENT: Good morning.

Well, as President Trump approaches his six-month mark in his presidency with record low approval ratings this devastating blow now to his number one legislative priority and also the promise that Republicans made to both repeal and replace Obamacare.

(BEGIN VIDEOTAPE)

MALVEAUX (voice-over): Senator Majority Leader Mitch McConnell giving up on Republicans' seven-year effort, now pushing to repeal Obamacare without a replacement plan in place.

The latest effort collapsing after two more Republican senators announced their opposition to the bill simultaneously on Monday night, ensuring that the plan would fail.

McConnell still planning to hold a vote in the coming days on a 2015 measure that would repeal Obamacare but delay it taking effect for two years while a replacement bill is crafted.

President Trump responding to the setback on Twitter, tweeting, "Republicans should just repeal failing Obamacare now and work on a new health care plan that will start from a clean slate. Dems will join in."

(Audio gap) -- the fact that a straight repeal has (audio gap) no chance of passing and it could leave millions uninsured and the insurance markets in turmoil.

The president's proposal starkly different from the promise he made on the campaign trail.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Obamacare is a disaster.

Repeal it and replace it.

Repeal and replace.

Repeal and replace Obamacare.

We're going to repeal it, we're going to replace it, we're going to get something done.

MALVEAUX: President Trump was trying to drum up support for health care, hosting a handful of senators at a White House dinner Monday night as senators Lee and Moran announced their opposition.

The president expressing optimism earlier in the day.

TRUMP: The Republican senators are great people but they have a lot of different states. Some states need this, some states need that but we're getting it together and it's going to happen. Right, Mike?

MIKE PENCE, VICE PRESIDENT OF THE UNITED STATES: Yes, sir. I think.