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Soon: Senate Republicans Unveil their Tax Plan; President Trump's Major About-Face on China; Trump says He Expect to Meet with Putin this Week; Flynn Worried about Son as Russia Probe Intensifies. Aired 10-10:30a ET

Aired November 9, 2017 - 10:00   ET



POPPY HARLOW, CNN ANCHOR: -- on Tuesday night, Republicans eager, perhaps more eager than ever, to pass their tax overhaul. But selling it as a middle-class tax cut is getting harder and harder as the details come out. This morning, the White House chief economic adviser Gary Cohn put it this way to CNBC, the whole trickle down is good for the economy. He also said, quote, "The most excited groups out there are the big CEOs."

JOHN BERMAN, CNN ANCHOR: Yes. I'm not sure those are part of Paul Ryan's talking points. Congressional leaders also need to come up with $200 billion or so. But what's $200 billion among friends.

CNN's Suzanne Malveaux following this on Capitol Hill for us, action on both sides of Capitol Hill this morning. Suzanne?

SUZANNE MALVEAUX, CNN NATIONAL CORRESPONDENT: There's a lot going on here, John and Poppy. First on the House side we're seeing the mark up process continue in the House Ways and Means Committee. Essentially, they are presenting what is their final tax plan before it goes on to the full House and the floor sometime next week.

The problem they're having here, the Congressional Budget Office yesterday saying that their plan was going to cost $1.7 trillion in addition to the federal deficit. They have got to get that down to $1.5 trillion in order to allow this bill to go through the special rules process and simply pass by a simple majority on the Senate side. So that is what they've been working on over the last 12 hours to get it down to the acceptable figure.

On the Senate side, you have got the Senate Finance Committee. They're going to be unveiling their own plan. They've got a meeting behind closed doors with their members to talk about what is acceptable. We do have a sense of how these two plans are different.

Now, one of the main points here on the House side, the bracket, tax brackets would be simplified into four groupings. On the Senate side it would be five to seven tax brackets. Secondly, what we saw on the House side was elimination or repeal, if you will, of the local and state tax deductions, but maintaining the tax deductions on property. That is going to be included now on the Senate side, so all of that will go away. And then third, this is where on the House side you had a corporate tax rate going down from 35 percent to 20 percent, immediately and permanently. On the Senate side they're going to delay that process for about a year or so, and so all of this is meant to generate that revenue that is acceptable for this huge tax plan to actually pass. One of the problems that they had as well is that the tax policy center determined that many middle income Americans are not going to get a tax break, but actually that their taxes will go up in the next decade or so. And that is where the White House is weighing in, saying that is not acceptable.


MICK MULVANEY, WHITE HOUSE BUDGET DIRECTOR: In Washington, D.C. you can go out and hire anybody you want to get them to say whatever number you want them to say, right?


MULVANEY: If our numbers here at the White House, actually show the same thing, if they show that taxes are going up on the middle class, on the House plan, on the Senate plan, on some combination of the two, we won't sign it.


MALVEAUX: So that's Mick Mulvaney, the director of the OMB and that is the president's position as well. This is a promise that he made that he intends to keep. We'll see how that goes. But of course, we're looking at the Senate and the House whether or not they are able to reconcile the differences between their versions of the bill and whether they can come up with the money to actually support this. John, Poppy?

HARLOW: Suzanne, thank you very much. Keep us posted.

Also, this morning, a major about-face from President Trump who is now lavishing praise on the country that he very recently accused of being many not so pretty things including the currency manipulator, thief and worse.


DONALD TRUMP, PRESIDENT OF THE UNITED STATES: We can't continue to allow China to rape our country, and that's what they're doing. It's the greatest theft in the history of the world.

I don't blame China.

After all, who can blame a country for being able to take advantage of another country for the benefit of its citizens? I give China great credit.


BERMAN: The first part was from the campaign, the second part from overnight standing next to the Chinese leader.

CNN's Kaitlan Collins, live for us in Beijing. Definitely a change of tune there, Kaitlan?

KAITLAN COLLINS, CNN WHITE HOUSE REPORTER: Certainly, John. That's way different than what the president said on the campaign trail when he promised to label China a currency manipulator and now not only is he not blaming China for the trade imbalance. He was praising them for it and putting the blame, instead, on past United States administrations, which is certainly something new that we are seeing from the president as he wraps up his two-day trip here in Beijing, lots of flattery, lots of praise on behalf of the president to Chinese President Xi Jinping. And another note from those joint press statements today, President Trump did not take any questions from reporters, which is quite different than what we've seen from presidents like Bill Clinton and George Bush here in the past.

[10:05:00] When I asked the press secretary, Sarah Sanders, why the president was not taking any questions from reporters, she said it was because the Chinese insisted on taking no questions during that press conference, which certainly raised a lot of eyebrows because it is the United States. It is a democracy where we have people like reporters ask tough questions, but we didn't see any of that today. Certainly a big change in tone from the president on what he thinks of China, John.

BERMAN: All right, Kaitlan Collins for us in Beijing. Quickly Kaitlan, any news on plans between the president to meet with Vladimir Putin tomorrow?

COLLINS: Yes. There's been a lot of talk, John, about a potential pull aside for the president and Russian president Vladimir Putin at that economic summit in Vietnam. Secretary of State Rex Tillerson was actually asked about it as he briefed reporters here at this hotel that I'm at now today. And here's what he had to say about it.


REX TILLERSON, SECRETARY OF STATE: Clearly the leaders are going to be at the summit together. It wouldn't be at all unusual if they ended up with some kind of a pull aside. The question is whether we've got sufficient substance and we're working with the Russians, as you know, on a number of very difficult areas.


COLLINS: Now Tillerson did not say that a meeting has been nailed down between Putin and Trump, but we know that a Russian State News Agency is saying that the meeting could happen on Friday in Vietnam. It certainly would be a remarkable meeting, John and Poppy, because as the investigation into Russian meddling in the 2016 presidential election hangs over Washington.

HARLOW: Kaitlan, thank you.

Back in Washington, right now, on Capitol Hill, a ceremony is getting under way, a very important morning to honor five police officers who helped take down the active shooter at that Republican Congressional baseball practice in June.

Our Sunlen Serfaty is there, really important morning, Sunlen.

SUNLEN SERFATY, CNN CORRESPONDENT: It certainly is, Poppy. Most certainly will be a very emotional moment up here on Capitol Hill. A pause, if you will -- politics at the moment. These five officers will be given the highest award given by the U.S. Capitol Police Department for their efforts back in June at that Congressional baseball practice in Alexandria, Virginia, just outside of the beltway here in Washington, D.C., for their bravery. Two were injured, taking down the shooter, potentially protecting the lives of many others at the about baseball practice.

Today there will be an hour-long ceremony up here on Capitol Hill. Nancy Pelosi, Paul Ryan, Mitch McConnell, Chuck Schumer, all coming out, really speaking to how politics will most certainly take a back burner today, while they honor these officers here. I think a lot of people are most interested in hearing from Representative Steve Scalise. He will be speaking here. He of course was injured, shot in that shooting, took him three months to recover. He was out of Congress. He made a valiant return back up here in September. I just saw him going to in. He was all smiles. He says he looks forward to today, this certainly a moment of pause in the midst of all the politics to honor these officers. Back to you.

BERMAN: All right, Sunlen Serfaty for us on Capitol Hill. We look forward to hearing from Congressman Scalise. We will keep our eye on that going forward. All right, so why the about-face on the president, those harsh words for China during the campaign, overnight a radically different tone. We'll discuss that coming up.

HARLOW: And former national security adviser Michael Flynn and his son in the headlines. Could the father try to protect the son and make a deal with Mueller's team? Much ahead.


[10:13:10] HARLOW: All right. We do have breaking news. The man alleged to have attacked Senator Rand Paul, in court today, pleading not guilty to the charges against him.

Let's go to our Drew Griffin who is in Bowling Green, Kentucky, outside the courthouse. What else can you tell us about the plea?

DREW GRIFFIN, CNN SENIOR INVESTIGATIVE CORRESPONDENT: It is going to tell you, Poppy, that the mystery of the great lawn attack on Senator Rand Paul is going to linger a few days because we have still got no explanation as to why this took place. Rene Boucher, Senator Rand Paul's neighbor of 17 years, went into court this morning to an arraignment on his charges. He pled no contest. He waved the reading of those charges and within a few minutes it was gone.

His attorney, Matt Baker, on the way in, said he would talk to us, but then gave us the slip on the way out. So we still don't know what the motive is. We've talked to some neighbors who say this was a long- standing dispute over yard waste. There's been some other right wing press coverage saying this has to do with the fact that one man is a very liberal Democrat, the other man is a very conservative Republican. But again, this debate, this feud, this very serious attack between two neighbors we still don't have a motive in this. Poppy?

HARLOW: Very serious, broken ribs.

BERMAN: Six broken ribs.

HARLOW: Six broken ribs. Drew Griffin, thank you for the reporting.

BERMAN: All right, a lot going on in the political world. Want to discuss it right away.

Joining us now, CNN political commentators, Matt Lewis and Patti Solis Doyle. Matt, I want to start with you because the White House and Republicans in Congress are selling their tax cut this morning hard as a middle-class tax cut. It is so important for them to push that narrative. Yet, moments ago, the White House economic adviser Gary Cohn was doing an interview and he said the whole trickle-down through the economy referring to this as trickle-down economics. The whole trickle-down through the economy that's good for the economy and he added the most excited group out there are big CEOs about our tax plan.

[10:15:05] Now, you can argue whether or not trickle-down economics is good. You can argue whether or not CEOs should be pleased about this or not. The questions is, Is this a smart way to sell it when everyone else is hell bent on selling this as a middle class tax cut.

MATT LEWIS, CNN POLITICAL COMMENTATOR: It's really stupid and interestingly, this was a mistake made during the Reagan years when the CBO director Stockman called it trickle-down economics. I mean look, there's certain words that have negative connotations. I mean, you know if you call somebody a reactionary that is bad. If they're conservative that might be good, right? And I think you can make a very defensible argument for supply side economics, even the theory that corporate taxes are the highest in the developed world in America and cutting them would create nor jobs, stimulate the economy. That's all utterly defensible. When you call it -- when somebody who presumably works for the Trump administration who wants to do this, calls it trickle-down, they are hurting the cause.

HARLOW: And when he says that the big CEOs are going to like this the most.

LEWIS: Then that's just idiocy. You can't defend that.

HARLOW: Patti, to you, Budget director Mick Mulvaney came out, who is a fascinating interview that Erin did with him last night on CNN. And he said, look, if this thing really proves that it is not going to, you know, that it is going to raise taxes on the middle class in the next decade or a big chunk of the middle class in the next decade like the independent policy centers are saying, we're not going to sign it. What kind of bind are Republicans in right now, that's the message from Mulvaney and the White House. Every independent analysis shows about a quarter of homes will see their taxes go up a decade from now. So what gives?

PATTI SOLIS DOYLE, CNN POLITICAL COMMENTATOR: Well, they're in a very big bind because of what happened on Tuesday night in the shellacking they got in the races in New Jersey and Virginia and across the country. It is do or die for the Republican Party right now, to get something done. They need a legislative accomplishment before heading into the 2018 races and tax reform is sort of their last chance to do that. And if they can't get that done, they're in big trouble.

And in terms of helping the middle class, these tax cuts. We're very unclear whether it helps the middle class or not. Many independent studies are saying that it absolutely does not. And then you have members of Congress, Republican members of Congress, saying things like -- I mean Lindsey Graham said today, that, you know, their donors are not going to give them more money unless they get this done, which is ridiculous. It only adds to the terrible arguments of this is, you know, important for CEOs. The middle class seems to be left out in this.

BERMAN: I don't think the issue is whether or not the middle class on average will be helped.

HARLOW: Right.

BERMAN: The analysis is showing at every tax bracket there will be people on average who receive breaks. Who receive the most breaks and what is this --

HARLOW: And how long do they last.

BERMAN: How long do they last was among they're geared to, you know, the corporations receive the most, period. Matt Lewis, 36 hours now to digest, you know, the election outcome. This plays into it. Look, Republicans need something because they got shellacked on Election Day and they want to point to some legislative victory here. Where is the thinking right now inside the party on what end and where to go?

LEWIS: Well, look, I think that we're still wrestling with that. You can make a really legitimate argument that says look, Virginia is a state that Donald Trump managed to become president, but he lost Virginia. So this is Virginia. It's a Democratic state. I think five out of the last six governors of Virginia have been Democrats. It's no longer even purple. It's now blue.

And so what happened Tuesday night you could argue is not catastrophic. However, I think if you look at the magnitude of the losses, the entire Republican ticket and the down ballot races, you really can't get away from the fact that this was a shellacking. And look, the presidents go through this. Barack Obama had some bad mid- terms and certainly the off year, right, when Bob McDonnell wins in Virginia and Chris Christie wins in New Jersey. He was able to bounce back. But you can't look at this and say it's anything other than a disaster at least for now. HARLOW: So, Patti, if you haven't read Matt Lewis' piece yet this morning, I will give you a break and just give you the headline. And he said one of the biggest losers in all of this is Steve Bannon. Steve Bannon went on Fox last night and said Mitch McConnell should tender his resignation right after tax reform, right after they -- he hopes gets this thing done. What do you say about that coming from your Democratic lens?

DOYLE: Yes. I think Steve Bannon is a huge loser here. Look, Democrats won across the country. Not just in Virginia but let's talk specifically in Virginia about the House delegates. The Republicans have been in control of the House delegates for 17 years and Democrats are very, very close to winning that back. Black people, brown people, transgender people, women, won across the country. And that is a direct rejection of Trumpism and of Steve Bannonism.

So I think yes, the big loser here is Steve Bannon, Donald Trump, and this divisive -- this strategy of divisiveness that has been coming out of the White House for the last year.

[10:20:09] BERMAN: Patti, sticking up for Mitch McConnell here.

HARLOW: I know. I was wondering about that. Part two of the question. We'll have to get back to that because we're out of time guys. Thank you very much, Patti Solis Doyle and Matt Lewis.

The Russia investigation hitting really close to home in-house really for the Flynn family. Former national security adviser Michael Flynn, our reporting from multiple sources, he's very worried about what this could mean for his son's legal future. We will have more on that ahead.


[10:25:00] BERMAN: All right, new this morning concerning Michael Flynn, the president's campaign adviser and first national security adviser. CNN has learned that special counsel's investigation that the general is concerned that it could be a problem for his son.

HARLOW: Multiple sources tell CNN that Michael Flynn believes that his son, Michael Flynn Jr., could be exposed to some kind of action or pressure in the special counsel investigation of Russian election meddling, potentially much more.

Here to discuss, CNN national security and legal analyst Susan Hennessey. You've written some fascinating things on this and we'll get into them. Do you see the special counsel here using -- Mueller clearly using Flynn Jr. as leverage in this investigation and how effective would it be?

SUSAN HENNESSEY, CNN NATIONAL SECURITY AND LEGAL ANALYST: Right. We've seen multiple media reports now claiming that -- Mueller's investigation has enough evidence to indict both Flynn Sr. and Flynn Jr., so the questions arise why hasn't he done so, attempting to seek Flynn Jr.'s cooperation. In order to understand the possible impact of Flynn Jr. being in legal risk here, you don't have to be a legal analyst, you just have to be a parent. You know it's sort of human psychology that you wouldn't want your child to be at risk, especially really for actions that they undertook at your direction, sort of related to your work. And so really the question here is as a psychological one to what extent is this going to change the incentives for Flynn Sr. about whether or not he's ultimately going to want to cooperate with Mueller's investigation.

BERMAN: So much of the criminal exposure for both Flynns centers around foreign lobbying and record keeping and in some cases money or money laundering. That would be the allegation there. How is that connected to what you so often write as the affair -- Russian meddling in the U.S. election?

HENNESSEY: Right. So like sort of the Paul Manafort indictments, some of the allegations against Flynn probably aren't sort of related to this core issue of collusion. They're related to you know secondary business dealings, some of which actually may prompt uncomfortable questions for the White House, but sort of aren't directly Russia related.

However, unlike Manafort, there are actually some sorts of Russia specific questions here. So one of the issues is whether or not Flynn reported income that he had received for an appearance at this RT gala in Moscow in 2015. So he has two lines of trouble there. One is that retired military officers actually have to seek permission in order to accept payments from a foreign government. He reportedly did not do that.

The second issue is whether or not he disclosed those payments on his security clearance form. It's a felony to lie on a security clearance form. And then whether or not he disclosed the full nature of his payments both from Russia and others in interviews with federal investigators. So really, he is -- some of these charges even that sort of seem more technical in nature might be directly related.

There are also some sorts of questions here, sort of that are central to the question of Russia collusion that might not go to a criminal indictment, but only Michael Flynn can answer. You know, we've heard a lot about this phone call between Michael Flynn and Russian Ambassador Sergey Kislyak. You know Flynn actually was ousted because he lied to Vice President Mike Pence about whether or not they had discussed sanctions on that call. He did, in fact, it was later reported discuss sanctions.

What we don't know is what about sanctions. Did he say -- President Trump was not present at the time, did Michael Flynn make some kind of representation about the Trump administration's plans with respect to these sanctions. Did he do so at the direction of President Trump? And then based on the answers, why would they possibly engage in that kind of behavior? So there really are some sorts of core questions related to the Russia collusion issue that are simmering right under the surface and that may be why sort of his decision to cooperate or not cooperate might be critical to the future of Mueller's investigation.

HARLOW: Yes. And it was Flynn Sr. who said through his lawyer, I have a story to tell. Will he tell it? We'll see. Susan, thank you. The White House says the president will not sign any bill that raises taxes on the middle class. But also this morning, the president's chief economic adviser says, quote, "The most excited group out there are big CEOs." So can this bill make everyone happy? We're going to break it down next.