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Senate GOP Defy Trump's Health Care Demands; Lawsuit: FOX News, white House Coordinated Fake Seth Rich Story. Aired 6-6:30a ET

Aired August 2, 2017 - 06:00   ET

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


(BEGIN VIDEOTAPE)

SARAH HUCKABEE SANDERS, WHITE HOUSE PRESS SECRETARY: I think what's hurting the legislative agenda is Congress's inability to get things passed.

[05:57:15] UNIDENTIFIED MALE: A rift is growing between President Trump and Senate Republicans.

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: I'm not going to vote to change the rules of the Senate. Having a minority voice is probably good for the country.

SEN. CHUCK SCHUMER (D-NY), MINORITY LEADER: The American people need a president who puts their interest first, not someone who plays political games with their health care.

SANDERS: The president weighed in, as any father would, based on the limited information that he had.

JAY SEKULOW, ATTORNEY FOR DONALD TRUMP: The president didn't sign off on anything. The president wasn't involved.

UNIDENTIFIED MALE: It is hard for me to keep track of this ever- widening web of lies that is coming from this administration.

SEN. SHELDON WHITEHOUSE (D), RHODE ISLAND: It potentially is another piece of evidence of obstruction of justice.

(END VIDEOTAPE)

ANNOUNCER: This is NEW DAY with Chris Cuomo and Alisyn Camerota.

ALISYN CAMEROTA, CNN ANCHOR: We want to welcome our viewers in the United States and around the world. This is NEW DAY. It is Wednesday, August 2, 6 a.m. here in New York. Here is our starting line.

A growing number of Senate Republicans are defying President Trump's push to dismantle Obamacare, and instead, his own party is working with Democrats to stabilize insurance markets and to chart their own course to focus on tax reform and the debt ceiling.

Meanwhile, a bill to slap Russia with new sanctions is still sitting on the president's desk without his signature. The Kremlin is blasting the contradictory statements coming from the White House. What is fueling President Trump's reluctance to sign that bill?

CHRIS CUOMO, CNN ANCHOR: And what is fueling the White House's apparent inability to tell the truth? Another change to the story on our president's role in the Don Jr. statement about his meeting with Russians. The White House now conceding that President Trump did "weigh in" on his son's misleading initial statement. This admission comes after repeated denials from the president's legal team.

The truth, also the subject of an explosive lawsuit claiming that FOX News concocted a fake news story about the murder of DNC staffer Seth Rich with oversight from the White House. Did President Trump or his staff peddle this bogus story to distract from the cloud of Russia?

We have it all covered. Let's begin with CNN's Joe Johns, live at the White House. Good morning, Joe.

JOE JOHNS, CNN SENIOR WASHINGTON CORRESPONDENT: Good morning, Chris.

After tweeting over the weekend that Senate Republicans look like fools because they won't change the rules, the president is now facing a growing number of Republicans who are bucking him and his legislative priorities, even as the president's credibility continues to fade over the Russia investigation.

(BEGIN VIDEOTAPE)

JOHNS (voice-over): President Trump's response to the collapse of the health care bill exacerbating growing tensions between Senate Republicans and the White House.

SEN. JEFF FLAKE (R), ARIZONA: We've got to get away from this attitude that you have to agree with the president and that a senator should be a rubber stamp for everything the president wants at all times.

JOHNS: Majority Leader Mitch McConnell bypassing requests to hold another repeal vote and rejecting the president's demand that the Senate change their rules to pass bills by a simple majority.

SEN. MITCH MCCONNELL (R-KY), MAJORITY LEADER: If there are not the votes in the Senate, as I've said repeatedly to the president and to all of you, to change the rules of the Senate.

JOHNS: It comes as the Senate HELP Committee's influential Republican chairman also pushes back against the president's threat to let Obamacare implode by stopping payments to insurance companies. Senator Lamar Alexander proposing bipartisan legislation that would do exactly the opposite.

SEN. LAMAR ALEXANDER (R-TN), CHAIRMAN, HELP COMMITTEE: Our proposal is that by mid-September we will see if we can agree on a way to stabilize the individual insurance market.

JOHNS: Senate Republicans also criticizing the administration's shifting story about the president's role in crafting his son's misleading initial statement about the reason for the June 2016 meeting with a Russian lawyer.

GRAHAM: When you put out a misleading statement, it's going to be hard to convince people to stop looking at other things.

JOHNS: The White House admitting Tuesday that the president was involved...

SANDERS: The president weighed in, as any father would, based on the limited information that he had.

JOHNS: ... contradicting repeated denials from the president's legal team.

SEKULOW: The president was president not involved in the drafting of the statement.

I wasn't involved in the statement drafting at all; nor was the president.

The president didn't sign off on anything.

JOHNS: Sarah Sanders denying reports that President Trump personally dictated the deceptive statement and attempting to shift the narrative.

SANDERS: Everyone wants to try to make this some story about misleading. The only thing I see as misleading is a year's worth of stories that have been fueling a false narrative about this Russia collusion.

JOHNS: The ranking member of the Senate Intelligence Committee investigating possible collusion disagreeing.

SEN. MARK WARNER (D-VA), RANKING MEMBER, SENATE INTELLIGENCE COMMITTEE: This administration continues to say, particularly vis-a- vis Russia, there's nothing there. Yet they don't act that way at all.

(END VIDEOTAPE)

JOHNS: The administration continues to try to shore up its base on the right. "The New York Times" is reporting this morning that the administration is looking at suing universities for affirmative action policies that may discriminate against white students. There are also proposals for new trade policy, a new trade case against China, as well as introduction of legislation that would essentially introduce a skill-based immigration policy in the United States.

Chris and Alisyn, back to you.

CAMEROTA: OK, Joe, thank you very much for all that.

Let's bring in our political panel. We have CNN Politics reporter and editor-at-large Chris Cillizza.

CUOMO: Ooh. CAMEROTA: CNN political analysts David Gregory and John Avlon.

CUOMO: Ahh.

CAMEROTA: David -- I don't know what we're doing, David Gregory. Is it your sense that Republicans, leading Republicans in the Senate have reached some sort of tipping point, where even beyond Lindsey Graham and John McCain and Jeff Flake, that they are now more willing to come out and publicly split with the president?

DAVID GREGORY, CNN POLITICAL ANALYST: Well, clearly, they are. There's no question about it. Because I think they feel emboldened to take on a president who's increasingly weak, although he still has his base behind him of Republicans who put him into office.

But this is a president who continues to provoke them and to challenge them from the outside, as if he's not the head of the Republican Party.

And he's a president who's not leveling with the American people. The White House lies about things it should not lie about. This Russia investigation is something that grows bigger because of how the president and his team handles it, period. You want to wiggle out from that? Then level with the America people. It's that simple.

And Republicans on Capitol Hill are increasingly paying the penalty for that, as they have a president who lacks credibility. If you don't tell the truth about some things, you can't be believed on other things. And the president's credibility, the White House's credibility has suffered, and makes it very difficult for him then to influence Republicans to do what he says they ought to do. The party is increasingly moving away from him, moving away from this White House as it tries to chart its own future and face voters on its own.

CUOMO: John Avlon, Tim Scott in "The Washington Post," quote, "We work for the American people. We do not work for the president. We should do what's good for the administration, as long as that does not in any way, shape or form make it harder on the American people."

There had been these -- this patience, or impatience for a tipping point. When will these people in the GOP take back their own party? When will they own their own mandate?

Last night I heard one of the conservatives say, "It's not just about the base. It's about the fact that the president is being base, and you know, we have to stand against that."

JOHN AVLON, CNN POLITICAL ANALYST: Yes.

CUOMO: "We're real conservatives." How real do you think this is?

AVLON: I think it's real, and it's going to -- it's going to become more defined, and here's why.

First of all, as you look at the president's approval numbers, it's not just his lowest approval rating in history, recorded history among the American republic. Yes, he's strong among the base, but that's weakening.

More importantly, most Republican senators who ran in '16 ran ahead of Donald Trump. He had reverse coattails. He didn't bring them over the finish line. They ran ahead of him. So they've got a mandate from their voters that should inspire them to straighten their civic backbone a bit and to start reasserting basic separation of powers.

The other factor, of course, is that people are getting exhausted in defending the indefensible or having positions they're being told to take out undercut by the president's actions of statements on any given day. So if that all of a sudden gets people to start thinking about the national interests, as opposed to special interests, if that starts getting people to think about strengthening separation of powers for the good of the republic, that's a good thing.

CAMEROTA: And Chris Cillizza, they're not just thinking about it and talking about it; they're actually doing things. I mean, you can see actual policy.

Senator Lamar Alexander of Tennessee is working in a bipartisan way with Patty Murray of Washington to strengthen and stabilize Obamacare, not to repeal and replace, as the president has wanted. They are beginning to take actual policy actions that seem to be at odds with what the president has said he wants.

CHRIS CILLIZZA, CNN POLITICS CORRESPONDENT AND EDITOR-AT-LARGE: Not seem to be, Alisyn, I think; are directly at odds. I mean, Donald Trump's solution in the wake of the failure of the Senate to pass the health care vote is, essentially, "Let's let this fail. Let's let the Obamacare collapse under its own weight, and then everyone will come begging to us for a solution, and Democrats will get blamed." He literally has said basically that.

I think what you see in Lamar Alexander is a guy -- let's not forget, this is a guy with a pretty storied political career. He's run for president twice. He was in the leadership in the Senate. He took a step back from that. But this is someone who's fundamentally sort of a problem solver, someone who's been in public service for a very long time and someone who is not going to follow the president's lead and just let people in his state of Tennessee or in any state watch as this thing totally collapses.

So I think the fear factor, to the extent it ever existed with Donald Trump, is essentially gone that, yes, they know he will take shots at them. Yes, they know he may attack them by name. But no, they are no longer as afraid of him as they might have been earlier.

And never forget this: The Lamar Alexanders of the world were never Donald Trump allies. They voted for him, probably, because they preferred him to Hillary Clinton. These are never people that are going to be deeply loyal to him. So it doesn't take a lot to peel them away. And I think he's given them more than enough over these six months to convince them that staying with him at all times on all things is politically perilous.

CUOMO: All right, so let's talk about, David, the different irons that are in the fire here. OK, so we have this dynamic about let's call it the "enough is enough," maybe?

CAMEROTA: Sure. Go ahead.

CUOMO: You have the president's reaction to it, which is to do what he does best. You give him opposition, he attacks you. The president over the weekend tweeting, "Republicans in the Senate will never win if they don't go to a 51-majority vote now." This is taking care of the filibuster rule once and for all. "They look like fools and are just wasting time."

So he provoked them. They now seem to be responding by that to say, "No, we're going to do our business."

And remember why it matters, David. Set this up for us. September. You have September morn coming there. You have the debt ceiling. You have the ability to get a budget done. Those are both in September. "September Morn," Neil Diamond.

CAMEROTA: I got it.

CUOMO: So how big is that?

GREGORY: I think it's really important. You also have tax reform. Now, this is something that you saw Democrats say, "Oh, we'll get involved in this. Let's try to craft something bigger with our priorities, as well," forcing Majority Leader McConnell to say, "No, they're out of sync with Republican priorities. We'll probably have to do this with reconciliation, just 51 votes."

But the president provokes the Republicans. You have the leader of the Republicans, McConnell, reminding the White House, "Hey, we didn't have the votes on health care, period. So it doesn't matter whether we just had to reach that 50-vote threshold. We didn't have it."

And the president knows this or should know it but still wants to cast himself as being outside the Republican Party.

And I think it's interesting. If you look at Arizona alone, John McCain, who has now returned to his maverick self with this horrible cancer diagnosis that he's received and the role he played on health care, well, he had to get closer to Trump to win reelection but now has become more independent.

And here's Jeff Flake, the junior senator, a real conservative out of Arizona, who knows that Trump is going to support a primary opponent to him. He comes out with this book on reasserting conservatism against Donald Trump. I think this is significant on all these fights you're talking about -- from taxes to raising the debt ceiling and ultimately on the budget -- that there's a kind of conservative backlash going on now against Trump that we haven't seen, really, since the campaign.

CAMEROTA: Quickly, wrap this up.

AVLON: Look, it's about damn time, and here's why. Senators historically have been the place that cooled the civic debate, that thought about the national interests, that tried to take into account these bipartisan coalitions whenever possible. The fact that that's been degraded in recent decades by an increasing ideological polarization of the part, that's helped lead to Donald Trump.

But if this is what's required, the constant insults from the Oval Office is what's required to have senators start restoring their best selves, their best traditions, good. Let's have it happen and help us all.

CAMEROTA: Panel...

CUOMO: September morn, we danced the dance until a brand-new day. Nothing?

CAMEROTA: Come on.

CUOMO: I thought she was going to pick up on that in a second.

CAMEROTA: I need the -- I need the music in order to hum a few bars of that.

CUOMO: Neil Diamond?

CAMEROTA: I know it's Neil Diamond.

CUOMO: Not Jersey, but still.

CAMEROTA: No, it's not Jersey.

CUOMO: All right. The White House finally conceding that President Trump did weigh in on his son's misleading statement about that meeting with a Russian lawyer. Who cares? They said he had nothing to do with it. That's what his lawyer said. Why do they keep changing the story? Next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP) [06:15:06] SANDERS: The statement that Don Jr. issued is true. There's no inaccuracy in the statement. The president weighed in, as any father would, based on the limited information that he had.

(END VIDEO CLIP)

CUOMO: Straight statement from Sarah Huckabee Sanders. One problem. It completely contradicts what has been said by the White House from the beginning on this. They had their attorneys going out and saying the president had no role in crafting that initial misleading statement on Don Jr.'s meeting with Russians at Trump Tower. Now they're changing their story.

Let's bring back the panel: Chris Cillizza, David Gregory, John Avlon. Relevance.

AVLON: I mean, look, Sarah Huckabee Sanders is trying to build back a credibility gap that she undermined dramatically yesterday. First of all, we know Don Jr.'s statement they put out was fundamentally false. Right? We know that.

We also know the spin around it and the fact that the president apparently dictated it was contradicted by Jay Sekulow, the president's lawyer, on CNN and other outlets. So there's really no place to go. So instead, they're trying to call anyone who's asking questions a Russia-phobe. But that was -- that was a low. That did not comport with reality, and they knew it.

CAMEROTA: Chris Cillizza, here is -- here are the repercussions, I mean, according to Senator Lindsey Graham, why this matters. Listen to this.

(BEGIN VIDEO CLIP)

GRAHAM: One, he put his son in jeopardy. Now we have to wonder about what Don Jr.'s team will tell you about what he actually did. If he didn't know about the e-mail, the statement may have fooled you. If he knew about the e-mail with Don Jr., then it's a misleading statement.

(END VIDEO CLIP)

CAMEROTA: So you just don't know what to trust is part of the problem.

CILLIZZA: Yes. The issue here -- well, I mean, there are a lot of issues. John touched on one, which is just fundamentally, Sarah Huckabee Sanders said yesterday is a direct contradiction to what the White House has been saying.

No. 2, remember that the Trump White House, Jay Sekulow, Donald Trump has essentially said, "Look, I don't know anything about this. I mean, I was sort of clueless about this meeting. I wasn't there; I didn't know anything about it."

They now said he weighed in. Now, that's a tough term to figure out. I don't know what -- what does "weighed in" mean? Does it mean he looked at it? Does it mean he edited it? Does it mean he dictated it, as "The Washington Post" reported?

But regardless, he had a hand in that statement. We now know that. That statement was very carefully crafted in that there's nothing -- if you look at it, there is nothing that is factually definitely wrong. It was primarily about Russian adoptions. We don't have evidence to suggest that, if it was 20 minutes, 11 of the minutes were about Russian adoption. OK. It was not a campaign issue. That's true. Russian adoptions weren't a campaign issue.

What's left out of it, though, is massive, about you know, why did the meeting take place?

CAMEROTA: Yes.

CILLIZZA: Who was going to be there? So if Donald Trump really knew limited information, according to Sarah Huckabee Sanders, that's a pretty carefully-worded statement for someone who doesn't know much about it. That's what really sort of got my siren up. But you would -- it is not a statement you would make if you just -- somebody said, "Yes, we have this meeting."

It's a statement you would make that would suggest you knew that there were things you weren't saying; you were carefully using terms to keep yourself out of any factual jeopardy there.

CUOMO: I think Alisyn is spot on about this, David, in that, you know, people rush to illegality or to impeachment. And it's a mistake, because they're very high bars.

GREGORY: Yes.

CUOMO: But trust is a main measure that seems to be failing in this situation. John Dean and Robert Ray, OK, so the Whitewater counsel and the famous Watergate counselor, both agreed that what seems to be going on here is a question of trust on both sides. That the president doesn't trust the people around him to support his innocence, that he has done nothing wrong, he has nothing to conceal. And, therefore, it is OK for him to disrupt the narrative that's out there that suggests anything different.

And as a result, they twist the truth; they misinterpret or misstate at a minimum. And that then hurts the trust of the media and those outside their own little circle to trust anything they say. Fair appraisal?

GREGORY: Yes, I think that's really it. Because the original premise is that is ridiculous; this investigation is ridiculous, as Sarah Huckabee Sanders said. It's being overblown, and there's anonymous sources. It's OK to lie. It's OK to mislead. It's OK to misinterpret.

And I'm sorry, we can parse this in our remaining time here on television. They don't deserve the benefit of the doubt. This was the same team and the same president who brought us the birther lie to launch himself into national politics.

So he weighed in as any father would on behalf of his president [SIC]? No. 1, this is why you don't have kids involved in your campaigns or working for you, because it's a conflict of interest. That's No. 1.

[06:20:03] No. 2, no, sorry, it doesn't pass any kind of rational test. You think Donald Trump was not actively involved? He didn't just weigh in. He dictated the statement, and his lawyer said he didn't. That was not the truth, period. And yet we're supposed to believe them on other things. He looks like he's got something to hide. There may be nothing there. But why do they keep acting like there is?

CAMEROTA: John Avlon, we need to talk now about the very strange and tragic story of Seth Rich.

People -- sometimes when I'm out in the real world, people ask me all the time, "What is -- what is fake news?" They're confused. "What does it mean?" This is Exhibit A of a fake news story took hold, unfortunately, on FOXNews.com about the circumstances surrounding the murder of Seth Rich, DNC staffer.

They, it turns out, fabricated, according to the primary source, a former D.C. homicide detective named Rod Wheeler who was trying to look into the murder of Seth Rich. It turns out it was a botched burglary. He says that FOXNews.com fabricated quotes of his to make it appear as though there was some -- that he was the leaker of the DNC e-mails, not Russia. Here is how the White House spun this yesterday.

(BEGIN VIDEO CLIP)

SANDERS: The president had no knowledge of the story, and it's completely untrue that he or the White House had involvement in this story. And beyond that, this is ongoing litigation, and I'd refer you to the actual parties involved which aren't the White House.

(END VIDEO CLIP)

CAMEROTA: Rod Wheeler, the person who was investigating this, says he did have a meeting at the White House. He did get e-mails saying the president is very interested in this story and how you're going to spin it.

AVLON: Right. And those e-mails were sent to him -- and texts -- were sent to him by a prominent Republican donor who Chris spoke to last night, who inserted himself in this.

CAMEROTA: Ed Butowsky.

AVLON: Right. So you've got sort of a collusion between apparently FOX News, one of their contributors, who's a private investigator, one of the reporters in the story, that was subsequently deleted when it came under scrutiny, and a Republican donor who's got direct access to the White House and saying that the president in these communications is directly involved and encouraging them to go forward.

The reason this is so troubling isn't just the smearing of a -- of a dead DNC staffer's name and the attempt to deflect what is demonstrably true, that Russia influenced the election, which all our intelligence agencies agree, on the DNC and on this kid, right?

It's also that we have seen the manipulation and intentional distortion of the term "fake news" to mean anything that the White House feels discomfort at confronting. But this, as laid out in this lawsuit, is a clear evidence of fake news, something totally concocted, totally for ideological and partisan reasons, fashioned out of whole cloth, that comes collapsing upon itself and is being coordinated with the White House. It cannot be said enough how outrageous this is. This has e-mails and texts that would appear to be a smoking gun. We'll see how it's litigated.

But it really pulls the curtain back. And the fact that the curtain is being pulled back on the folks who are trying to say that independent journalism is fake news should infuriate everyone, let alone the family of Seth Rich and everyone involved in this larger investigation into Russia. CUOMO: Chris Cillizza, let me tee up a piece of sound for you that Ed

Butowsky gave us last night here on CNN.

(BEGIN VIDEO CLIP)

ED BUTOWSKY, REPUBLICAN DONOR: They never talked to anybody at the White House. By the way, I've never talked to President Trump in my life. And President Trump nor the White House has anything to do with any of this.

(END VIDEO CLIP)

CUOMO: So he said in a voice mail...

CILLIZZA: Yes.

CUOMO: ... to the detective something different. He said in a text something different...

CAMEROTA: That the president was...

CUOMO: ... that the White House was involved, that the president had read it, that the White House was waiting for the article to come out. So it was all over the place. Now he's in denial mode, not unusual given the fact that they're the subject of litigation. But what is the point here?

CILLIZZA: Well, look, he's -- it's a pending lawsuit. This is Rod Wheeler, and Butowsky is disagreeing. But this is -- to John's point, what are you seeing here -- sorry to sigh -- but what you are seeing here is a coordinated effort to deflect and blame where there is not deflection and blame to go around. This is a murder, plain and simple. That's what the police have determined, and you're seeing it being twisted for political and partisan reasons.

Even if it didn't come in the midst of a long-running, and what I think to be fundamentally disingenuous attack on the idea of "fake news" -- I put it in air quotes, because that's not what it is -- this is creation out of nothing and using the death of a kid.

I mean, let's not forget that.

CAMEROTA: Right.

CILLIZZA: This is -- this is painful enough for Seth Rich's family, but now to say," Well, really, he was a mole within the DNC leaking all this information," you know, I mean, I can't imagine losing a child, much less having him dragged through the mud in this way, where there is no real evidence here to suggest that that's the case.

CAMEROTA: David Gregory...

[06:25:00] CILLIZZA: It's not -- it's a bad look, broadly speaking, for the White House, and I think an absolute repudiation of this idea that somehow what we do on a daily basis is fake. CUOMO: And yet another meeting that the White House official took,

Sean Spicer, in this case, that he didn't know anything about the meeting. It only lasted ten minutes and immediately turned from what this was about to their assurance.

CAMEROTA: David Gregory, we're out of time. We're so sorry. We owe you a response at some point.

GREGORY: This is outrageous.

CAMEROTA: Yes.

CUOMO: Fake news.

CAMEROTA: On that note, we'll -- also, we're going to have the family's side coming up. Seth Rich's family spokesperson is going to be here with how -- with their response to all of these revelations.

Thank you very much, gentlemen.

OK. The Mooch, gone but not forgotten. Comedian Mario Cantone doing one final dead-on impression of the fired White House communications chief.

(BEGIN VIDEO CLIP)

MARIO CANTONE, COMEDIAN: I just want to say I owe the American people nothing, but they're going to get an explanation, because that's how I roll.

(END VIDEO CLIP)

CAMEROTA: The rest of the story, according to Mario Mooch next.

CUOMO: Wait until you hear how he describes how he smells.

(COMMERCIAL BREAK)