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House Votes On Tax Bill; Judge Declares Mistrial; Interview with Rep. Tom Reed; Paul Ryan Addresses House. Aired 1-1:30p ET

Aired November 16, 2017 - 13:00   ET

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


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ANNOUNCER: This is CNN breaking news.

WOLF BLITZER, CNN ANCHOR: Hello, I'm Wolf Blitzer in Washington. Wherever you're watching from around the world, thanks very much for joining us.

We begin with breaking news. It's crunch time in the Republican push for a massive tax overhaul. The House of Representatives set to vote any moment and Republicans are very optimistic they have the votes to pass their tax plan. We expect to hear from the House speaker, Paul Ryan, shortly. We will bring you that live.

President Trump, meanwhile, made the trip to Capitol Hill to rally Republicans just ahead of the vote in the House. The president is counting on tax reform as he looks for his first major legislative accomplishment.

As we await the vote, let's take a look at some of the highlights from the House version of the legislation. It lowers the corporate tax rate here in the United States from 35 percent to 20 percent, reduces the number of tax brackets -- or tax filers from seven to four, and limits state and local tax deductions.

It does not include the repeal of the Obamacare individual mandate that's included in the Senate bill right now. The average tax cut, by the way, would be about $1,200 next year. It drops to $860 by 2027. That according to the Tax Policy Center.

It's been three decades since Congress passed a major tax overhaul. House Republicans are cautiously confident that this is, indeed, their moment.

Let's go live to Capitol Hill. Our Congressional Correspondent Phil Mattingly is on the scene for us.

Phil, first of all, I assume the Republicans, they are very optimistic. They think they have the votes to pass their version of the tax cuts within the next several minutes.

PHIL MATTINGLY, CNN CONGRESSIONAL CORRESPONDENT: Yes, Wolf, that's right. According to the senior aides I have spoken to, some members I have spoken to as well, locked in is the words you keep hearing. They are there. They will have the votes. The question now will be how big of a vote they can get? Obviously, they know they are going to lose members. They know, particularly, some of the northeast members, the people who have issues with the state and local tax deduction, will vote no on this.

But that's not going to be enough to take down the bill. And they should have a fairly comfortable margin, I am told. That's a big, big deal, especially when you look through some of the legislative failures that have happened over the last 10 months.

But, Wolf, it's important to note. That bill that you read off very well, what's inside of it, it's just the first step. There are multiple iterations going around right now. The Senate is, obviously, moving through their version.

So, while it is a big step, it is a very consequential step. It is a step that President Trump, as he walked out of his meeting with the House Republican Congress just about 20 minutes ago, said things are going very well.

But there are many, many more steps to come and a lot of hurdles that come with those steps -- Wolf.

BLITZER: And there's one version in the House. There's another version in the Senate. The focus will shift to the Senate.

Republicans are facing some serious challenges there. Update our viewers, Phil. What's the latest state of play with the Senate bill?

MATTINGLY: So, the Senate bill right now is in committee. And they are moving through it. A lot of amendments going on right now. But there is a couple of elements here that have really started to bubble up. And you understand how complicated this process is.

And while the House victory is certainly a big deal, there is a lot left to come.

And first and foremost, you have the first opposition to the bill. Senator Ron Johnson of Wisconsin coming out last night and saying he has an issue with the pass-through entity rates. And that's, kind of, in the weeds here.

But, essentially, it's smaller business entities that pay taxes through the individual side. Senator Johnson doesn't like where that currently stands. He wants that to change.

You have Susan Collins who has issues with the inclusion of the repeal of the Obamacare individual mandate. You have people, like Bob Corker or Jeff Flake, who are concerned about deficit issues.

You have John McCain, obviously, who helped sink health care over procedural reasons. He wants to make sure the process is working well here, too.

And then, you get into the details of the bill. Wolf, just a few moments here, earlier this morning, the Joint Committee on taxation, a non-partisan group, releasing the details of their analysis of the latest version of the Senate bill.

And while in 2019 there is a significant tax cut across all income brackets, by 2021, in large part because of the repeal of the individual mandate, according to this analysis, those making between $10,000 and $30,000 a year would see an increase in taxes.

By 2027, anyone making under $75,000 a year because of the way the individual rate cuts would phase out, would also see an increase.

Republicans, Wolf, they're pushing back on that analysis. But you better believe, Democrats have seized on that. They are pushing that forward and that's going to create problems as Republicans try and move through this still very lengthy process over the next couple of weeks -- Wolf.

BLITZER: Yes, even if it passes the House, it's not yet a done deal in the Senate. A very different version in the Senate.

Phil, we're going to get back to you. Phil Mattingly is up on Capitol Hill.

We're keeping a very close eye on Capitol Hill, where the vote on the House tax plan is set to happen any moment.

Once again, though, even if it passes, as expected, some Republican lawmakers have deep concerns about the current version of the bill.

[13:05:03] Republican Congressman Tom Reed of New York, it's New York state, is joining us right now from Capitol Hill. Congressman, thanks very much for joining us.

REP. TOM REED (R), NEW YORK: Thanks for having me on, Wolf.

BLITZER: Are you going to vote for the bill?

REID: I am. I'm very comfortable with this bill, working on it in committee, working on it for the last seven years. This is the moment to move it forward and give the relief to the American people that it's going to represent.

BLITZER: One of the major concerns, though, if Republicans from high- tax states like New York state, you're from western New York, is the possibility of eliminating of what's called the SALT deduction, the State and Local Tax deduction.

That's going to impact -- if it goes through and the Senate version completely eliminates it, you have a partial elimination in the House. It's going to increase taxes for a lot of your constituents. Are you deeply concerned about that?

REED: Well, I'm very confident. Given where the Senate's complete elimination of the state and local tax deduction is something I will not support and will fight against. That a compromised position, like we see with the property tax deduction, retention up to $10,000 for property owners. In our area, that's a lot of relief, in western New York.

And I think this is going to get better, in my opinion, through the Senate conference committee process that we envision happening as we go forward.

BLITZER: So, if the Senate version, where the complete elimination of the state and local tax deduction is passed, you will vote against the tax cut, the final version, if it should emerge along those lines?

REED: Well, if I made my position very clear, I cannot support the complete elimination of state and local tax deduction. So, I'm very confident where we are in the House. It is the first step.

And we're going to do even more advocacy to make sure that we're representing the people back home and give them additional relief, if we can get that through the conference negotiation with the Senate. I'm confident we can get there, but we're going to keep fighting.

But at a minimum, we have to keep the property tax portion of the state and local tax deduction.

BLITZER: As you just heard our Phil Mattingly report from Capitol Hill, the new assessment from the Nonpartisan Joint Committee on Taxation. And you heard him report it, people making between $10,000 a year and $30,000 a year would see tax increases by 2021.

How do you justify raising taxes on someone making between $10,000 and $30,000 a year?

REED: You know, we'll take a look at that analysis. I really do appreciate the Joint Committee on Taxation and their work.

And any final bill is going to take care of that type of conclusion that they've come to. Because that is not the intention of we're doing here.

As a Republican member of the Ways and Means Committee, I can guaranty that those folks are going to get tax relief, no tax increases. And as we go through this process, we'll make sure we fix any of those type of consequences.

BLITZER: Congressman Tom Reed of New York, thanks so much for joining us.

We have breaking news coming in from the corruption trial of New Jersey Senator Robert Menendez. The judge has just declared a mistrial.

Let's go to our Justice Correspondent Jessica Schneider. She is joining us now with the latest.

Jessica, update our viewers.

JESSICA SCHNEIDER: Well, Judge, this -- I'm sorry. Wolf, this is what the judge has just told the jurors right before he dismissed them. The judge saying, I find that you were unable to reach a verdict and that further deliberations would be futile and there is no alternative but to declare a mistrial.

So, to take you through what's happened today. It was just about two hours ago that these jurors, once again for the second time this week, amid their 15 hours of deliberations, they gave the judge a note saying that they were unable to come to a unanimous verdict.

In the past two hours, the judge has actually been interviewing these jurors one by one, in the presence of Senator Menendez as well as Dr. Melgen and their attorneys.

Now, what's interesting is they got through the foreman of the jury. They got through jurors number one and two. But it was juror number three who was inside the judge's chambers, apparently being interviewed by the judge for a grand total of 40 minutes. That is an extensive period of time for a juror to be interviewed one on one.

So, one might take from this that it was juror number three who, perhaps, was maybe the lone holdout or one of the holdouts here.

And, perhaps, in expressing their views, their thoughts on this deliberation to the judge, the judge determined there was no way this juror was going to change his -- or her, actually, it was a female; it was a woman, juror number three -- was going to change her mind.

So, the judge, after talking with this juror, has, in fact, declared a mistrial in this case, saying it would be futile for these jurors to continue any more deliberations.

And just to, really, point out, Wolf, this was a very difficult case here. This was a bribery and corruption case against a sitting senator, Democratic Senator Bob Menendez from New Jersey.

And what's difficult about this case is in 2016, the Supreme Court actually decided that to convict on these types of bribery and corruption charges for a public official, there has to be a very specific quid pro quo. There has to be a specific payment for a specific act.

And what was alleged in this case of Senator Menendez was that he had this 25-year friendship with a doctor who often flew him on a private jet to different locations, Paris, Florida.

[13:10:05] And in exchange, prosecutors argued, Senator Menendez had meetings with Obama administration officials, may have tried to influence official acts that may have benefitted Dr. Melgen.

The problem with this case is it was a little bit of a muddied situation here. The defense team argued, look, this was a 25-year friendship. There was no specific quid pro quo here.

It was merely Senator Menendez acting because he believed that some of these issues, raised perhaps by his friend, Dr. Melgen, they needed to be addressed.

So, these are very difficult cases here. We've already seen, in the second circuit involving New York state lawmakers, convictions for this type of charge overturned because of that 2016 Supreme Court case that, really, refined what it would take to define official acts and to actually convict on a corruption or bribery charge.

So, to recap for you, Wolf, this case against Senator Menendez has been declared a mistrial. It's unclear, at this point, if government prosecutors will aim to go back and try this case again.

It may come down to exactly how many holdout jurors there were and whether or not those jurors wanted to acquit or convict.

So, this trial, for all intense and purposes, is over. The question being, will the government attempt to or will they decide to retry this case against Senator Menendez.

But, for now, the defense essentially getting a victory in this mistrial -- Wolf.

BLITZER: Good point. All right, Jessica, thanks very much.

Paul Collins, our Legal Analyst. So, what do you think, Paul? First of all, your analysis of what we just heard, the mistrial declared in the Bob Menendez trial and what happens next?

PAUL COLLINS, CNN LEGAL ANALYST (via telephone): Well, the method of the mistrial was kind of fascinating, Wolf, in that usually the judge doesn't inquire of all 12 jurors. They usually come back with a note. They say, we're deadlocked. He'll send them back out to deliberate.

And then, a second note comes in and, generally, that's all that's involved. To have interviewed individual jurors is somewhat unusual.

I think that, in the long run, I would say it's unlikely that Menendez is going to be tried again, unless prosecutors have new evidence, or they become convinced that it was only, you know, a single holdout against a strong majority favoring conviction.

And the reason for that is that ruling that came down in 2016 makes it extraordinarily difficult now to convict a politician for bribery, unless it's crystal clear that something of value is passed to the politician in exchange for a specific promise to do something.

And this case involves something called stream of benefits which that was the big theory the prosecution alleged that giving a lot of things to Menendez over a lengthy period of time really had bought his assistance on all matters. And that, the court has held, is too vague. You can't, really, convict on that kind of evidence.

So, I think it's going to be a lot hard harder to convict politicians of bribery in the future, as a result of this verdict.

BLITZER: Well, clearly, this jury could not convict and that judge has declared a mistrial.

Jeffrey Toobin is with us as well. Jeffrey, what's your analyst and do you think there will be a retrial? JEFFREY TOOBIN, CNN CHIEF LEGAL ANALYST (via telephone): Well, first

of all, you know, I think people who are, you know, not familiar with the legal system are inclined to think of (INAUDIBLE) a victory for the defense.

In federal court, the government wins about 90 percent of the cases that go to trial. So, one that doesn't end in a conviction is certainly a win for the defense.

As for whether there will be another trial, again, I think Paul said this, that some of it will depend on how this jury split. You know, if it was 11 to one for conviction, I think a retrial is likely. If it's 11 to one for acquittal, I think a retrial is unlikely.

The Supreme Court decision, that Paul was referring, which comes out of the overturned conviction of the former governor of Virginia, was a unanimous decision by the Supreme Court. The liberals and conservatives alike limited these prosecutions.

And it has been an act of (INAUDIBLE) awful for prosecutors. This decision has been a disaster for prosecutors who are trying to stop government corruption.

And I think it may -- since we (INAUDIBLE) prosecutors here to throw in the towel because of these cases have just become so difficult because of the McDonald decision.

BLITZER: Yes, which suggests, Jeffrey, that there may not be another trial if it's so difficult to convict, based on that unanimous Supreme Court decision. It's a factor that the federal prosecutor certainly are going to have to consider.

TOOBIN: Absolutely.

And, you know, also, you know, this (INAUDIBLE) you have to consider that is a Democratic senator who is being prosecuted now by a Republican Justice Department, although the case was brought when -- during the Obama administration.

[13:15:15]

The political stakes of this case have reduced substantially because New Jersey will shortly have a Democratic governor. So even if Menendez is somehow convicted in a second trial, the new governor, Governor Murphy, will presumably appoint a Democrat. So the fact that Murphy is replacing Chris Christie, a Republican, has lowered the political temperature around this case considerably.

WOLF BLITZER, CNN ANCHOR: Yes, that's another important point as well.

Dana Bash is with us. Dana, you've been watching the political fallout from this. So he's -- Bob Menendez, he's a United States senator --

DANA BASH, CNN CHIEF POLITICAL CORRESPONDENT: Yes.

BLITZER: And he's going to remain a United States senator. BASH: Definitely for the short-term.

Look, this is -- these are charges that have been dogging him for years. And this is a trail certainly that he and his fellow Democrats were dreading. And, for a while, because of all the issues that Jeffrey was just pointing out, of how difficult it is to try and convict any politician in a public corruption case, they weren't really sure inside team Menendez if this would actually come to trail.

Well, it did. And no question a mistrial is not -- or a hung jury is in no way saying that he's innocent, but it certainly isn't saying that he's guilty. And that has to be and will be taken as a victory for Senator Menendez and for his allies on Capitol Hill and for his whole team.

And, at the end of the day, this was another -- just on the pure politics of this -- this was another sort of wrinkle, big wrinkle, that Democrats were a little concerned that they would have to deal with if he was convicted, what would they have done? What would happen? Would he have resigned? Would he have to be expelled? And then, until January, there's a Republican governor in New Jersey, Chris Christie. So it would probably be a short -- be a short-lived Republican in the seat, but that's all moot now.

BLITZER: Yes. He's -- I'm sure he's going to make a statement, Shannon, saying, you know what, in our country, you're innocent until proven guilty. In this particular case, he has not been proven guilty, at least not yet.

Let's change gears. Paul Ryan, the speaker of the House, is speaking on the House floor in advance of this very important vote on tax cuts, the legislation before the House of Representatives. He's addressing his colleagues.

REP. PAUL RYAN (R), HOUSE SPEAKER: Mr. Speaker, we are in a generational defining moment for our country. And what we're doing here -- what we're doing here is not just determining the kind of tax code we're going to have. What we are doing here is determining the kind of country we're going to have. And right now, because of this anemic economic recovery, I mean, don't forget, we had the worst recession in our lifetimes in 2008.

And ever since then, this economy has been flat. This economy has been way under its potential. This economy has been growing at a limp 1 percent to 2 percent. And you know what that means for hardworking taxpayers? You know what that means for Americans? Nobody gets a wage increase. Living standards are stagnant. Economic anxiety is high.

Seventy-eight percent of our workers in this country today are living paycheck to paycheck. Most Americans say that they don't even have $500 in their bank account for an unexpected emergency or an expense.

This is the economic anxiety that's for real in this country today. Instead of thinking about getting ahead, families are just struggling to get by. Think about all the moms and the dads and the hardworking taxpayers going to bet tonight, not sleeping, worried about what comes next week.

This is not how it should be. This is not how it is in this country traditionally. We need to restore growth. We need to restore opportunity. We need to restore this beautiful thing we affectionately call the American idea. Passing this bill is the single biggest thing we can do to grow the economy, to restore opportunity and to help these middle income families who are struggling.

People always ask, well, what's in it for me? You know, what -- how do I benefit from this? Well, I'm a chart guy.

Why is this important?

What this shows you under this plan, the average family at every income level gets a tax cut. A tax cut at every average level.

[13:20:00] And what this chart shows you, the people here who are struggling, the people here who are in middle income brackets, the people who are here that are low income trying to become middle income, they get the biggest tax cut.

This plan is good for people of all walks of life. All across the country. And the bigger relief goes to those who need it most.

Let's put it into numbers.

A typical household of four people. They make $59,000 in this country. That family of four, $1,182 tax cut the first year alone. The median family income, mom, dad, two kids, the median family income in America today is $87,000. That family will get a $1,941 tax cut right away, year one.

So if you're one of those 57 percent of Americans who say you don't even have $500 to go to an emergency, this really helps you.

Let's talk about those people who itemize their taxes, who live in high tax states. Let's talk about maybe a couple making $115,000 living in a high tax state. Let's say they've got $8,400 in a mortgage interest payment and $6,900 in property taxes for the year. They can still write all of those off under this plan and they will still see a tax cut of $1,130. If they got kids, an even larger tax cut.

Not only do people get to keep more of their own money in their own pocket, but we dramatically simplify the tax system. We make it more fair.

Today, seven out of 10 Americans don't itemize their deductions. That means 70 percent of Americans take what we call the standard deduction for their taxes. And it's just that. it's standard. It's straight forward. You're not taxed on that income.

But over the years, Washington has piled on special interest loophole after special interest loophole after special interest loophole. And these loopholes are skewed to the people who are wealthy, who are well-connect, who can afford all the tax lawyers and all the accounts to navigate the tax code so they can get a good deal. But if you're not in that group, if you don't have lawyers and the accountants and you're just scraping away and you're middle income, you don't get those deals. So what we want to do is take those loopholes away, make it fair for everybody, lower tax rates and make it easy.

Here's how easy this gets. We're going to make it so easy that by doubling the standard deduction, 90 percent of Americans, nine oust 10 Americans will be able to fill out their taxes on a form the size of a postcard. And what this means is, for a single person, you don't pay taxes on your first $12,000 of income. For a couple -- for a married couple, you don't pay taxes on your first $24,000 of income.

And here's the basic philosophy. Instead of jumping through all the hoops that the IRS puts in front of you, instead of doing what the special interest groups say you need to do in order to get some of your money back, we basically say, keep your money in the first place. It's your money. Do what you want with it.

All of this is about tax relief. It's about fairness. It's about simplicity. It's about easing the stress and anxiety that's in this country. But what we really need to do is we need better jobs, more jobs, faster economic growth, higher wages.

And this brings us to the way we tax ourselves as businesses. This brings us to, what do we do to make America the most competitive place in the world? Here is the real problem we've got when it comes to the way we tax our businesses. We're the worst in the world at it. We, right now, tax our businesses at the highest corporate tax rate in the industrialized world.

What does that do? Well, let me give you an example where I come from. In Wisconsin, the example is Johnson Controls. Johnson Controls is a company with a history dating back in our state to the 1880s. It was the biggest company we had headquartered in Wisconsin.

Not anymore. Because Johnson Controls is an Irish company and their Irish tax rate is 12.5 percent. This is happening all over the country. Companies, just to stay competitive, are becoming foreign companies. And when the headquarters of that company leaves your hometown, when the headquarters of that business and that employer leaves your state and goes to another country, there goes the United Way campaign. There goes the white collar jobs. There goes the manufacturing. There goes the research and development. There goes America's competitiveness. What's worse is all these foreign companies are buying U.S. companies because it's cheaper because of taxes.

[13:25:19] So here's what we do. Instead of being the worst in the pack, we leapfrog ourselves by bringing that tax rate down to 20 percent. Because, guess what, when you tax your businesses at much, much higher tax rates than our foreign competitors tax theirs, they win and we lose. We've got to stop losing. We've got to start winning. That's what this does.

What's even more impressive about this is it lowers taxes for those small businesses, those mom and pops, even more. So we've got to make sure that our businesses, the job creators of America, have every incentive to stay here, have every incentive to build here, have every incentive to hire here.

And what's more, we're finding that by doing this, we're going to get faster economic growth. We're going to get more jobs. We're going to get higher wages. Better take home pay.

Let me just break it down in simple -- simple numbers. Tax Foundation. They ran the numbers. Non-partisan Tax Foundation said, with this bill, we'll get faster growth. About 3.5 percent faster economic growth. About 890,000 new jobs. They estimate that in New York state alone, 57,834 new jobs. Wisconsin, 17,999 new jobs. California, 101,422,000 new jobs. Texas, 74,037 new jobs. And you get these new jobs when you grow this economy. You pass this bill, you grow this economy.

And so why do we do all of this? Because it's about giving people more take home pay. It's about raising wages. It's about helping families who are struggling to get ahead. It's about getting Washington out of the business of picking winners and losers and giving the American people the kind of economy they deserve, the kind of economy we can have. This just shows you that across every income scale, across the board, wages will go up because we're going to grow the economy. And most of the wage growth goes to the people who need it most. People who are in the middle. People who are struggling.

That is why we're here. My colleagues, right now we are in the middle of a long day where people are working tooth and nail in their jobs. We are right here in the middle of a day where America's workers are trying to figure out how they're going to make ends meet, how they're trying to keep up with everything. Those people, the hardworking taxpayers of this country that we represent, that is why we are here. This is why we're doing this. They are the foundation of this country. We're here today for them.

The special interests are trying to protect their piece of the pie. All the negativity you see out there, there's probably a special interest group back there trying to keep their special niche in the tax code. It is fine time -- it is high time we root that out, we don't settle for the status quo, and we give people the kind of tax code that they need and they deserve. It has been 31 years since we last did this. And it is finally time that we get the general interest of this country to prevail over the special interest in Washington.

So we know that this brings more fairness. We know that this increases take home pay and bigger paychecks and we know that this grows the economy and creates more opportunities. Faster economic growth is not going to fix every problem America has. But faster economic growth is going to help us solve every problem America has.

My colleagues, I ask you today to raise your gauge and do something bold. To see the forest through the trees. To think about the people we are here to actually represent. To think about the people who are struggling, who are going to go to bed tonight and probably not sleep because they're worried about what's going to happen tomorrow. That's what this is.

This is one of the most historic and the biggest things that we will ever do. And the reason is because this is one of the biggest things we can do to improve people's lives, to revitalize that beautiful American idea, to spread liberty and freedom. This is something that's going to refresh our confidence in ourselves and our confidence in each other.

Enough settling. Enough giving in. Let's start to reclaim our future right here in this moment, in this chamber, in in moment. Let's pass this bill.

Thank you, and I yield back the balance of my time.

[13:30:03] BLITZER: All right, you've been listening to the House speaker, Paul Ryan, on the House floor. He's selling the Republican tax plan. It's expected to pass in the House. The vote is now. The roll call is about to begin. That should last for about 20 minutes or so.