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Gen. Kelly Sworn in as Trump's Chief of Staff; Trump Holds Cabinet Meeting; Now: Trump and Sessions Meet Face-to-Face. Aired 10- 10:30a ET

Aired July 31, 2017 - 10:00   ET



POPPY HARLOW, CNN ANCHOR: It will be their first face-to-face encounter since the president unleashed his barrage of taunts and public shaming on the AG.

And new leadership, officially, in the West Wing, you are looking at it right there. Just moments ago, the president's swearing in of General John Kelly as his new chief of staff, the retired U.S. Marine Corps general embarks on a new and tough mission, restoring order in the White House.

Let's begin with Sara Murray who joins us at the White House. And the message from the president, listening to that just moments ago, Sara, was basically, everything is peachy. Things are going great. He will make them better.

SARA MURRAY, CNN WHITE HOUSE CORRESPONDENT: That's right. But obviously, if things were going great, Poppy, then you wouldn't fire your chief of staff or accept his resignation and bring in someone like John Kelly, a retired four-star general that took a number of staffers, are hoping really will mean a fresh start both in terms of calming some of the back biting, some of the infighting, but also, in jump starting the president's legislative agenda which of course has hit roadblock after roadblock complete with the collapse of health care. I think we can listen to a portion of the president lavishing praise on John Kelly after he swore him in this morning. Take a look.


DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Well, I think we've done very well. We did very well. Lots of records. Lots of records created, John.

If you look at stock markets -- the highest it's ever been. Unemployment -- lowest in 17 years. Companies are doing tremendously well. Business spirit is the highest it's ever been according to polls -- if you look at the polls -- the highest it's ever been in the history of these polls.

We're doing very well. We have a tremendous base. We have a tremendous group of support. The country is optimistic. And I think the General would just add to it. But the country is doing very well. Strongest stock market ever. On Friday, we hit the highest in the history of the stock market. Business is very enthusiastic. And we will proceed and we will keep going.

But we have a fantastic leader, Chief of Staff. He's going to do a really great job.

Thank you very much. We'll see you in the boardroom.


MURRAY: And the other thing we are watching this morning is of course, this cabinet meeting that is expected to get started right about now. To the best of our knowledge, this should be the first time that President Trump and his attorney general, Jeff Sessions are in the same room, face-to-face, since President Trump went to "The New York Times" to barrage his attorney general, suggesting he never would have put him in the job if he knew that Sessions would recuse himself from the Russian investigation. Not to mention all the tweets Trump has fired off at his AG, suggesting he is weak, he's not cracking down on everything from Hillary Clinton to leakers.

So, that will be a very fascinating interaction and who can forget the last Trump cabinet meeting we saw publicly where he went around the table and everyone just sort of piled praise at the feet of the president. That was a very unusual meeting. As far this cabinet meeting go historically, we'll see how it plays out this morning. Poppy?

HARLOW: That was indeed. Sara Murray, thank you, at the White House.

Joining us now, Betsy Woodruff, politics reporter for "The Daily Beast," CNN political commentators Dan Pfeiffer and Jeffrey Lord and our very own political director in the flesh, David Chalian is here.

David, let me begin with you and let's start on Sessions because the two men in the room probably pleasant, I'm sure in front of the cameras, but there is speculation increasingly that now that General John Kelly isn't running Homeland Security, that the president may try to push Sessions to running DHS and then put a more friendly figure in as attorney general.

DAVID CHALIAN, CNN POLITICAL DIRECTOR: Although I'm not sure that theory is going to go as smoothly as it sounds necessarily if the president were to do that because Senator Grassley, the chairman of the Judiciary, -- has already said not doing an AG confirmation process. That's not on our agenda this fall. So it may not be as easy as that because --

HARLOW: Do you think there's meat there? Do you think the president - I mean, from what you are hearing, thinking about that?

CHALIAN: I think the president is consumed and obsessed by the Russia investigation. I think he sees it as a witch hunt. Obviously he tells us that every day. And I think he wishes the Mueller investigation would go away and he thinks maybe changing the top of the Justice Department, having someone in that role who isn't recused might help get him there. I believe all of that to be true.

I also think the president saw the kind of pushback he had not yet seen -

HARLOW: From his party.

CHALIAN: -- from conservative critics, from his own party members, from the conservative media. He saw something he had not seen in the first six months, which was a real pushback from his own supporters. So I think he may -- you know, he might adjust a bit to that.

HARLOW: Jeffrey, here is some more of that pushbacks. Senator Lindsey Graham in a two-part tweet, here is part two. DHS Secretary Jeff Sessions just doesn't sound right, doesn't feel right, bad idea. He is warning the president against it. And so is Republican senator, Susan Collins. Listen to her.


CHUCK TODD, HOST, "MEET THE PRESS": Not support any attempt to move Jeff Sessions to DHS?

SEN. SUSAN COLLINS (R), MAINE: It's up to Jeff Sessions and the president, but if he's being moved because of his correct decision to recuse himself, I think that's a mistake.


HARLOW: Just to be clear, no one is moving anyone anywhere yet, as far as we know.

[10:05:01] But Jeffrey Lord, we know the president has not been happy, to say the least with Jeff Sessions as attorney general. So, would he be best advised not to move him from that position?

JEFFREY LORD, CNN POLITICAL COMMENTATOR: I will say, I think that Senator Grassley's words are sort of the tip of the iceberg there, that the problem would be who to succeed him. And there would be a battle royal over that. I'm not really sure the president needs that kind of situation at the moment. I understand why he is unhappy with Jeff Sessions. Politically speaking, in conservative media, there has been a lot of support for -- I'm just going to say Senator Sessions, Attorney General Sessions.

So, I think, you know the president is the personnel officer in the White House. And you know, just listening to him a few minutes ago, he's his own best White House communications director at that.

HARLOW: Betsy, to you, he was seated there. We have some pictures right next to General Kelly, highly respected across the board, someone who has given this country certainly his all with his service. But how much authority, as they sit there in the Oval Office together, do you believe Kelly will have? How much more of the president's ear will he have than Reince Priebus and do you believe everyone and I mean everyone, Ivanka, Jared, Anthony Scaramucci will now go through Kelly because they went around Priebus?

BETSY WOODRUFF, POLITICS REPORTER, "THE DAILY BEAST": Based on my understanding, from talking with folks at DHS, folks who know General Kelly, who worked with him in the past. I'm fairly confident that the general would not have taken this role if he was not sure that he would actually be able to do the job.

Remember, General Kelly is not someone who is about way mover and shaker. He didn't want this according to folks that I've talked to. Before his name was put out there as Homeland Security secretary, he actually told confidante, he didn't even want to be in the beltway, much the less to become the White House chief of staff.

However, the reason that he took this job, based on my reporting, is that look, he understands change of command and he sees himself as a public servant, who serves at the pleasure of the president. That said and the same way that he respects that the president is going to be his superior. He's going to expect those below him, his subordinates at the White House to respect his authority and not to try to circumvent him.

So, in some ways, the ball is in the court of all the other White House staffers. How much and how quickly do they challenge General Kelly? Do they make his life hard or do they just fall into a line in a way that they wouldn't have under a much weaker leader.

HARLOW: Dan Pfeiffer, someone who has been critical of this administration and policies to say the least. So, on a serious note, do you think that General Kelly, being in this position of power in the West Wing is good for America?

DAN PFEIFFER, CNN POLITICAL COMMENTATOR: Look -- we need, as Americans, a White House that is well-rounded because Trump has not faced any real crises yet, did not start with his own Twitter account. And when a crisis hits the White House for the entire government to respond correctly, you need the White House to be well-run. For the last six months, Priebus, whatever else everyone thinks about him, did a terrible job as chief of staff. The White House has been in chaos.

If General Kelly can bring order, can follow the normal policy processes that allow the measures of either party to govern on issues around foreign policy or national security, that would be good for the country. I am skeptical based on what's happened the last six months and in the two years of the Trump campaign. That he is going to be able to do that. But if he can make the trains run on time and truly manage that White House. When crisis hits, that would be a good thing for our country, no doubt.

HARLOW: All right. And that's when Trump administration - try to guess very quickly.

LORD: Franklin Roosevelt, Harry Truman, Dwight Eisenhower and Richard Nixon all had either an admiral or general as their White House chief of staff or in every instance, things were just fine.

HARLOW: Thank you for that history lesson.

David Chalian, to you, on that note, it is an interesting note, you still have reports from our Kevin Liptak, a person who's in the administration, saying, quote, "It's Trump's White House. It's not Kelly's White House." It's clear who is still in charge.

CHALIAN: Of course. And by the way, as it should be for any White House. The president should be the one in charge. That's the person elected by the American people. But this gets to the heart of what Betsy was saying about, you know, that Kelly would not accept this job -- I'm sure that is true. He would want certain concessions and agreements about how much control he would have. But I don't know how he can possibly know for certain that the president is going to uphold his end of the bargain -


HARLOW: -- going to say that.

CHALIAN: That is the problem here. It's the same occupant in the Oval Office who is proven to be impulsive, who will tweet policy on Twitter without bringing in his military chiefs. Whatever it is, it becomes a - it really becomes a very difficult situation. I certainly hope John Kelly is successful. But no matter what promises were made, it is impossible for us to know from his past behavior that this is going to be a different situation.

HARLOW: So what will you be looking at? I mean, you are the CNN political director. You dissect these things. You look at them. Will it be less Trump tweets on foreign policy measures? Will it be less sort of erratic behavior that you're looking for to say, hey, I think Kelly is having an impact on our president?

[10:10:05] CHALIAN: I mean, I think that they were going to look for is, a strategic plan that gets executed. And that is a consistent driven through all pieces of the White House, all pieces of the administration. Are we going to start seeing the kind of focus and discipline without the distractions that many people in the president's party say to me and others all the time that they would like to see?

HARLOW: Betsy, the distraction last week was one word, Scaramucci. I mean it was these long phone interviews that he was doing, not talking about policy, this rant to Ryan Lizza that was you know, on the record. He became the story. Now, when he took that job as chief communications director, he said, I report right up to the president. We don't know now whether he will go through Kelly or not. If he does not, is that problematic for this White House?

WOODRUFF: Without a doubt, it will be problematic for General Kelly. Remember, more than just about anyone in the White House right not. Kelly understands the importance of hierarchies, of authority and functional chains of command. That was an issue when the travel ban came down. When there were reports that Secretary Kelly sort of defied some White House officials who for themselves he didn't see as being in his chain of command. So, that's sort of a big question going into this week.

It's not so much what does General Kelly do so much as do folks like Anthony Scaramucci. Do folks even like Jared and Ivanka? Look, for ways to sort of circumvent him. And remember, for General Kelly, the move from running DHS to White House chief of staff, in my understanding, is actually a bit of a demotion.

He was uniquely well-suited to run DHS given his time at South Command, given his close relationships with Central and South American political officials. He had a huge budget. He had a huge department that he was the number one person in charge of. For him to go from that to being the number two person in the White House that has essentially become a soap opera is not necessarily a promotion whatsoever. It's an adjustment. It's going to be challenging for him.

HARLOW: Something tells me General Kelly does not want to star in a soap opera.

WOODRUFF: Exactly.

HARLOW: So, will we see things changed? Final word, quickly, Dan Pfeiffer.

PFEIFFER: Well, look, I think David raises the right question, which is, if Anthony Scaramucci and Dan Scavino and Jared Kushner do not report up through Kelly, this will not work. The president has to make the chief of staff first among equals. And he did not do that with Reince Priebus. It's a disaster. If he does not do that here, it doesn't matter if the chief of staff is a general or the RNC chair or a celebrity apprentice -- there has to be structure and the president has to enforce it or it will not work.

HARLOW: All right. Thank you all. Betsy, Dan, Jeffrey and David, nice to have you, we will see you again after we get some pictures of this cabinet meeting. That is just getting underway at the White House.

Meantime, a lot ahead for us this hour, major foreign policy test for this administration. Russia is retaliating in the wake of these new sanctions bill that is on the president's desk, awaiting his signature and North Korea launching another missile test on Friday, delivering a chilling message by the United States. We'll tell you why the vice president says all options are now on the table.


[10:16:57] HARLOW: All right. You are looking at the White House happening now inside a big meeting, a cabinet meeting, the president surrounded by all of his top officials, including his first face-to- face with Attorney General Jeff Sessions. This, of course, the first time the two of them together in the same room and we believe sharing words of some sort one would expect since the president's multipronged attack on his own attorney general.

With us now, our panel is back. And let me go to our political director, David Chalian, for more. It seems like because of the silence from the president on Sessions, he's safe for now. The president has moved on to other things. Would that be too much of an assumption?

CHALIAN: You are right. The assumption right now is that he backed off. He is not spending every day last week calling him beleaguered and weak and what have you. But if you were Jeff Sessions, Poppy, do you think you would feel secure in your position?

HARLOW: Probably not.

CHALIAN: I mean he definitely left his attorney general twisting in the wind and has done nothing to express confidence in moving forward, a way to actually turn the page from that. That's why I'm so curious when this tape comes in from the cabinet, to see if we see them in proximity for each other --

HARLOW: Right.

CHALIAN: and to see if they had any kind of interaction with one another.

HARLOW: But as I noted, Jeffrey Toobin, last hour. I mean, he hugged James Comey just a little while before when he was at the White House, before he fired him.

Betsy, to you, reporting that we have this morning that we showed here at some point this week about a major leak investigation by the Department of Justice, sort of multi-pronged and something that would really please the president, being spearheaded by Jeff Sessions. Do you believe that is what is sort of turning the page for Sessions here?

WOODRUFF: I think in firm that we are all expecting, according to DOJ officials, for them to announce some sort of leak investigation in the coming days. The question is, is this investigation, does it appear transparently to be an effort on the part of the Justice Department to alleviate the president's concerns or does the president take it seriously?

Regardless, the fact, first, that we are expecting them to make this announcement and second, that the Justice Department would announce it's beginning an investigation is incredibly unusual. It is very much against the norms of the DOJ for them to say when they are launching an investigation.

Usually, you don't have a precedent until an investigation is concluded with an indictment or something on goes line. So, the fact that they are going out on a limb here and saying that an investigation is getting started is very much being viewed by -- former DOJ officials I've been speaking with as an indication that this Justice Department is trying hard to keep the president happy. We'll have to wait and see if it works.

HARLOW: We have just learned and you'll see it for your own eyes in 30 seconds that Sessions, Jeffrey Lord, is sitting right across - directly across the table, the big conference table from the president. So, it's man-to-man, eye-to-eye on this one.



HARLOW: Who is a better -- who doesn't blink? Who's better at the don't blink contest? Let's look. Let's listen in. Hold on, let's listen in.

TRUMP: -- General Kelly. He will be Chief of Staff, as you know. We all know him, we respect him, admire what he's done. And at Homeland, what he has done has been nothing short of miraculous. As you know, the border was a tremendous problem and now close to 80 percent stoppage. And even the President of Mexico called me -- they said their southern border, very few people are coming because they know they're not going to get through our border, which is the ultimate compliment.

So I just want to congratulate him on the great job he's done with Homeland Security, and I have no doubt that he will be an absolutely superb Chief of Staff.

We were discussing a little while ago, before the meeting, how well we're doing, however. We have the highest stock market in history. We have a GDP, on Friday -- it got very little mention, although I guess in the business areas it did. But it got, I think, very little mention. 2.6 is a number that nobody thought they'd see for a long period of time. Remember, I was saying we will hit three at some point in the not-too-distant future, and everybody smiled and they laughed and they thought we'd be at one. And 2.6 is an unbelievable number, announced on Friday.

Unemployment is the lowest it's been in 17 years. Business enthusiasm is about as high as they've ever seen it. In fact, it is as high -- the highest point in 28 years according to a certain graph and a certain chart. The manufacturers are -- the enthusiasm level is incredible. We have a lot of tremendous things going. We have some interesting situations that we'll handle. North Korea, Middle East, lots of problems that we inherited from previous administrations. But we'll take care of them. We'll take care of them very well.

But, overall, I think we're doing incredibly well. The economy is doing incredibly well, and many other things. So we're starting from a really good base. I predict that General Kelly will go down, in terms of the position of Chief of Staff, one of the great ever. And we're going to have a good time, but, much more importantly, we're going to work hard and we're going to make America great again.

It's all about making America great again. That's what we're going to do. That's what I said. That's how we won this big election. And that's what we're in the process of doing and continuing.

And, General, it's really great to have you on board, and thank you very much. Thank you. Thank you.

Thank you very much, everybody.

QUESTION: Mr. President, what can you do about North Korea?

TRUMP: We'll handle North Korea. We're going to be able to handle them. It will be handled. We handle everything. Thank you very much.

HARLOW: All right. There you have it from the president flanked by his Secretary of State and his Defense chief there, General Mattis and also Secretary Tillerson. Across from him, directly, unfortunately, didn't see it though, across the table, eye-to-eye, we hear as his Attorney General Jeff Sessions.

A few headlines, we will handle North Korea. He said it was a problem inherited from other administrations. Talked up the economy a lot including the GDP report, which we'll dig in to in a moment and then a nod to his new chief of staff, General Kelly, saying he will go down as one of the greatest ever chief of staff.

My panel is back with me. Joining as well is retired Army Lieutenant, General CNN military analyst, Mark Hertling, and CNN's global affairs analyst and former deputy secretary of state, Tony Blinken, nice to have you all here.

Jeffrey Lord, to you, he got into it. He spent more time talking about a GDP report last Friday that he said was so much better than anyone expected than he did on North Korea or Kelly or any of those other things. 2.6 percent GDP is fine, it's what was expected. And frankly, he promised the American people 4 percent growth, what do you say?

LORD: Well, in six months, I think that's pretty good. The main thing I take from all of this is that we, when I say we, I mean the media writ large have spent so much time obsessing over Russia, there's really serious stuff going on out there.

I mean, this North Korean situation could not be more serious or more lethal and its potential impact. Those are the things that the president is focusing on. Those are the things that I think we all need to be focusing on because far beyond personnel and who is up and who is down in the White House, this is serious business here. And of course, as they say, he likes to tout the economy as all presidents do. But it is a reminder there is a lot of other news out there other than this.

HARLOW: General, to you, on North Korea, just a few words uttered, but important ones. We will handle North Korea, no specifics there. But the vice president, of course over the weekend, saying all options are on the table and also - you know saying, look, this is a problem we inherited from other administrations. Well, now, it is this country's problem, it is his administration's issue to solve and right now, he is laying the blame on China.

[10:25:04] What action needs to be taken going forward on North Korea and what do you make of the president's words?

LT. GENERAL MARK HERTLIN (RET), CNN MILITARY ANALYST: Well, first of all, you can't lay all the blame on China. It is a North Korean problem. It is a dictator in that country who sees himself as trying to protect his regime and threaten other people. So, those are the two issues that the president and other nations have to address. And there are many nations trying to be pulled together on this, Japan, South Korea, China, even Russia to a degree that's continuing to support North Korea.

So all of those countries have to be a part of the solutions and I think Mr. President - the president and his staffs are beginning to see that it's a whole lot harder to do something about it as he said during the campaign. If China doesn't fix it, then we are going to take care of it.

It's not a transactional issue between the U.S. and North Korea. There are many other nations involved. And I'm just not sure how he's going to handle it in a very easy way. It's going to be a tough solution set to a very difficult problem. It's been a long time coming.

HARLOW: Tony, to you, as someone who served in the State Department. And also, I know, has respect for General Kelly, he got that nod from the president saying he will go down in history as one of the best ever chief of staff. You say his job -- Kelly's job is as clear as it is complicated. What do you mean?

TONY BLINKEN, CNN GLOBAL AFFAIRS: Look, General Kelly is a by the book guy. But he's in a burn the book White House. So the challenge for him is going to be two things, managing down and managing up. Managing down, getting the staff in line. You've got folks who, unfortunately, not only have been stabbing each other in the back. They've been stabbing each other in the chest in the media. That's got to stop. Then, ultimately, managing up, somehow, trying to get the president focused, disciplined, not stepping on his own message and stepping on his own policy.

And we just talked about North Korea. Angry tweets at China are not a way to handle the problem. Actually engaging the Chinese and the South Koreans, the Japanese, the Russians, as the general just said, with a clear plan of action, that's the way forward, that's what he ought to be doing.

HARLOW: Dan Pfeiffer, as someone who has worked with White House administrations, has been senior adviser -- we don't have Dan, but I would ask him a question if we had him there.

Let's go to David Chalian. David, what was your takeaway from all the things the president harped on the economy, a few words on North Korea, and then also that nod to Secretary Kelly.

CHALIAN: My first takeaway is we saw Donald Trump, the master brander out in front again. Because he wanted -- you just heard him just defined the facts of what - saying, everything is going great. This is great. Lots of success. If there was so much success, he wouldn't need to change his chief of staff. If there was so much success, he wouldn't have brought in a new White House communications director. So it just defies the facts as we saw them all throughout last week, how challenging that week was to go out there and say, everything is great.

Yes, that is classic Donald Trump, right? He wants to put his own brand on it. Yes, he's talking up the economy. But as you noted, we are nearing the one year anniversary of his big economic speech, the economic club of New York during the campaign, where he said 4 percent growth as the goal.


HARLOW: And he said consistently, by the way.

CHALIAN: So that's the measure by which he's going to -- that's how we are going to measure him of success, 2.6 percent, obviously short of that. So again, he takes back and puts a spin on it. This is what he did in business and everything, that don't quite match up to the facts as we see them, but clearly, give us an indication of how he wants to stamp this.

HARLOW: Looking at the pictures in the room, you've got Secretary of Defense James Mattis on one side, Secretary of State, Rex Tillerson. Not to mention the other shake ups and people he fired on his team. You know, these are people who reportedly have been frustrated. Mattis was not given a heads up on the tweet about transgender policy in the military. As the Secretary of Defense, he was reviewing the policy. The president just comes out with his policy on Twitter. And then, Tillerson, we know has been frustrated, feeling like this president has undermined him on major, major issues like how to deal with Qatar for example.

CHALIAN: Yes. And how the staff, the State Department and get his own people. He's been extremely frustrated with the White House, feeling very handcuffed in his ability to actually run the diplomacy and the foreign policy of the government. So, you are right. I also think, in a time where we see Russia and North Korea both ratcheting up as acute challenges that the administration has to deal with, to be flanked there as you do in a cabinet meeting with your Defense Secretary. And Secretary of State is a key signal. It's interesting that you said Sessions was sitting right across from him. That's usually, I think, the seat of the vice president but we don't have that video.


HARLOW: I wish we could see it but we don't. I wish, you know, we were in that meeting so we could hear what he was saying to Sessions.

Betsy, to you, as you dissect what the president said, again, we only heard three minutes of it. What stood out most to you?

WOODRUFF: I think his comments about handling North Korea are obviously important and I think on top of that though, the silence between him and his attorney general, from my perspective, is really the big takeaway here. A lot of the focus on the tension between the Justice Department and the White House has highlighted how angry the president is with his AG.