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EARLY START

Senate's Tax Bill Repeals Obamacare Mandate; Roy Moore Goes All In; Australia Votes For Same Sex Marriage; 3 UCLA Basketball Players Return to U.S. Aired 5-5:30a ET

Aired November 15, 2017 - 05:00   ET

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


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

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[05:00:07] CHRISTINE ROMANS, CNN ANCHOR: A major play by Republicans, linking Obamacare's insurance mandate to tax reform. All right. Brilliant or crazy? Does the move help or hurt chances of passing a tax bill? And why it could mean higher health insurance costs.

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 voters in Australia overwhelmingly approve same sex marriage. Now, the prime minister wants lawmakers to get it done by Christmas.

Good morning, everyone. Welcome to EARLY START. I'm Christine Romans.

BRIGGS: I'm Dave Briggs.

The president is back, so everything has changed now, right?

ROMANS: Dave is back. The president is back. Get back to work.

BRIGGS: Well, less consequential that I had returned, but we'll see how the debates all changed now that the president returned. It's Wednesday, November 15th, 5:00 a.m. in the East, noon in Zimbabwe. We'll check in there shortly. That's where the president is under house arrest.

But we start with the latest on tax reform/healthcare. After weeks of saying they didn't want to revisit the healthcare debate, Senate Republicans have decided to do it any way. The revised GOP tax bill released late last night 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: Now, conservatives in the House are lobbying their leaders to

add an individual mandate repeal 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 scheduled for tomorrow.

Following all the twists and turns, 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.

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ROMANS: All right. Phil just mentioned, repealing the individual mandate frees up $338 billion. Republicans plan to direct that money toward middle class tax relief. The revised Senate bill boosts the child tax credit to $2,000 and cuts several middle income tax brackets. Now, eliminating the mandate injects much-needed cash into the tax plan but will also increase premiums and still isn't enough to pay for the across the board tax cuts, that is if Congress only adds $1.5 trillion to the deficit, that's the limit to still pass the bill with a simple majority.

So, individual tax cuts must expire then, right? To pay for this, you have to have them expire by the year 2025. The lower corporate tax rate, that's immediate and it's permanent. Opening the GOP up to criticism it favors businesses over everyday Americans.

Now, the administration says corporate tax cuts will boost worker pay. That's the connection between what's good for companies is good for workers, but simply there's no proof. In fact, here is what CEOs said at a "Wall Street Journal" event with the president's economic adviser Gary Cohn. Watch carefully here, these CEOs were asked how they would invest their tax cuts in their companies.

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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?

(END VIDEO CLIP)

ROMANS: I know. I saw one hand, maybe two. That's Gary Cohn said, why aren't the other hands up? Very few people raised their hands. That moment was telling.

[05:05:01] BRIGGS: Let's get to Gary Cohn's answers, though, if we could. I mean, what is the answer? Why aren't they going to hire more, pay more, build more?

ROMANS: I mean, if you listens to companies on their corporate earnings calls. We'll do share buybacks. We're going to do dividends.

We want lower taxes. We want simpler taxes, but, you know, it's demand. It's demand for their products that causes them to --

BRIGGS: The market drives their decisions.

ROMANS: Absolutely.

BRIGGS: Joining us this morning to discuss all this, live from Chicago, political economist, Greg Valliere, chief strategist for Horizon Investments, and CNN politics digital director, Zach Wolf.

Good morning to you gentlemen.

ROMANS: Hi, guys.

GREG VALLIERE, POLITICAL ECONOMIST: Good morning.

BRIGGS: Greg, let's start with you and the notion of individual mandate, repealing it along with tax reform, an idea that is in the Senate now and is going to be discussed in the House. Good idea? VALLIERE: Well, you would think, guys, that if you touch a hot stove

enough, you would eventually stop touching a hot stove. They keep losing on Obamacare, so now they throw this provision in, not only could it delay passage of a tax bill, it could actually jeopardize passage of a tax bill.

ROMANS: Greg, when I look at the optics of this, though, I keep hearing the president wants middle class tax relief.

VALLIERE: Yes.

ROMANS: The president wants middle class tax relief. This is permanent corporate tax relief, temporary middle class tax relief and if you throw in the Obamacare repeal, the Obamacare mandate, you have potentially 13 million who will be without health insurance and premiums could rise. That in a heartbeat takes away the thousands dollar benefit for some middle class families of tax reform.

How do they sell it as a middle class plan when clearly it's a vehicle for corporate tax relief?

VALLIERE: The optics are terrible. I think the polls could turn against this.

So, my guess is this, that they're going to show the president and the Republican base, which are adamant that they want to kill Obamacare. They're going to show them they gave one last good old college try. It will fail because there are so many people, Susan Collins, McCain, on and on and on, who may not vote for this, but they'll try one last time.

It will fail. Then they'll pass a clean bill at some point in December. But again, it does complicate passage of a tax bill.

BRIGGS: To that notion there, Zach, does it complicate the politics of this for the Republicans if they want to get rid of the mandate?

ZACHARY WOLF, CNN POLITICS DIGITAL DIRECTOR: Yes. I don't think it's may be as controversial as we're making it out to be.

ROMANS: OK.

WOLF: Pretty much every -- you know, for the broad swath of Americans it will be. For a lot of Republicans, this is exactly what they want to do. They were unable to repeal Obamacare, so they'll take it out by some other means.

I'm not completely sure that Republicans will see that as a bad thing despite the very difficult messaging they will face from Democrats about lowering tax cuts in exchange for cutting people's health insurance. That's -- I mean, that might be an argument that they ultimately want to have the Republicans because they promised for so long that they would get rid of Obamacare and this is sort of a path into doing that. Plus, they need that savings in order to pass this bill.

ROMANS: Right.

WOLF: Don't forget, they want to pass the tax reform bill. They want to pass any bill. They want to pass a tax reform bill, tax reform, they'll take any bill. In order to do it with 50 votes, they have to find this $300 billion or more to -- for the complicated procedural reasons.

So, it's a complicated thing they're doing, but they have to do it if they want to get something done.

ROMANS: Greg, the timing has been so aggressive and optimistic from the very beginning, but the markets are telling us now that for the first time, for the first time they're doubting that something happens here.

What do you -- I mean, what do you say the chances are that they get tax reform done? Is it tax reform or is it tax cuts?

VALLIERE: Well, you could debate that. I would say that there's two problems now that the markets have to look at. Number one is with this new complication, we may not get this done by Christmas. I think Mnuchin has unrealistically set that bar too high. So there could be a delay, number one.

Number two, the bill may not be quite as grand as the president wanted. If they can't do the Obamacare provision, I think then you would have to say the corporate tax cuts are less generous. Maybe you don't have a corporate tax cut in 2018. Maybe it doesn't go down to 20 percent. Maybe it goes to 23 or 24. So the markets are starting to look at a bill that looks a little less spectacular than it did two or three months ago.

ROMANS: Yes, Steven Mnuchin, the treasury secretary, said no, 20 percent is the number they want. They absolutely want 20 percent and the earlier House version they delayed that 20 percent, a tax rate until 2019.

And the freak-outs on Wall Street over that, they want their tax cut. They want it permanent. They want it now. They want 20 percent.

BRIGGS: They'll need, Christine, every single vote, which makes this Roy Moore situation, Zach, so much more complicated because if the Democrat wins there, Doug Jones, and they could afford to lose no more than one in the Senate.

And from this sound bite from Doug Moore last night, it's clear he is not getting out of this race any time soon.

(BEGIN VIDEO CLIP)

ROY MOORE (R), ALABAMA CANDIDATE FOR SENATE: What do you think I'm going to do?

[05:10:00] 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.

(END VIDEO CLIP)

BRIGGS: All right. Mitch McConnell, Paul Ryan, they called for Roy Moore to get out of this race, even Sean Hannity of Fox News says he has 24 hours to clear up some discrepancy on this. What will the president want them to do when he weighs in on this? We hope he weighs in on this shortly, Zach.

WOLF: Yes, he's back from Asia. He's in the White House. He has to focus, I think, more fully and directly on this very big problem that Republicans have, and that's kind of the big, unanswered question. He didn't really want to endorse Moore's opponent during the primary, and now you can see perhaps Trump sees a little of his own problems last November in the problems of Roy Moore.

So, you know, is he going to follow the herd of Republicans and call for Moore to either step aside or figure some write-in system, maybe pull Jeff Sessions out of his cabinet, some complicated thing or is he going to go the Steve Bannon route, which, you know, that seems like it's little more in Trump's political persona.

ROMANS: All right. Greg and Zach, don't go away. A lot to talk about including, Greg, the president's new position on trade and what we think he'll say to the nation about what he accomplished or hopes to accomplish after that Asia trip. Thanks, guys. Come back in a few minutes.

This amazing story in California, officials say some quick-thinking teachers helped prevent a deadly school shooting.

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

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ROMANS: How a lockdown at a California school kept a shooter out before his rampage turned elsewhere.

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[05:16:19] 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.

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ROMANS: Four dead in the shooting spree in Rancho Tehama, California. But police say staff members at a local elementary school averted an even worse tragedy when it quickly went into lockdown at the school before a gunman tried to storm the building. They immediately locked the doors. Students and teachers took cover when gunfire rang out near the Rancho Tehama elementary school just before the start of classes on Tuesday morning.

The shooter couldn't get in. Got in a pickup truck, rammed a stolen pickup truck through the school's locked gate and then began firing through windows and walls.

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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.

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BRIGGS: One student who was shot and wounded is now in stable condition. The gunman drove off and was shot and killed by police at another location. There were seven shooting scenes with four people killed and at least ten wounded or hurt.

ROMANS: The killer apparently chose most of his victims at random, firing at passing motorists, firing at homes. Police say he had prior contacts with law enforcement but did not elaborate.

All right. To Zimbabwe, political turmoil escalated overnight with an apparent coup. It is raising a question, is 93-year-old strong man President Robert Mugabe still in control of the country he has ruled for nearly four decades? In a speech on live TV, a uniformed military spokesman denied there has been a coup, but the situation on the ground suggests the opposite.

BRIGGS: A 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 developments from Nairobi, Kenya. He joins us live this morning.

Mugabe, of course, is known for decades long human rights violations. What's his future?

FARAI SEVENZO, CNN INTERNATIONAL CORRESPONDENT: Well, at the moment we have to say, Dave, that his future looks far less secure than it did 24, 48 hours ago. We are saying that this is an apparent coup, even though the army denies it's a coup, because they've done all the things that lead any analysis to consider it an apparent coup. They took over the state broadcaster.

We heard in the introduction that Mr. Mugabe is currently under house arrest, confined to his residents. We've also seen several pictures emanating from social media of the police and I beg you pardon, the soldiers, that's the army, with tanks on the streets of Harare today.

So, for all intents and purposes, it seems to be a change of the guard in terms of who is running Zimbabwe.

Now, look, how did we get here? We got here because the vice president was fired? Why was he fired because Mrs. Mugabe -- Mugabe's wife, Grace Mugabe, had started gunning for the political office and she wanted that vice presidency for herself.

Now, this is complete anathema for people who ran the liberation war in Zimbabwe. They say she has no credentials to lead. She wasn't born when the vice president was arrested first for political activism in 1960.

And this is at the heart of the army's gripe. They think that the ZANU-PF, this party that ruled Zimbabwe for so long is being hijacked by what they're calling looters and people who have been stealing from the country. So, we're here now waiting to hear the army's next move.

[05:20:01] And to see, as our teams arrive now in Harare whether or not this will lead to some peaceful conclusion, already there's been tremors in South Africa about how this will be resolved. Zuma has to be resolved peacefully and it's going to be a very interesting day indeed for this long-suffering southern African nation.

BRIGGS: All right. Farai, thanks so much for that live report from Kenya.

ROMANS: All right. To Australia now, rainbow celebrations breaking out across the country after a national postal survey showed overwhelming support for legalizing same sex marriage. Sixty-one percent voted in favor of same sex marriage, nearly 80 percent of the population took part in this historic two-month referendum with every state and territory returning a majority yes vote. The Prime Minister Malcolm Turnbull calling for gay marriage to be legalized by Christmas.

Australia's parliament expected to begin discussing the specifics of the same sex marriage bill as early as this week.

BRIGGS: Massive turnout. A little different dynamic there than here in the United States.

All right. Three UCLA basketball players detained in China for shoplifting now free and back on American soil with an assist from President Trump. Andy Scholes has more in this morning's "Bleacher Report", next.

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BRIGGS: All right. We're back.

Three UCLA basketball players accused of stealing sunglasses in China are back on U.S. soil this morning.

ROMANS: Andy Scholes has more in this morning's "Bleacher Report".

Hey, Andy.

ANDY SCHOLES, CNN SPORTS CORRESPONDENT: Hey, good morning, guys.

Three players including LiAngelo Ball, younger brother of Lakers rookie Lonzo Ball returning to Los Angeles last night and they were greeted by a slew of media hoping to get answers for what happened in China.

[05:25:02] The players did not speak, but UCLA will be holding a press conference later today at 2:00 p.m. Eastern. The players will attend but are not expected to answer questions.

Players return came just hours after President Trump said he was hopeful that they would return home soon after he had talked about the situation with Chinese President Xi. In a statement, PAC-12 Commissioner Larry Scott thanked President Trump for his help in getting the players home.

All right. We may have got a final four preview last night and it's only November. Number one Duke taking on number two Michigan State. This is a high-schooling affair with both teams trading runs all game long.

Senior Grayson Allen for Duke playing every minute of the game. He made the most of those minutes, scoring a career high 37 points. Duke remains undefeated, beating 88-81.

All right. The Celtics Kyrie Irving returning last night wearing a mask after suffering a broken bone in his face. Kyrie said that masks pretty uncomfortable but didn't stop him from scoring 25 points in Celtics win over the Nets. It's Boston's 13th straight victory.

Kyrie was wearing the special shoes in the game dedicated to his mom who died when he was just 4 years old. The shoes had mom on the tongue instead of Kyrie's logo and the big rose on the side of them. In a really cool moment after the win, Kyrie took off those shoes and his jersey and gave them to two members of the United States Armed Forces who were at the game.

And, guys, you see them, they're just like little kids, getting those shoes and that jersey because pretty cool gesture there by Kyrie.

BRIGGS: Salute to service. Yes, who thought the Celtics team, the best record in the NBA at this point, huh?

SCHOLES: After losing Gordon Hayward, right?

BRIGGS: Right.

SCHOLES: One of the key pieces.

BRIGGS: Yes. All right. Good stuff, Scholes. Thank you.

ROMANS: Who would have ever guessed?

BRIGGS: I know, really surprises you.

ROMANS: Spent a lot of time thinking about that one. All right. Twenty-six minutes past the hour. Senate Republicans

trying to solve two problems at once. They're linking a repeal of the Obamacare coverage mandate to tax reform. The newest plan released late last night. Will it work? And what does it mean for your family? Next.

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