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EARLY START

Obamacare Mandate Linked To Tax Reform; California Gunman Kills Four In Shooting Spree; Zimbabwe In Turmoil After Apparent Military Coup. Aired 5:30-6a ET

Aired November 15, 2017 - 05:30   ET

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


[05:30:45] (BEGIN VIDEO CLIP)

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

(END VIDEO CLIP)

DAVE BRIGGS, CNN ANCHOR: A major move by Republicans linking Obamacare's insurance mandate to tax reform. Does the move help or hurt the tax bill's chances, and why it could mean higher insurance costs?

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

BRIGGS: Countless lives saved when a California school goes on lockdown. Police say it prevented an attack from an armed man who went on to randomly kill others.

Welcome back to EARLY START, everybody. I'm Dave Briggs.

ROMANS: I'm Christine Romans. It's 31 minutes past the hour.

After weeks of saying they didn't want to revisit the health care debate, Senate Republicans have decided to do it anyway.

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.

BRIGGS: 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 a sweeping overhaul of the tax code scheduled for tomorrow.

Here's CNN's Phil Mattingly with the breakdown.

(BEGIN VIDEOTAPE)

PHIL MATTINGLY, CNN CONGRESSIONAL CORRESPONDENT: Now, Christine and Dave, for weeks, it's been on the table and for weeks, Republican leaders have made very clear they don't actually 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 mandates, 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 has been a politically toxic health care debate back into play for Senate Republicans, one that's 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's the simple answer. Money, revenue -- they need it.

The Congressional Budget Office score also shows that repealing the individual mandate creates $338 billion in deficit savings. That is money that Republicans in the U.S. Senate, if they want to be able to pass this bill with a simple majority vote, will need for their proposal.

They've made very clear they've searched high and low but 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 the child tax credit, perhaps lowering some of the individual rates for the 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, that know that this is divisive.

But their hope based on what they've seen over the last couple of 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.

(END VIDEOTAPE)

ROMANS: All right. As Phil just mentioned, repealing the individual mandate frees up $338 billion. Republicans say they want to direct that money toward middle-class tax relief. The revised Senate bill boosts the child tax credit to $2,000 and it cuts several middle- income tax brackets.

Now, eliminating the mandate injects much-needed cash into this tax plan, but it will also increase premiums and by one estimate 13 million people would forgo health insurance.

It still isn't enough to pay for across-the-board tax cuts. That is if Congress only adds $1.5 trillion to the deficit. That's a limit that they can hit and still pass the bill with a simple majority. So, individual tax cuts would expire by the year 2025. The lower corporate tax rate is immediate and permanent. It opens the GOP up to criticism it favors businesses over everyday Americans.

Now, the administration says corporate tax cuts will boost worker pay eventually but there's no guarantee.

In fact, here's what CEO's said at a "Wall Street Journal" event with economic adviser -- White House economic adviser Gary Cohn. These CEOs were asked what they would do with the money they get from their tax cuts.

(BEGIN VIDEO CLIP)

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

GARY COHN, DIRECTOR, NATIONAL ECONOMIC COUNCIL, CHIEF ECONOMIC ADVISER TO THE PRESIDENT: Why aren't the other hands up?

(END VIDEO CLIP)

[05:35:10] ROMANS: That's Gary Cohn. Why aren't the other hands up? Very few raised their hands.

BRIGGS: Because, presumably, they make decisions based on the market --

ROMANS: Supply and demand, and a lot of CEOs --

BRIGGS: -- not based on profits.

ROMANS: -- have been saying look, if they get their tax cuts they're going to put those into share buybacks and dividends, giving back to investors.

BRIGGS: All right. Let's discuss all of this with political economist Greg Valliere, chief strategist for Horizon Investments. And, from Washington, "CNN POLITICS" digital director Zach Wolf. Good morning, gentlemen.

ROMANS: Hi, guys.

GREG VALLIERE, POLITICAL ECONOMIST, CHIEF STRATEGIST, HORIZON INVESTMENTS: Good morning.

BRIGGS: Greg, Christine asked is it crazy, is it brilliant getting rid of the individual mandate together with tax reform? Which is it?

VALLIERE: Well, it's brilliant if you want to appeal to Donald Trump and the Republican base which are desperate to get Obamacare abolished, or largely abolished.

It's really risky, though, if you want to get a tax reform bill done. I thought that was the objective here and I think this really complicates the process. It could delay tax reform and it even could jeopardize tax reform.

ROMANS: Zach, the politics of it really messy because the optics, frankly, if the Democrats can seize on the idea that you've got permanent tax relief for companies, temporary tax relief for individuals, and potentially 13 million people without health insurance, that suddenly looks like the middle-class is paying and the companies are winning.

ZACHARY WOLF, DIGITAL DIRECTOR, CNN POLITICS: Right. Funding corporate tax cuts with taking health insurance form people, essentially, it will come down to that. It's not a very palatable argument, I think.

But I don't think this is some kind of sneaky thing they're trying to do. Oh, let's snit -- slip a partial repeal or gutting the individual mandate into tax reform. This is something they're doing because they have to find the money in order to get tax reform done and they know that they have to get something done.

ROMANS: Let's talk about trade, guys, because the president is back from his 12-day trip, though the headline in "The New York Times," "Trump's Mixed Messages Failed to Reassure Allies."

He says, Greg, that he's going to come back here and give a big statement about trade.

BRIGGS: And he's up.

ROMANS: And he's up. He's just tweeted.

"Our great country is respected again in Asia. You will see the fruits of our long but successful trip for many years to come."

Not -- no surprise why I think "The New York Times" is critical in its analysis of what was accomplished there.

But, Greg, what was accomplished there? You've got these other 11 nations that are going ahead with a trade -- a trade deal without the United States.

VALLIERE: Yes. I really think, Christine, the big story coming out of this trip was trade -- was Trump's repudiation of multilateral trade deals. Maybe we'll get some bilateral ones with Canada and the U.S., the U.K. and the U.S.

But I think he sent a signal in his speech in Hanoi that he wants to get out of NAFTA. I wouldn't be shocked if NAFTA, in the next few days, looks like it's on really thin ice.

And here's an irony. Who's hurt the most by getting out of NAFTA?

ROMANS: Yes.

VALLIERE: It's the agricultural community. It's in the Midwest where Trump needs votes. If he's going to run again, those are Electoral College votes that he could perhaps lose.

BRIGGS: What the president needs to weigh in on after he talks trade is what "The Wall Street Journal" calls the Roy Moore mess because it is clear Roy Moore is not getting out of this Senate race, Zach, and Republicans Mitch McConnell, Paul Ryan, on down the line have called for him to get out.

Even Sean Hannity said on his program last night that Roy Moore has 24 hours to clear up some of the inconsistencies, including why his latest accuser had a yearbook signed by Roy Moore when he was a 30- year-old D.A.

What is the best case scenario for Republicans and how do you expect the president to weigh in?

WOLF: I mean, Republicans need to have a Republican in that seat. It's a reliably Republican place.

You saw Mitch McConnell sort of hint yesterday that maybe they should put Jeff Sessions in some sort of write-in campaign -- bring him back from being attorney general. You know, Trump doesn't -- hasn't been happy with Sessions. It's not clear if Sessions would want to do that.

But, Trump probably is going to have to weigh in on this. Is he going to sort of identify with these problems that Moore is facing in the waning days of this election or is he going to kind of follow the Republican herd? That's a very open question.

BRIGGS: It should be interesting.

Let's talk about the Jeff Sessions part of the story. He does not want to get out of the A.G.'s office. He wants to stay. Some want him to be the write-in candidate there.

But meanwhile, he's called before Congress yesterday to ask questions about contacts with Russia, and this was a rerun of the movie "TOTAL RECALL" from Schwarzenegger. Here's what he said --

VALLIERE: Right.

BRIGGS: -- or didn't say.

(BEGIN VIDEO CLIP)

JEFF SESSIONS, ATTORNEY GENERAL: I do not recall such a conversation. I don't recall it. I don't recall. I don't recall.

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 discussion.

(END VIDEO CLIP) [05:40:15] BRIGGS: Zach, what did we learn?

WOLF: I think we learned that Jeff Sessions doesn't recall a lot of things until he's presented with some photo evidence and then he starts to remember meetings, specifically the one with George Papadopoulos, who was the person who pled guilty after dealing with Robert Mueller.

So, Jeff Sessions' story has essentially changed on Russian involvement with the campaign several times now. His meetings with Russians on the periphery of the campaign, his meeting with George Papadopoulos. So it continues to evolve, I think is where we're at with Jeff Sessions right now.

ROMANS: Greg?

VALLIERE: I think there's another angle to his testimony. He showed no enthusiasm for another special prosecutor to go after Hillary Clinton. I think that didn't go over well at the White House and they hastened Sessions' departure to run as a write-in candidate in Alabama.

ROMANS: So much going on. All right, Zach and Greg, nice to see you both this morning --

VALLIERE: All right.

ROMANS: -- bright and early for us. Thanks, guys.

WOLF: Thanks.

VALLIERE: You bet.

BRIGGS: All right. Ahead, is one of the world's longest-serving strongmen losing his grip on power? Turmoil escalating overnight in Zimbabwe with an apparent coup in the mix. We're live in Africa, next.

(COMMERCIAL BREAK)

[05:45:53] (BEGIN VIDEO CLIP)

PHIL JOHNSTON, ASSISTANT SHERIFF, TEHAMA COUNTY, CALIFORNIA: 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 at our elementary school.

(END VIDEO CLIP)

BRIGGS: 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. They 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. The shooter rammed a stolen pickup truck through the school's locked gate and began firing through windows and walls.

(BEGIN VIDEO CLIP)

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.

(END VIDEO CLIP)

ROMANS: One student who was shot and wounded is now in stable condition.

The gunman drove off and was shot and killed, ultimately, by police at another location. His motive's not clear but a dispute with a neighbor who was found dead may have sparked this rampage. There were seven shooting scenes with four people killed and at least 10 wounded or hurt.

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

ROMANS: All right. The FBI now conducting home-by-home searches in Tampa's Seminole Heights neighborhood as they -- as they look for a killer. Police have linked yesterday's shooting death of a 60-year- old man to three other unsolved murders in the past month.

Relatives tell CNN affiliate WFLA that Ronald Felton was shot in the back as he was crossing the street to a church where he regularly helped feed the homeless.

Police have swarmed the neighborhood, stopped residents for questioning, and warned them not to walk alone at night. Still, no arrests.

BRIGGS: A manhunt underway 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. He then chartered a plane to Maui, then took a flight to San Jose, California.

Hawaii's attorney general has 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 a 29- year-old woman and acquitted based on a mental disorder.

ROMANS: All right, 48 minutes past the hour.

More legal trouble for Wells Fargo. This time it's for targeting members of the military. Details on "CNN Money Stream," next.

(COMMERCIAL BREAK) [05:53:20] BRIGGS: On the heels of President Trump's visit to Asia, China is sending a high-level special envoy to North Korea.

China's official news agency reporting the director of the Communist Party's international liaison department will travel to Pyongyang on Friday. There, he'll report on the party's National Congress held last month which gave Chinese President Xi Jinping broad new powers.

It could be seen as a win for Mr. Trump who asked President Xi to use China's influence with Kim Jong Un to resolve the North Korea crisis.

ROMANS: And political turmoil in Zimbabwe overnight in an apparent coup. It's raising the question is 93-year-old President Robert Mugabe still in control of that country he has ruled for nearly four decades.

In a speech on live T.V., a uniformed military spokesman denied there was a coup, but the situation on the ground suggests the opposite.

BRIGGS: President Mugabe is now under house arrest according to South Africa's president Jacob Zuma, who has spoken to President Mugabe. All this in the wake of Mugabe's abrupt firing of his vice president who had been considered his most likely successor.

A U.S. Embassy spokesman in Zimbabwe says the Embassy will be closed to the public today. The U.S., U.K., and Canada all urging citizens to stay indoors until further notice.

CNN's Farai Sevenzo following developments from Nairobi, Kenya and he joins us this morning. Good morning, Farai.

FARAI SEVENZO, CNN INTERNATIONAL CORRESPONDENT: Good morning, Dave.

Yes, the situation is, as you just said, it looks like an apparent coup.

It is the fact that the army took over the state broadcaster, the Zimbabwe Broadcasting Corporation, and made that statement that they want to arrest what they're calling criminals and looters in the president's circle.

[05:55:06] Now, how did we get here? We got here because three years ago Mr. Mugabe's wife Grace, 53 years old, showed signs that she wanted a higher political office and she began to sideline all those people that had created ZANU-PF, the ruling party -- Robert Mugabe's party, including former vice president Joice Mujuru and, of course, most recently Emmerson Mnangagwa was fired.

It leaves the situation in Harare a little tense but things are quiet. There are soldiers, as we've just heard from our team that's just landed in Harare that are checking I.D.s of motorists.

They are all over the airport and, of course, those scenes we've seen. There are soldiers on the streets of Harare.

It looks like that 37-year rule of Robert Gabriel Mugabe, one of the most long-lasting -- 93 years old -- of Africa's leaders is about to come to some kind of end.

We wait to hear what the Zimbabwean Army has in store for the country and, indeed, for Mr. Mugabe.

BRIGGS: Farai, thanks so much.

Meanwhile, Rainbow celebrations breaking out across Australia 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.

Prime Minister Malcolm Turnbull calling for gay marriage to be legalized before Christmas. Australia's parliament expected to begin discussing the specifics of a same-sex marriage bill as early as this week.

ROMANS: All right, let's get a check on "CNN Money Stream" this morning. It is that time.

Global stock markets lower after U.S. stocks fell, and it might be another rough day for Wall Street. Dow futures are now nearly 150 points lower.

The concern here, tax reform. Hopes for tax cuts have fueled much of the current rally and as the debate intensifies, this week is do or die here. Any sign of failure can trigger a sell-off. In fact, after seven straight months of gains, the S&P 500 is now negative for November.

Also watching shares of G.E. They had a second very bad day, dropping nearly six percent to a six-year low. Investors are unimpressed after G.E.'s CEO outlined steps to turn the struggling company around -- a reset year.

There's a good chance you own G.E. in your 401(k). It is one of the most widely held stocks in the U.S. The company, this week, also cut its dividend in half.

More legal trouble for Wells Fargo and this time it's for illegally seizing cars from service members. Federal law requires banks get a court order before repossessing cars from members of the military. The Department of Justice found Wells Fargo did not do that before seizing more than 800 cars from military members.

The bank agreed to pay $5.4 million. It will repair the credit of the service members.

Wells Fargo's auto lending division no stranger to legal troubles. Wells Fargo previously charged as many as 570,000 customers for car insurance they didn't even need.

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. Two weeks ago the CEO blamed the National Anthem controversy -- the

anthem protests -- for hurting pizza sales, claiming the controversy was polarizing their customers. That prompted immediate backlash so now, Papa John's is apologizing for its divisive statements.

Papa John's says it supports, quote, "the players' movement to create a new platform for change" but also believes that Americans, quote, "should honor our anthem."

Do you think pizza sales were hurt by the NFL controversy?

BRIGGS: I never really understood the argument, but are they still saying that those protests hurt their sales? It doesn't sound like they're backtracking away from that financial plan.

ROMANS: It sounds to me like they're trying to have their pizza and eat it, too.

BRIGGS: Yes, it does sound like that.

ROMANS: That was a terrible pun and you knew it was coming.

BRIGGS: Strong enough. Yes, I knew it was coming.

ROMANS: You knew it was coming.

Thanks for joining us. I'm Christine Romans.

BRIGGS: I'm Dave Briggs. "NEW DAY" starts right now. We'll see you tomorrow.

(BEGIN VIDEO CLIP)

MCCONNELL: We're optimistic that asserting the individual mandate repeal would be helpful.

REP. PAUL RYAN (R-WI), SPEAKER OF THE HOUSE: We want to see the Senate go first and see if they can get that done.

SEN. CHUCK SCHUMER (D-NY), SENATE MINORITY LEADER: They are cutting taxes on the wealthy and taking health care away from millions.

SESSIONS: And I have answered every question to the best of my recollection.

UNIDENTIFIED FEMALE: You're left not with a lot of confidence that he's being fully transparent.

REP. JIM JORDAN (R), OHIO: What's it going to take to actually get a special counsel?

SESSIONS: It would take a factual basis that meets the standards.

MOORE: They've spent over $30 million trying to take me out.

MCCONNELL: He's obviously not fit to be in the Senate. We've looked at all the options and we try to prevent that from happening.

(END VIDEO CLIP)

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

CHRIS CUOMO, CNN ANCHOR: Welcome to our viewers in the United States and around the world. This is your new day. It's Wednesday, November 15th, 6:00 here in New York, and we have some "Starting Line" this morning.

President Trump is back home from Asia and he has to hit the ground running. His tax plan is at a critical phase, and he has yet to really weigh in on controversial Senate candidate Roy Moore.