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EARLY START

Obamacare Repeal Vote Fails 51-49; Chaos and Infighting at White House; Relatives of U.S. Diplomats Ordered to Leave Caracas. Aired 4-4:30a ET

Aired July 28, 2017 - 04:00   ET

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


[04:00:15] ANNOUNCER: This is CNN breaking news.

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL (R-KY), MAJORITY LEADER: This is, you know, clearly a disappointing moment.

(END VIDEO CLIP)

CHRISTINE ROMANS, CNN ANCHOR: This dramatic moment -- right there, thumbs down, crystallizing a stunning night on Capitol Hill.

Republican efforts to repeal Obamacare failed. An early morning vote in the Senate came down to a single vote, and guess which senator -- guess which one -- casts the deciding vote.

Good morning and welcome to EARLY START. I'm Christine Romans.

DAVE BRIGGS, CNN ANCHOR: I'm Dave Briggs. It is Friday, July 28th. That's the day Republicans and Democrats in Congress will not soon forget. Four a.m. in the East.

And breaking news this morning on Capitol Hill, Senate Republicans going into the wee hours trying to repeal and replace Obamacare. That vote coming up short when the maverick made his mark. Senator John McCain just days removed from his cancer diagnosis stunning the chamber, turning thumbs down on the repeal bill. It happened just feet away from Mitch McConnell, prompting an audible gasp in the chamber.

ROMANS: Seven years of repeal efforts, seven years of repeal efforts have essentially gone up in smoke, leaving a frustrated McConnell to explain on the floor.

(BEGIN VIDEO CLIP)

MCCONNELL: I and many of my colleagues did as we promised and voted to repeal this failed law. We told our constituents we would vote that way, and when the moment came, when the moment came, most of us did.

(END VIDEO CLIP)

ROMANS: Two other Republicans senators, Maine's Susan Collins, and Alaska's Lisa Murkowski, they joined McCain, crossing party lines to vote against the repeal bill.

So, how did this go down behind the scenes and where do GOP leaders go from here? Let's go live to CNN's Phil Mattingly, still on the Capitol Hill -- still at the Capitol for us this morning on Capitol Hill.

Good morning.

PHIL MATTINGLY, CNN CONGRESSIONAL CORRESPONDENT: Yes, good morning, Christine.

Look, as you noted, seven years of campaign promises really all came down to one man. It was Senator John McCain. It was hours of behind- the-scenes jockeying. Senator Majority Leader Mitch McConnell, Vice President Mike Pence, and at one moment, even the president putting a call in to Senator McCain trying to sway his vote. Guys, it didn't work. Becoming the third Republican to vote no, essentially sinking the repeal effort entirely.

Again, we've talked about this throughout the last couple of weeks, how the process has gone forward, kind of slimming down bill after bill after bill, trying to get a bare-bones option just to send over to the House to have a conference committee. In the end, that ended up not being enough.

Take a listen to what the leaders in the Senate of both parties had to say after the vote.

(BEGIN VIDEO CLIP)

MCCONNELL: I imagine many of our colleagues on the other side are celebrating -- probably pretty happy about all this. Our friends on the other side decided early on that they didn't want to engage with us in a serious way, in a serious way, to help those suffering under Obamacare.

SEN. CHUCK SCHUMER (D-NY), MINORITY LEADER: It's time to turn the page. I would say to my dear friend, the majority leader, we are not celebrating. We are relieved that millions and millions of people who would have been so drastically hurt by the three proposals put forward will at least retain their health care.

(END VIDEO CLIP)

MATTINGLY: And, guys, an hour after the vote failed, president Trump taking to Twitter saying, quote: Three Republicans and 48 Democrats let the American people down. As I said from the beginning, let Obamacare implode, then deal. Watch."

I think it's important for context -- the idea how rare this was, how dramatic this moment was. Not only did it happen at 1:30 in the morning, but that the idea that the majority leader would put a bill on the floor that would then fail, let alone a bill that they've campaigned on for seven years, let alone a bill that they've worked day after day after day, month after month after month. It is a huge moment. It is a huge moment for the president's agenda.

It is a huge moment for the Republican Party in general. It is a huge failure that we've seen multiple times.

They seem to be able to revive after the failure occurs. Let me tell you what a Senate GOP aide who was working directly on health care told me a short while ago. This is a kill shot to the repeal efforts. That's what the aide said.

They said currently aides who have been working on this are sitting around with stunned exhaustion. They thought they could get there. In the end, they simply couldn't sway McCain.

But, again, just a look at the broader picture. If you think about the fights that have gone on about the issue year after year after year, at least at the moment, there is no clear path forward, no clear effort that will be maintained. There is very clearly a need to do something for the marketplace.

[04:05:02] But the repeal efforts at least as we know them right now, at least talking to Senate GOP aides, they're dead, guys.

ROMANS: Kill shot.

BRIGGS: Yes. And you talk about a seven-year effort. Phil, this bill was unveiled at 10:00 p.m. Eastern Time. Seven years to think of a replacement. It's unveiled just hours before a vote.

You say it came down to one man. It certainly did in John McCain. What about those two women? One Susan Collins who was always a no. Lisa Murkowski, who the president directly took on Twitter, how did that backfire?

MATTINGLY: Look, it did. There's no question about it. It's important to note. Susan Collins from Maine, Lisa Murkowski of Alaska were noes on the procedural vote earlier in the week. They know Susan Collins wasn't gettable. There was a big push to get Lisa Murkowski.

But as you noted, the president had his interior secretary call both Lisa Murkowski and Dan Sullivan, her colleague from Alaska, and essentially say, Lisa Murkowski's vote is threatening what the Interior Department is willing to do for Alaska.

ROMANS: Wow.

MATTINGLY: That's not a great move for somebody who's independent like Lisa Murkowski. So, in the end, no matter the effort, whether it was kind of twisting arms or whether it was trying to be nice as well, didn't work. Things are moving on, guys.

ROMANS: What about the why? Why did McCain vote no? Why the thumbs down? He -- essentially, he didn't think that Paul Ryan and the House would be able to get something satisfactory through conference committee?

MATTINGLY: That's essentially how he ended it. Look, when he was walking out, he told reporters it was the right vote. In his statement, though, he made very clear, this was all about getting to the conference committee.

There was very real concern not just among the senators that voted no, but among almost all the senators in the conference that at some point, the House would just pass this bare-bones bill. Nobody was trying to act like this was repeal and replace. This was clearly a vehicle just to get to conference.

Speaker Paul Ryan in this statement earlier and yesterday said they were willing to go to conference. He thought that would be an assurance enough. It wasn't. So, he placed personal phone calls to a lot of senators, saying, I promise you, this will go to conference. In the end, in his statement, Senator John McCain saying that wasn't enough. The risk was too real that this would end up being passed into law. Guys, that's exactly why he voted no.

BRIGGS: And now, they turn the page perhaps to tax reform. But up first, Phil, don't they have to allow John McCain now, ironically, to take up defense authorization?

ROMANS: Yes.

MATTINGLY: I mean, that was the plan, that was the strategy. But there's another interesting element, guys, if you want to talk about the drama over the course of last couple of hours, Senator McConnell was going to pick up the National Defense Authorization Act. That was what was next on the Senate floor.

Senator Rand Paul objected to that on the Senate floor. It wasn't expected. I'm told leadership aides didn't know it was coming. I'm told Senate Armed Services aides didn't know it was coming.

The idea was to let Senator McCain manage the bill he was overseeing. This -- at least for the moment this was going to be his last big effort before he started treatment. By all accounts, Senator McCain starts treatment back in Arizona next week.

So, there's a big question, when do they take the NDAA? Will Senator McCain be back for it? And why did Senator Rand Paul do this on the floor?

Some are wondering if it was out of spite, confusion. He said there are serious issues that he has with the bill, as well. But, yes, the NDAA was next. This is Senator McCain's bill. This is, as one aide told me, his baby, and that was blocked.

So, all of this coming together kind of in a dramatic kind of view on the floor. These are the things that usually happen behind the scenes, in Senator McConnell's office. We saw it all tonight which was pretty amazing.

ROMANS: All right. Gosh, Phil, thank you so much. We'll talk to you again very, very soon. Thanks for bringing us up to speed on all the drama behind the scenes. Let's bring in Kimberly Leonard, senior health policy reporter for

"The Washington Examiner." And, guys, if our producers could put up the president's statement again, if you had that there where he talked about just letting it implode and then make a deal. This is what the president said: Three Republicans and 48 Democrats let the American people down. As I said from the beginning, let Obamacare implode, then deal. Watch.

OK. So, Kimberly, my question to you is, in three months, Obamacare open enrollment begins. Ten million people have to choose their plans. And of the 22 million people will get fines if they don't get into the health care system.

Obamacare is still the law of the land. Will it implode if Congress does nothing?

KIMBERLY LEONARD, SENIOR HEALTH POLICY REPORTER, WASHINGTON EXAMINER: It's still the law of the land, but it has tremendous obstacles to overcome before open enrollment. We have about 40 counties across the country that have zero insurers to buy subsidized coverage from.

And then insurers are also saying, you know what, there's too much uncertainty. We're either going to withdraw from different markets, or we're going to raise our rates significantly.

And so, if you don't receive subsidies, you're looking at potentially paying quite a lot more for insurance heading into 2018.

BRIGGS: Ironically, it was this Republican effort that made Obamacare more popular than ever, polling at the most recent 50 percent. But what does it need to fix it?

LEONARD: Well, it depends who you ask. A lot of Democrats would say that it's time to go ahead and inject more funding into the programs. They suggest, for example, a reinsurance program. That's something that could gain some bipartisan support. What that would do is it would allow federal funding to go toward payments for the more expensive, costly enrollees so that premiums don't go up for everyone else.

[04:10:05] They could also guarantee those cost-sharing reduction subsidies that President Trump has been paying out every single month. And some say that when he talks about letting it implode, that perhaps he won't allow those payments to go through. If he doesn't, that's a pretty damaging option. And insurers without those payments are very unsure about participating for next year.

ROMANS: What happens to people who get insurance through the vast -- the vast majority of people get their insurance through their own company? Clearly, those premiums are rising. Those costs are rising. I mean, all of us know, everyone's paying more for health care.

BRIGGS: No question.

ROMANS: The whole problem, it's not just Obamacare on its own. I mean, health care costs are going up. The whole thing is just a wreck.

LEONARD: Exactly. And so much of the policy conversation on Capitol Hill has focused so much on the financing of health care and not the actual cost.

ROMANS: Right.

LEONARD: I have yet to see policies come up that would really address that. And it's really unclear that there's a willingness to do that because it would mean that you'll have objection says from the pharmaceutical industry, the hospital industry, doctors. And so, addressing medical costs is going to be politically difficult.

BRIGGS: Really silence on prescription drug reform.

ROMANS: Yes. The Democrats -- the Democrats say that's part of their new --

BRIGGS: They say that. Let's see a bill, right? A better deal, of course.

What is there if anything that Republicans and Democrats do agree on regarding the all-important issue of health care?

LEONARD: Well, there are certain parts of Obamacare that they would be willing to alter, you know? Republicans altering it might be to call it, oh, well, we repealed Obamacare or as Democrats might call it a fix. For example, the medical device tax. You have members of both parties who are willing to do away with that portion of Obamacare.

And then you have other parts that you could pull along the edges. You could probably get them to alter the employer mandate a little bit where you might say, OK, perhaps the threshold of employees that have to be covered could be a little bit higher. So, there are areas of agreement that perhaps could allow with the right rhetoric both parties just sort of declare victory at the end of the day.

ROMANS: You know, I think you're absolutely right. If both parties can win and are satisfied that both parties can win, then the American people win.

BRIGGS: That word repeal is stuck --

ROMANS: Social Security was not perfect when it started. Medicare was not perfect when it started. Both have been tweaked along the way. Obamacare needs to be fixed, too, or replaced with something that is concrete and works. I don't see either of those options on the table right now.

LEONARD: Well, there has to be a way to sort of bridge the divide here. There are still a lot of hurt feelings after what happened with Obamacare when it was first passed.

ROMANS: Yes.

LEONARD: And so, now, it sort of felt like everyone was throwing punches in different directions. Republicans when they hear from Democrats that they want to work together and that they want to come up with solutions together, they don't really see that as a genuine offer. So, there are a lot of wounded feelings to be mended certainly in the weeks ahead.

ROMANS: And broken promises.

BRIGGS: No doubt about that. Seven years of those promises. On the far right, fears, on the far left, hopes that this leads to someday to a single-payer system. Does it get us one step closer to that?

LEONARD: Well, it's hard to tell. It seems to me that there are factions of the Democratic Party that want to see single payer. Others think that the next step to do is probably to allow a Medicaid buy-in like a public option. And so, the question is how willing are they to move very far to the left? It's hard to see even those who voted, though on the Republican side, who voted against Obamacare repeal tonight. It's hard to see them get on board.

So, it would be a pretty massive overhaul. And it's unclear to me how much of the public would like to see something like that. We do know that the Medicaid program was extended to cover low-income people, which in the most -- for most cases, that doesn't have any premiums and --

ROMANS: Right.

LEONARD: -- comes at no cost, it's very popular.

BRIGGS: Certainly.

LEONARD: People want to make sure the right incentives are aligned and they don't want medical costs necessarily to take up such a huge part of the budget as it does now.

BRIGGS: Right. Is it sustainable? That's a whole other question.

Kimberly Leonard from the "Washington Examiner", thanks so much. We'll check back with you next half hour.

Here's the statement from Senator John McCain who was the third no- vote and sent this to failure: From the beginning, I have believed that Obamacare should be repealed and replaced. While the amendment would have repealed some of Obamacare's most burdensome regulations, it offered no replacement to actually reform our health care system. The speaker's statement that the House would be willing to go to conference does not ease my concern that this shell of a bill could be taken up and passed at any time.

And that's without even getting, Christine, the politics of this. What does it mean for the Trump administration, for their agenda, and for 2018, the all-important midterm elections for Republicans, in particular in the House?

[04:15:07] ROMANS: All right. We're going o continue to follow this. Our other big story this morning: open warfare in the White House. It

looks like the president's top aide who wanted the feds to investigate leaks was leaking. Now, Anthony Scaramucci's vulgar tirade is public. That's next.

(COMMERCIAL BREAK)

ROMANS: All right. Tax reform could be months away, but the most controversial proposal is officially dead. The so-called big six negotiating reform released the principles of the GOP's plan. The group includes Treasury Secretary Steven Mnuchin, economic director Gary Cohn, House Speaker Paul Ryan, and Senate Majority Leader Mitch McConnell. It's still a wish list for tax cuts and lacks any real details. Save for one, the border adjustment tax is out.

Championed by Speaker Ryan, the border adjustment tax changes the way we tax U.S. imports and exports. It gives tax breaks to companies that export and strips away breaks from those that import.

[04:20:01] It has two goals -- one to encourage manufacturing in the U.S.

The companies that rely on imports like retailers hated it. They warn it would jack up consumer prices, and Americans, by the way, love their cheap goods. Second, it raises tax revenue. The current plan has $1.2 trillion of cuts. And without the border adjustment tax, it's not clear what will pay for it.

The administration says it will pay for itself. Reformers say spur (ph) 4 percent economic growth. Many are skeptical of that rate. They expecting slower 1.8 percent growth.

BRIGGS: Some dysfunction at the White House on steroids. While Communications Director Anthony Scaramucci was blasting leaks coming out of the White House, well, it turns out Scaramucci himself was leaking. In a profanity-laced tirade to "The New Yorker's" Ryan Lizza, a CNN contributor, he said he believes chief of staff Reince Priebus was behind the leak of his financial disclosure form, which really wasn't actually a leak because it's a public record. Scaramucci saying, quote, Reince is an expletive, paranoid, schizophrenic, a paranoiac.

ROMANS: Lizza who originally protected his source when Scaramucci said he wanted Priebus investigated says the communications director didn't ask for the conversation to be off the record or on background. The White House doing damage control while defending Scaramucci who tweeted he sometimes uses colorful language.

BRIGGS: Colorful.

ROMANS: Colorful. But will refrain from doing while at the White House. In a tweet last night says this: I made a mistake in trusting a reporter. It won't happen again.

Ryan Lizza's article, if you're not interested, is called: Anthony Scaramucci called me to unload about White House leakers, Reince Priebus and Steve Bannon. He started by threatening to fire the entire White House communications staff. It escalated from there.

BRIGGS: It's a great summer beach read.

ROMANS: It's a beach read. Don't let your kids read it.

CNN's Jeff Zeleny at the White House.

(BEGIN VIDEOTAPE)

JEFF ZELENY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Christine and Dave, as the White House ends another tumultuous week here, an internal fight inside the West Wing is brewing unlike anything we've seen in the first six months of this administration. By now, everyone knows about the fight between White House Chief of Staff Reince Priebus and the new Communications Director Anthony Scaramucci. Now, a lot of this played out yesterday on CNN's "NEW DAY" when Anthony Scaramucci called in and questioned Reince Priebus, really his credibility and asked if he was leaking, said if he was not, he should speak for himself.

Well, Reince Priebus did not comment throughout the day on Thursday. But asked at the daily press briefing, the new press secretary, Sarah Huckabee Sanders, was asked if the president had confidence in his chief of staff. This is what she said.

REPORTER: Sarah, does the president have confidence in his chief of staff?

SARAH HUCKABEE SANDERS, WHITE HOUSE PRESS SECRETARY: Look, I think I've addressed this question when it comes to staffing and personnel many times. That if the president doesn't, then he'll make that decision. We all serve at the pleasure of the president. And if he gets to a place where that isn't the case, he'll let you know.

ZELENY: So, not a definitive answer there. And now, in the new comments from the "New Yorker" magazine came out with Anthony Scaramucci using very colorful and vulgar language to describe Reince Priebus, chief strategist Steve Bannon and others, the White House again defending their new communications director.

I caught with Sarah Huckabee Sanders Thursday night at the White House, and she said, look, Anthony Scaramucci uses colorful language, he's passionate about things. She said, he won't do it again.

But we will see. This is a moment where despite everything going on with health care, with the Afghanistan agenda, other things happening at the White House, the palace intrigue still dominating and overshadowing the agenda -- Dave and Christine.

(END VIDEOTAPE)

BRIGGS: Boy, no question about that. Jeff Zeleny, thanks.

Jeff Sessions speaking publicly for the first time since President Trump began targeting him with a barrage of critical tweets. The attorney general standing by his decision to recuse himself from the Russia investigation, but he admits the relentless battering from his boss stings.

(BEGIN VIDEO CLIP)

JEFF SESSIONS, ATTORNEY GENERAL: Well, it's kind of hurtful, but the president of the United States is a strong leader. He is -- he's had a lot of criticisms, and he's steadfastly determined to get his job done. And he wants all of us to do our jobs, and that's what I intend to do.

TUCKER CARLSON, FOX NEWS HOST: He has said again and again in many different forms throughout this barrage that you should have acted differently, you should have recused yourself.

SESSIONS: I talked to experts and Department of Justice people who are trained in that, I'm confident that I made the right decision.

(END VIDEO CLIP)

ROMANS: Sessions says he believes the Justice Department is making tremendous progress but acknowledges he serves at the pleasure of the president and will step down if his boss wants a change.

The Republican Chuck Grassley, chairman of the Senate Judiciary Committee, is warning the president he will not hold hearings for a successor to Sessions in 2017. He says: Our calendar is set, and there are not hearings in there for a new A.G.

Senator Lindsey Graham cautioning the president there would be holy hell to pay if he fires the attorney general.

[04:25:04] The former Senate colleagues of Jeff Sessions are behind Jeff Sessions.

BRIGGS: No question about that. There is unanimous support. Not a good day for the Trump administration when you take in the opposition in his own party.

The U.S. ordering relatives of American diplomats to immediately leave Caracas two days ahead of a polarizing election that's threatening to tear Venezuela apart. The vote called by President Maduro is an attempt to elect a new assembly and rewrite the country's constitution. Maduro's opponents called it a shameless power grab.

One hundred and eleven people have died in violent protests across Venezuela since April. Now, the Venezuelan government says it will ban protests ahead of the weekend's election.

ROMANS: It is really a country coming apart at the seams. The people have been suffering there for some time. Now, that move is not expected to keep the streets quiet.

CNN'S Paula Newton has more for us from Caracas.

(BEGIN VIDEOTAPE)

PAULA NEWTON, CNN CORRESPONDENT: Good morning, Christine and Dave. We are bracing for a day of protests in Venezuela as the opposition

comes against the government of President Nicholas Maduro who is holding a vote on Sunday, a vote the opposition says will give this government the powers to act like a dictatorship. Now, when we say a day of protests, there will likely be very intense confrontations, because the government says these protests are now illegal.

You know, we caught up with what people here call a resistencia, the resistance. These are everyday people using everything but the kitchen sink to fight fire with fire. DIY shields, improvised explosives, these people say unless they get on the street and fight, they believe that Nicolas Maduro will be able to do what he wants in this country.

Remember, this country dealing with a humanitarian crisis, severe shortages of basic food and medicine.

A game changer here could be the Trump administration. They're saying if Maduro goes through with this vote, that there could be strong and swift economic reaction from the White House -- Christine, Dave.

(END VIDEOTAPE)

ROMANS: It's worrisome what's happening there. So glad that Paula's there to walk us through it.

All right. Twenty-seven minutes past the hour.

Seven years, seven years of promises and efforts to repeal Obamacare not enough to sway Senator John McCain.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), ARIZONA: No.

(END VIDEO CLIP)

ROMANS: There it is. The thumbs down. One of the most dramatic moments Washington has ever produced. We're live on Capitol Hill.

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