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Senate Tax Plan Repeals Obamacare Provision; Roy Moore Goes All In; California Gunman Kills 4 in Shooting Spree. Aired 4:30-5a ET

Aired November 15, 2017 - 04:30   ET




[04:31:02] SEN. MITCH MCCONNELL (R-KY), SENATE MAJORITY LEADER: Yes, we're optimistic that inserting the individual mandate repeal would be helpful.


CHRISTINE ROMANS, CNN ANCHOR: Boom. A bold play by Republicans, linking Obamacare's insurance mandate to tax reform. Does the move help or hurt the tax bill? And what does it mean for insurance costs for everyone else?

DAVE BRIGGS, CNN ANCHOR: Roy Moore says he's not abandoning his Senate bid despite years old accusations of sex abuse. Now, the RNC is pulling its funding. Will Moore's backers in Alabama stand by him?

ROMANS: And countless lives saved when a California school goes on lockdown. Police say prevented an attack from an armed man denied entry into the school, he went on to randomly kill four others.

Welcome to EARLY START. I'm Christine Romans.

A terrifying situation out there in California.

BRIGGS: It sure was.

Dave Briggs here, 4:31 Eastern Time.

We start with weeks saying they didn't want to revisit the health care debate, Senate Republicans decided to do it any way. The revised GOP tax bill released Tuesday features a repeal of Obamacare's requirement that all Americans carry health insurance or pay a fine. Republicans on the Senate Finance Committee voting unanimously to scrap the so- called individual mandate.

ROMANS: And now, conservatives in the House are lobbying their leaders to add a repeal of the individual mandate to the House Republican tax bill. The House begins debate on that bill today with a vote on the sweeping overhaul of the tax code in the House scheduled for tomorrow.

Here is CNN's Phil Mattingly. (BEGIN VIDEOTAPE)

PHIL MATTINGLY, CNN CONGRESSIONAL CORRESPONDENT: Now, Christine and Dave, for weeks, it's been on the table, and for weeks, Republican leaders made it clear they don't want to actually put it in the tax reform bill and yet, it's there, at least in the Senate version. That's the repeal of the Obamacare individual mandate, something that the Congressional Budget Office says that over the course of 10 years would reduce those with health insurance by 13 million. It also introduces what's been a politically toxic health care debate back into play for Senate Republicans, one that led to so many legislative failures over the course of the last nine months.

So, the big question is, why are they actually doing this? Here is the simple answer: money, revenue, they need it. The Congressional Budget Office score also shows repealing the individual mandate creates $338 billion in deficit savings. That is money that Republicans in the U.S. Senate, if they want to pass this bill without simple majority vote, will need for their proposal.

They made very clear, they searched high and low, this is the best way for them to get such a large chunk of money, for several wary Republican members in the Senate, providing more options on things like boosting up child tax credit, perhaps lowering some of the individual rates for middle class, those are now options that are on the table because of that $338 billion.

But make no mistake about it, Democrats have already seized on this issue. They're trying to rally the grassroots like they did throughout the health care debate.

The Republican play is this -- they know this is politically toxic. They know that this is divisive. But their hope, based on what they've seen in the last couple weeks in the tax reform process, is that the political imperative of doing something, of doing anything at this point will win out when it comes to the debate over whether or not repealing the individual mandate is good politics -- Christine and Dave.


ROMANS: As Phil just mentioned, repealing the individual mandate frees up $338 billion. You know, all of that taxpayer money that used to go to subsidies to help people afford their insurance, now that can go to pay for tax cuts. Republicans plan to direct that money toward middle class tax relief. Revised Senate bill boosts the child tax credit to $2,000 and cuts several middle income tax brackets.

It will increase health care premiums and still isn't enough to pay for a across the board tax cuts. That is if Congress only adds $1.5 trillion to the deficit. That's the limit they can hit to still pass this bill with a simple majority.

So, individual tax cuts will expire by the year 2025.

[04:35:02] A lower tax corporate tax rate that's immediate and permanent. Let me rephrase that, middle class tax relief is temporary. Tax relief for companies would be permanent. It opens up the GOP to criticism that they favor businesses over everyday Americans.

The administration says corporate tax cuts would boost worker pay, so cutting tax rates for companies is good for the middle class, but there's no proof. In fact, check out this awkward moment yesterday, the CEO round table "The Wall Street Journal" event with economic adviser Gary Cohn, the president's economic adviser, Gary Cohn.

These CEOs were asked if they would invest their tax cuts in their companies.


JOHN BUSSEY, ASSOCIATE EDITOR, WALL STREET JOURNAL: If the tax reform bill goes through, do you plan to increase investment, your company's capital investment. Just a show of hands, the tax reform goes through. OK.

GARY COHN, ECONOMIC ADVISER: Why aren't the other hands up?


ROMANS: Gary Cohn is saying, why aren't the other hands up? I saw one hand, maybe two hands go up in that room.

What I've heard from CEOs is when they get their, you know, their tax goodies, lower taxes, they're going to spend it on share buybacks and dividends on shareholders and investors, not necessarily on higher worker pay, or any factories.

BRIGGS: What's the answer to that question, why aren't the other hands up? Typically what I hear is we don't need to. We build factories when we need to. We pay more when we have to. Those interest decisions they make based on a market not based on taxes.

ROMANS: It was a telling moment there, I think. A telling moment where they're trying to sell tax reform and the very people who are going to benefit from it are saying, you know, we don't think we'll be adding a lot of jobs.

BRIGGS: Interesting, yes, that debate.

All right. President Trump back at the White House this morning after 12 days traveling around Asia, talking with foreign leaders about trade and the North Korean threat. The president had said Monday he would make an announcement on trade when he got back to Washington, but as of now, no public events on his schedule today.

ROMANS: Whatever its final form, the president previewed his trade message on Air Force One, flying home from Manila.


DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I think one of the things we really accomplished is relationship, and also letting people know from now on things are going to be reciprocal. We can't have trade deficits of $30 billion, $40 billion, $50 billion, $300 billion in the case of China, we can't do that. We have to have reciprocal trade. What's good for them is good for us.


ROMANS: White House officials tell us the president wants to make a major televised address on trade, stitching together high lights of his talks with leaders in five Asian capitals. They say he also wants to out the military deals announced at various points during that trip.

BRIGGS: Roy Moore, defiantly rejecting calls to drop out of the Alabama Senate race. Last night he made his first major public appearance since the second allegation of sexually abusing a minor was leveled against him. With establishment Republicans turning on Moore and the Republican National Committee pulling out of a fundraising agreement with him, he is counting on his loyal supporters to stand firm.

We get more now from CNN's Kyung Lah.


KYUNG LAH, CNN SENIOR NATIONAL CORRESPONDENT: Well, Christine and Dave, with national pressure mounting, it was classic Roy Moore who made a campaign stop at this rural church in Jackson, Alabama. He was utterly silent as he made his way in and out of the church, refusing to answer reporter question. But once inside, he was created to a standing ovation from the congregation and spoke about 20 minutes.

And he kept saying that it was the establishment who was trying to stop him from going to Washington, and he described it as a spiritual battle.

ROY MOORE (R), ALABAMA CANDIDATE FOR SENATE: What do you think I'm going to do? Why do you think they're giving me this trouble? Why do you think I'm being harassed from media and by people pushing forward allegations of the last 28 days of this election?

But I want to talk about the issue. I want to talk about where this country is going. And if we don't come back to God, we're not going anywhere.

LAH: This was his base and talking to some of the people after the event, they say that this is a nothing but energize them to try to elect Roy Moore -- Christine, Dave.


BRIGGS: Kyung Lah, thanks.

While most lawmakers are running away from Roy Moore, one Republican Alabama congressman Mo Brooks standing by him. On Tuesday, Brooks was hustling away from an ABC News reporter trying to ask about the allegations against Moore.


REPORTER: Do you believe Roy Moore over the women?

REP. MO BROOKS (R), ALABAMA: I believe that the Democrats will do great damage to our country.

REPORTER: So, you still believe Roy Moore?

BROOKS: I believe that the Democrats will do great damage to our country on a myriad of issues.


ROMANS: I think hustling is exactly the right word.


ROMANS: Senate Majority Leader Mitch McConnell says he spoke with President Trump during his Asia trip about the Roy Moore situation and they plan to talk more now that the president is back home. McConnell says he believes the women accusing Moore. He believes them and he thinks Moore is not fit to serve in the United States Senate.

[04:40:04] BRIGGS: Meantime, Moore's Democratic opponent in the Alabama Senate race, Doug Jones, releasing an ad with this simple message, even Alabama Republicans have had enough. They cannot vote for Moore.

And in a new Quinnipiac poll released Tuesday, 51 percent say they believe the accusations against Moore and 63 percent believe he should drop out of the race, including 42 percent of Republicans.

ROMANS: All right.

Mandatory sexual harassment and anti-discrimination training will be implemented for all House members and staff. We're talking about the United States Congress here. House Speaker Paul Ryan says the goal is not only to raise awareness but make abundantly clear harassment in any form has no place in Congress.

It follows a House hearing Tuesday in which some members raised concerns about sexual harassment in the legislative branch. Two female lawmakers accused unnamed sitting male colleagues of harassment and misconduct.

The Senate last week passed a resolution requiring senators, staffers and interns to participate in mandatory sexual harassment training. There's a reckoning in America in financial sector, in the media, in Congress, apparently, that bad behavior is just --

BRIGGS: Won't be tolerated.

ROMANS: It's not going to be tolerated. BRIGGS: There's reports of millions of dollars in settlements from

congressional sexual harassment over the decades, and no one has ever heard a whisper about it. But you can get congressional reporters will want to get to the bottom of who those two are.

ROMANS: News flash, you cannot answer your office door in a towel, please.

BRIGGS: Agree.

All right. Officials say quick-thinking teachers helped prevent a deadly school shooting.


PHIL JOHNSTON, TEHAMA COUNTY ASSISTANT SHERIFF: This individual shooter was bent on engaging and killing people at random.


BRIGGS: How a lockdown at a California school kept a shooter away before he went on a rampage elsewhere.



[04:46:24] JOHNSTON: This incident as tragic and as bad as it is could have been so much worse if it wasn't for the quick thinking and staff that our elementary school.


ROMANS: Four dead in a shooting spree in Rancho Tehama, California. But police say staff members at a local elementary school averted an even worse tragedy when they quickly went into lockdown before a gunman tried to storm the building.

The school staffers immediately locked the doors and students and teachers took cover when gunfire rang out near the Rancho Tehama elementary school, just before the start of classes Tuesday morning. Now, the shooter hell-bent on getting into the school and causing damage. He rammed a stolen pickup truck through the school's locked gate and began firing through windows and walls.


JOHNSTON: It appears that because he couldn't make access to any of the rooms that they were locked that he gave it up and reentered the vehicle and then went on his killing spree and took it to the streets of Rancho Tehama.


BRIGGS: One student was wounded by gunfire and is still in stable condition. The gunman drove off and was shot and killed by police at another location. His motives not clear, but a dispute with a neighbor who was found dead may have sparked the rampage. There were seven shooting scenes with at least ten wounded or hurt.

ROMANS: The killer apparently chose most of his victims at random, firing at passing motorists, firing at homes. He wore a tactical vest with extra magazines for his guns. Police say he had prior contacts with law enforcement, but they did not elaborate.

All right. Political turmoil in Zimbabwe overnight, raising the question, is 93-year-old President Robert Mugabe still in control of the country he has ruled with an iron fist for nearly four decades?

In a speech on live television, a uniformed military spokesman denied there has been a coup, but the situation on the ground suggests the opposite could be true.

BRIGGS: Senior U.S. official tells CNN the President Mugabe is now under house arrest. All this in the wake of Mugabe's abrupt firing of his vice president who had been considered his most likely successor.

CNN's Farai Sevenzo is following the developments from Nairobi, Kenya. He joins us live this morning.

Good morning to you.

Mugabe, of course, known for long patterns of human rights violations. What's the latest there this morning?

FARAI SEVENZO, CNN INTERNATIONAL CORRESPONDENT: Dave, I've got to tell you that even though the army is saying this is not a coup, all indications are signs of an apparent coup. They took over the state broadcasters and broadcasting corporation. They made all kinds of claims saying they are not taking over, but indeed they have.

And they've also told the other security agents, not the army that we urge you to cooperate for the good of our country. Let it be clear that we intend to address the human security threats in our country, therefore any provocation will be met with an appropriate response.

So, Dave, we're looking at a situation where the army itself is keeping the rest of the security operators, mainly the police in check. And, of course, as you rightly said, Mr. Mugabe is believed to be confined to his residence and the United States embassy in Nairobi has said today will be lightly staffed and they're urging all American citizens to stay at home and indoors because the situation is that volatile.

Now, how did we get here? We got here because Mrs. Mugabe, Robert Mugabe's wife, was going for political office. She was about to be sworn in as vice president. That's why the other vice president was fired and the army took great exception to this and said that cannot happen.

[04:50:04] She has no liberation credentials. She is 53 years old.

When Emmerson Mnangagwa, the vice president, fired, it was first arrested (ph) in 1960. Grace Mugabe had not yet been born. So, this is a power struggle about who will succeed this 93-year-old man and looks like his reign after 37 years is really starting to be wrapped up.

BRIGGS: Let's hope it's about to come to an end.

Farai Sevenzo live for us in Nairobi, thanks so much.

ROMANS: So more legal trouble and public relations disaster for Wells Fargo. Why the company was repossessing the cars of active duty military? Details on CNN "Money Stream" next.



[04:55:08] JEFF SESSIONS, ATTORNEY GENERAL: I do not recall such a conversation. I don't recall it. I don't recall. I don't recall it. I don't recall it.

I don't recall it. I don't recall that. I don't recall how that exactly occurred. I do not recall. But I did not recall this event. I don't recall -- I don't recall at this moment sitting here any such discussions.


ROMANS: The attorney general suffering from recall issues on all things Russia. Jeff Sessions on the House Judiciary hot seat and short on answers when grilled about elements of the Russia investigation. Sessions questioned about inconsistencies in his earlier statements and whether he did or did not meet with Russians on behalf of the Trump campaign.


UNIDENTIFIED MALE: Just yes or no.

SESSIONS: I had a meeting with the Russian ambassador, yes.

UNIDENTIFIED MALE: As exactly the opposite answer you gave under oath to U.S. Senate. So, either you're lying to U.S. Senate or you're lying to U.S. House of Representatives.

SESSIONS: Well, my answer to I did not meet with the Russians was explicitly responding to the shocking suggestion that I, as a surrogate, was meeting on a continuing basis with Russian officials and the implication was to impact the campaign in some sort of nefarious way.


BRIGGS: Sessions was also challenged about reports the Department of Justice is considering the appointment of a special counsel to investigate the Clinton Foundation. The possible probe stems from the sale of a uranium company to Russia's atomic agency while Hillary Clinton was secretary of state. Sessions assuring lawmakers his decision will be made without regard to bias, politics.


SESSIONS: The Department of Justice can never be used to retaliate politically against opponents, and that would be wrong.


ROMANS: Critics claim sessions ordered his prosecutors to consider appointing a special counsel after President Trump expressed frustration that he could not order the FBI to take action against the Clintons.

BRIGGS: A manhunt under way for a Hawaii state hospital escapee officials call a violent psychopath. Police say Randall Saito slipped out of the facility Sunday and taxied to Honolulu and took a flight to San Jose, California. Hawaii's attorney general charged Saito with felony escape and secured a half million dollar bench warrant for his arrest. Saito was committed after being tried for the 1979 murder of 29-year-old woman and acquitted based on a mental disorder.

ROMANS: Terrifying.

All right. Fifty-eight minutes past the hour. Let's get a check on CNN "Money Stream" this morning.

Global stock markets lower after Wall Street fell. Dow futures are now down more than 100 points.

The concern here tax reform. Hopes for tax cuts have fueled much of the current rally. So as the debate gets more complicated, any sign of failure could trigger a selloff. In fact, after seven-straight months of gains, the S&P 500 is now down for November.

Meanwhile, GE shares had a second very bad day, dropping nearly 6 percent to a six-year low. Investors unimpressed after GE's CEO outlined steps to turn the struggling company around. He warned there will be a reset year. There's a good chance you own GE in your portfolio, your 401(k). It's one of the most widely held stocks in the U.S.

All right. Outrageous legal trouble for Wells Fargo here, this time for illegally seizing cars from American service members. Federal law requires banks get a court order before repossessing cars from members of the military. The DOJ found Wells Fargo did not do that before seizing more than 800 cars. The bank agreed to pay $5.4 million, will repair the credit of the service members.

Wells Fargo's auto lending division is no stranger to legal problems. The bank previously charged as many as -- get this -- 570,000 customers, charged them for car insurance they didn't need. Some cases they already had car insurance, Wells Fargo just slapped them with more car insurance.

Papa John's trying to repair the damage caused by controversial comments about the NFL. Papa John's has been an NFL sponsor since 2010 and two weeks ago, the CEO blamed the NFL anthem protests for hurting sells, claiming the controversy was polarizing Papa John customers.

That prompted an immediate backlash. So, now, Papa John's is apologizing for its divisive statements saying it supports the players movement to create a new platform for change but also believes that Americans should honor our anthem. It wants to have its pizza pie and eat it, too, apparently.

BRIGGS: Saw that coming. Well played.


BRIGGS: All right. EARLY START continues right now with what the Republicans plan to do on tax reform.



MCCONNELL: Yes, we're optimistic that inserting the individual mandate repeal would be helpful.