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McCain Mocks Trump's "Bone Spur" Deferment; Trump Vows No Changes to 401K Plans Under Tax Plan; Bill O'Reilly Paid $32 Million to Former Colleague to Settle Claim; Poll Shows Alabama Senate Race Tied. Aired 2:30-3p ET

Aired October 23, 2017 - 14:30   ET



[14:30:35] BRIANNA KEILAR, CNN ANCHOR: Senator John McCain appeared to take a swipe at President Trump during an interview about the Vietnam War. McCain, of course, spent five years as a prisoner of war after his plane was shot down in Vietnam. Trump, on the other hand, received five draft deferments during the Vietnam War, including one medical deferment after he was diagnosed with bone spurs in his foot, according to a doctor. McCain never mentions Trump by name in the C- Span interview about the Vietnam War, but McCain talked about wealthy sons getting deferments, and he used the term for a bone spur, while low-income Americans were shipped off to war, were drafted.

In an interview today, McCain tried to clarify his remarks, sort of.


SEN. JOHN MCCAIN, (R), ARIZONA: One aspect of the conflict, by the way, that I will never ever countenance is that we drafted the lowest income level of America, and the highest income level found a doctor that would say they had a bone spur. That is wrong. That is wrong. If we're going to ask every American to serve, every American should serve.

UNIDENTIFIED HOST, THE VIEW: People thought you were talking about --

MCCAIN: Trump.

UNIDENTIFIED HOST, THE VIEW: -- Mr. Trump because he had a doctor's note that said he had bone spurs and he --


MCCAIN: I think more than once, yes.




UNIDENTIFIED HOST, THE VIEW: Chronic bone spurs.

UNIDENTIFIED HOST, THE VIEW: Do you consider him a draft dodger?

MCCAIN: I don't consider him so much a draft dodger as I feel the system was so wrong that certain Americans could evade their responsibilities to serve the country.


KEILAR: Errol Louis, Doug Hye back with us now.

Fact check, Errol. There was one deferment for the bone spurs, as we understand it. Both fetal though at one point on the campaign trail Trump could not remember which foot it was and it turns out it was four, and deferments because he was going to school. What do you make of his points?

ERROL LOUIS, CNN POLITICAL COMMENTATOR: Very well taken. I am old enough to remember who could serve and who wouldn't serve and who could get an educational deferment. Think about who in the 1960s and '70s was likely to able to pay tuition and get deferment and things were not fair. The burden was not borne equally and listen, we also know there is a lot of political payback here that was more than owed to Donald Trump after his caustic and insulting comments about John McCain on the campaign trail. Whatever has transpired in the past, we know that Donald Trump appears to be in good health and can play golf every weekend, while John McCain can't lift his arms above shoulder level and that says all you need to know.

KEILAR: Doug, what do you think?

DOUG HYE, CNN POLITICAL COMMENTATOR: I think Donald Trump is learning, John McCain can be a pain in the you know what. He's earned that. If you go back to the Obamacare vote for a few weeks ago, because John McCain voted no he was a hero. John McCain is not a hero because he votes yes on something. He's not a hero because he votes no on something. He's a hero because of the years he spent fighting for our country, being shot down, and spends time in a squalid cell in Hanoi and standing up for American in a way that none of us really imagined if we had gone through it. I certainly can't.

KEILAR: Providing to other prisoners there, providing amazing leadership as they struggled to get through unimaginable conditions.

You mentioned golf, Errol. And the president spent another weekend at one of his golf courses. And he's spent more than 75 days of his presidency at one of his golf properties. The administration won't discuss if he golfs. They won't allow pictures. It's hard on a large, expansive golf course to not occasionally be able to see someone. Why so secretive?

LOUIS: Well, I mean, thank God, the bone spurs didn't stop him from playing, first of all. Look, the reality is it is a terrible sort of graphic that you can show Americans engaged in real sacrifice, people doing all kinds of different things to try and advance this country, and the president of the United States in between sending out caustic, irrelevant and sometimes very petty personal tweets is off playing golf, and you know, his critics, of course, have found all of his old tweets in which Donald Trump who was at the time in the private sector constantly criticized President Obama, who wasn't much of a golfer, by the way, for the times he did go to the golf course.

[14:35:10] KEILAR: Doug, there were times where President Obama might each, I remember once he made a sensitive announcement about Jim Foley, I believe, on Martha's Vineyard, and he went and played golf.

HYE: Yes.

KEILAR: But the White House said he was doing it. They were very clear about the activity. So at least if you disagreed with that, you had the facts before you.

HYE: Brianna, if we go back to 2010, I was at the Republican National Committee about once a week sending you e-mails and press releases about how President Obama was more likely to pick up a phone for a tee time than calling the CEO of B.P., which was a disaster. But they admitted it. They didn't try and hide it. And also, this hasn't happened with the same frequency. Literally, Donald Trump is playing golf almost every four days of his presidency, and I don't deny any president should have his time off and time to recharge. There is a lot of recharging happening with this president. There's no doubt about that.

KEILAR: Doug Hye, Errol Louis, thank you.

Ivanka Trump, who also serves as a close adviser to her father, is on the road. She is pitching the president's tax cut plan. Take a listen.


IVANKA TRUMP, DAUGHTER OF & ADVISOR TO PRESIDENT TRUMP: America has the greatest workers, we've got the greatest skills, we've got the greatest spirit. But we need to be able to compete in an increasingly global world and we can't do that if our corporate tax rates are some of the highest and the highest in the developed world. So that is a major disadvantage to our American businesses and, on many levels, it's something that we all need to be considering as we of the to maintain and regain our competitiveness in the global marketplace.


KEILAR: Ivanka's town hall is coming as President Trump pushes Republicans on the Hill to get a budget deal passed by the end of the year so that they can move on to tax reform.

Trump is warning House Republicans you have to pass these tax cuts or lose in 2018. One of the tax cut ideas that the GOP is floating would be changing limits on 401K tax deferments. Not clear how serious of an idea this is. But as you can imagine, it's getting huge blowback.

The president weighing in this morning tweeting, "There will be no change to your 401K. This has always been a great and popular middle- class tax break that works, and it stays."

Let's get insight with Maya MacGuineas. She is the president of the Committee for a Responsible Federal Budget.

So, Maya, 401Ks should they be on the table and should the president keep his promise on this?

MAYA MACGUINEAS, PRESIDENT, THE COMMITTEE FOR A RESPONSIBLE FEDERAL BUDGET: Well, if we want to have tax reform as the president's daughter was talking about, lower corporate tax rates enhance the competitiveness or have a larger child tax credit, something she's been talking about we need to find ways to pay for that and let me take a step back and remind folks we came out with the newest deficit, it's $666 billion, our debt is at near record levels and if you want to cut some taxes the way you don't add further to the debt is you either tax some things more or get rid of a lot of the loopholes which is what the state and local deduction is, and what the 401K break is. We want to tackle those if we want to offset the costs or you cut spending and, right now, it seems that any time we make the hard choices for how you would pay for tax reform so it doesn't massively add to the debt. Either the president or someone else comes out and says, no, we're not going to do that. So right now, we don't have much of a plan to pay for this tax reform or tax cut is what it's looking like. And that is a really bad idea at the time our debt is so high because it would undermine our growth if we add to the debt further.

KEILAR: What can Republicans, can Congress do if they're not going -- well, this is really my question. If you touch 401Ks, if you touch the mortgage tax break, how do you do that without totally destabilizing how Americans, many Americans, millions of them run their households?

MACGUINEAS: Well, one of the things is that we have $1.5 trillion- plus tax breaks a year. You mentioned popular ones and the charitable donations and health care exclusion and just because we like them doesn't mean they're so effective at doing what we try to do. The home mortgage interest deduction makes it more expensive and not so great if you're a renter or someone who wants to buy a house. Much of the profit goes to the realtors or the builders and likewise, the health care exclusion drives up health care costs. Having our political leaders talk a little bit more honestly about these tax breaks and what they do and if we're willing to reduce some of them or I would like to see just a general tax cap, so nobody can claim more of these tax breaks from a certain share of their income to limit how much they are. If we're willing to do that, then we can do real fundamental tax reform, which would help grow the economy. But if they're not willing to make hard choices, and it seems like nobody is these days, this tax reform bill is going to be a bust and it's really going to hurt the finances of the country.

[14:40:22] KEILAR: Maya, thank you so much. We do appreciate that.

MACGUINEAS: Thank you.

KEILAR: Coming up, Bill O'Reilly's $32 million settlement secret exposed by "The New York Times." FOX News executives knew about this and they gave O'Reilly a new multi-year contract any way right after it. How it could impact the current Justice Department investigation into FOX News.


KEILAR: There is another sexual harassment bombshell concerning former FOX News host, Bill O'Reilly. "The New York Times" reports he secretly settled with an accuser for $32 million just before renewing his TV contract for $25 million a year. The report claims the settlement was with longtime FOX News colleague, Lis Wiehl, and it says she threatened to sue O'Reilly for, quote, "repeated sexual misconduct that included a non-consensual sexual relationship and the sending of gay pornography."

O'Reilly called the report a smear campaign, but the news prompted former FOX anchor, Megyn Kelly, who alleged sexual harassment by former FOX News chief, Roger Ailes, to speak out.


MEGYN KELLY, NBC HOST, MEGYN KELLY TODAY & FORMER FOX NEWS ANCHOR: O'Reilly's suggestion that no one ever complained about his behavior is false. I know because I complained. This must stop! The abuse of women, the shaming of them, the threatening, the retaliation, the silencing of them after the fact, it has to stop.


KEILAR: Kelly also interviewed a previous O'Reilly accuser, former FOX News colleague, Juliet Huddy. Speaking publicly about it for the first time, Huddy says she settled her harassment claim with O'Reilly last year.


KELLY: I know that you signed a non-disclosure agreement in connection with the settlement.

JULIET HUDDY, FORMER FOX NEWS REPORTER: As a lawyer, you know I can't talk about anything.

KELLY: You can't. Do you regret signing that? Let me ask you that?

HUDDY: I -- many women go into the settlement agreement because they just don't want to face what potentially could be coming at them. Again, it's -- you're dealing with a corporation filled with people who are going to do everything that they possibly can to make sure that they win, and you don't.

KELLY: Are you scared today?

HUDDY: I'm terrified. I'm actually terrified, and I don't know why I'm about to cry, but -- it's just -- it's -- it's difficult -- it's difficult. I think people have regrets. I think people have regrets when they sign non-disclosure agreements. I would imagine that they do.

(END VIDEO CLIP) [14:45:08] KEILAR: Clearly, talking about herself, it seems. O'Reilly has denied wrongdoing.

Joining me now Sarah Ellison. She's a special correspondent for "Vanity Fair," who wrote an expose on FOX News. And she's also the author of "War at the 'Wall Street Journal.'" And CNN politics, media and business reporter, Hadas Gold.

OK, Sarah, so when you hear this and we learn $32 million payout in January, what does that tell you?

SARAH ELLISON, SPECIAL CORRESPODNENT, VANITY FAIR & AUTHOR: Well, $32 million is an enormous amount of money. It's a stunning figure. And people have pointed out that O.J. Simpson paid more than that in a civil suit for two lives. So something really terrible had to happen. You were also paying for in this suit, the destruction of documents because as we learned in the times story and from the affidavit that they were going to destroy the terms and settlement were to destroy all sort of tapes or other supporting material. And so I think that the question now that faces the company and Bill O'Reilly is that this was something -- that was happening when the company was supposed to be cleaning itself up. And to me, the big question with this investigation that you talked about in your introduction is, were they trying to destroy evidence?

KEILAR: This clearly, Hadas seems, looks like a settlement to make the truth go away. And knowing that, why would FOX renew O'Reilly's contract thereafter knowing that there was a brand-new settlement.

HADAS GOLD, CNN POLITICS, MEDIA & BUSINESS REPORTER: Well, in the story, we can see that Bill O'Reilly claims that this was -- or told FOX this was a personal matter that he was settling himself. He didn't notify FOX of the amount of money that he was paying. And they were, at this time when this was all happening, they were in sort of an interesting position because Megyn Kelly, now at NBC, had left the company. She was a big prime-time star. Bill O'Reilly's contract was up for renewal and they wanted to keep him. He was one of their biggest ratings draws, which brought in a lot of money for the network, so they wanted to keep him. And perhaps that played into being willing to take this into account. And in his new contract, there was a provision that if there was more sexual harassment, they acknowledged that it existed, and they were able to fire him and leave him out of the contract.

KEILAR: Sarah, we were talking about the Justice Department investigation into FOX News. What do you think that this revelation does with that?

ELLISON: Well, I think it makes it -- again, I don't know the details of what they know and I don't know, in fact, the details of that investigation, but it is my understanding from that reporting that they're looking into what spurred their investigation was partly the notion that Roger Ailes was using company funds to settle sexual harassment claims and so I think that what this does is if they didn't know about this, it would lead them to ask what else they don't know about and how truthful the company is being with them. There is a big $11 billion deal that 21st Century FOX is trying to get through aside from this other investigation, they are trying to get past regulators in the U.K. to make a very important business decision or business move for the company, and I think that this will not be something that regulators in the U.K. look kindly upon either.

KEILAR: And, Hadas, she's talking about the approval process when it comes to Sky News.

GOLD: The experts I've spoken in the U.K. all day today said that while this wouldn't necessarily sink the entire deal it's another weight in the negative balance of what they're looking at and actually tomorrow, fittingly enough, is the deadline for when people can make comments to the competition market's authority in the U.K. to let them know information that might be important for this deal. So it's really fitting that this story came out just this weekend, just before that deadline in the U.K.

[14:49:06] KEILAR: Sarah Ellison, Hadas Gold, thank you so much to both of you.

Next, the escalating feud between Mitch McConnell and Steve Bannon. The Senate majority leader says, "Bannon only backs Republican candidates who lose elections." Bannon has thrown his support behind Roy Moore in the Alabama Senate race. And a new poll shows Roy Moore tied with his challenger in a very conservative state. Democratic candidate, Doug Jones, joining me next.


KEILAR: Alabama possibly going blue in the upcoming Senate special election. Can you even imagine that? Democrats are hoping that's going to happen. They are looking to fill the seat that was left by Attorney General Jeff Sessions with the Democrat, obviously, and they're optimistic because of the controversial record of the Republican candidate, Roy Moore.

They're pinning their hopes at this point on Doug Jones. He is a former prosecutor who convicted two former Klansmen of the bombing of the Birmingham church that killed four black girls in 1963.

And there is a recent poll that shows these two candidates are in a virtual dead heat. Doug Jones, thought to be the Democratic long shot, is now tied with former Judge Moore. Both candidates have 42 percent support among registered voters in Alabama.

Let's discuss this race with Doug Jones, joining us now, the Democratic candidate for the U.S. Senate race in Alabama.

Doug, thank you for joining me.

When you look at that poll, what have your thoughts been when you see that number and also maybe the mood leading up to this? Do you feel that you are really tied with Roy Moore?

[14:55:08] DOUG JONES, (D), SENATE CANDIDATE & FORMER PROSECUTOR: I think we're better than tied. We have been seeing such an energy out throughout Alabama from one end of the state to the other. People won't change. People are sensing change. They don't want any more chaos. They see a dysfunctional Washington, D.C. And they want someone who can reach across the aisles and have dialogue with people and talk to people and that's the only way we can get things done and they understand that Roy Moore is not that kind of figure and he is nothing, but a divisive and polarizing figure. So we're very encouraged with what we're seeing regardless of poll numbers and we are encouraged with what we're seeing and hearing with folks throughout the state.

KEILAR: You said you believe you're better than tied. Do you have polling that shows that or is that just the feeling that you're getting while you campaign?

JONES: It's just the sense. I mean, we have such large crowds that we're seeing everywhere we go, there's such an enthusiasm. We're seeing not just the traditional Democratic voters and we're seeing independents and Republicans that understand how important this election is and they don't want the face of Alabama being something that is so divisive. So we're seeing and hearing that from all people of all walks of life and all background. It is very exciting.

KEILAR: Roy Moore beat the more establishment candidate backed by Trump. Roy Moore is backed by Steve Bannon, former strategist of the president. And it's very interesting to hear what Mitch McConnell has said about Bannon's candidates. Let's listen.


SEN. MITCH MCCONNELL, (R-KY) SENATE MAJORITY LEADER: This is not about personalities. This is about achievement. And in order to make policy, you have to actually win the election. The kind of people that are supported by the element that you have just been referring to are specialists in defeating Republican candidates in November.


KEILAR: What do you think about what McConnell is saying there. And also you are tied with Roy Moore, but there is a very real possibility that he is the next Senator from Alabama.

JONES: Well, I think Mr. Bannon was just an opportunist in this race. Roy Moore has been a divisive figure like Steve Bannon has been for a long, long time. I think the big issue right now is whether or not people are going to vote for that. I don't think that they will. I think people are looking for a unifying voice. And the fact of the matter is we will stay in our lane on issues that are important to Alabama. I'll let the Republicans squabble within their ranks all that they want to squabble over who is good and who is not good. We are going to stay and be focused on issues. That's what people are responding to. They're not responding to the personalities.

KEILAR: So you want to be a unifying voice. So I want to show you about divisive things going on right now. We have Democratic Congresswoman Frederica Wilson, who is calling the Niger ambush Trump's Benghazi. What do you think? JONES: I wasn't party to any of those conversations. What I

understand and know is that we need to be focused on the issues. We're getting lost too much on Twitter feeds and --


KEILAR: No, but this is the issue of the Niger ambush being a failure that would haunt the president like Benghazi haunted President Obama and Hillary Clinton. What do you think?

JONES: I think that we need to look into what happened out there. No one knows at this point. We had hearings in Benghazi. I think I'm sure that there will be congressional hearings. We need to find out what happened and whether it is held or not. I'm not sure yet. I think folks need to be looking into that issue. Obviously, people don't like to see our troops killed, especially in some type of ambush.

KEILAR: And you don't have an opinion when it comes to the controversy over President Trump disagreeing with the widow, Myeshia Johnson?

JONES: I have an opinion. I wish they would dial it back and focus on issues. It's one of those things that we get lost and --


KEILAR: But should he have tweeted disagreeing with her tomorrow?


KEILAR: Should he be going head-to-head with a Gold Star widow?

JONES: I'm not going to tell the president what to tweet or not to tweet. I think those issues are getting us side tracked on the real issues of the day. No one wants to attack a Gold Star widow. No one wants to attack a president. We have to focus on other issues. I wasn't present for any of those. I just wish we could dial all of that back and quit talking at each other and start talking to each other a little bit, and let's resolve those differences in a non- public way rather than just fighting constantly.

KEILAR: Doug Jones, thank you so much. We are going to be watching this Senate race with a considerable amount of interest.

And I do want to let our viewers know, we invited Roy Moore to appear on CNN, and we continue to open that invitation and we would love to have him on, as well.

Thank you, sir.

JONES: Thank you.

KEILAR: We are waiting for a Medal of Honor ceremony to begin at the White House any minute now. President Trump is going to be awarding the nation's highest military honor to a retired Army medic who risked his life several times in Vietnam and Laos to provide medical care to his wounded comrades --