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Showdown Over Top Post At Key Watchdog Agency; Senate Tax Bill Faces Tight Vote; An American Will Join The Royal Family; Virginia Mom Faces Felony Charge. Aired 5:30-6a ET
Aired November 27, 2017 - 05:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[05:31:12] CHRISTINE ROMANS, CNN ANCHOR: One agency, two bosses. Who's in charge this morning at the bureau charged with keeping big banks in line?
DAVE BRIGGS, CNN ANCHOR: A critical path for the president this week. Can he win over enough Republican senators to pass a big tax plan, and what's being done to get them on board?
ROMANS: And big news for the royal family this morning. Prince Harry is engaged. An American actress is set to join the royal family this spring.
Welcome back to EARLY START. I'm Christine Romans.
BRIGGS: And you love yourself some royals.
ROMANS: I just -- you know, I kind of grew up watching those kids grow up and it's -- you know, we want happiness.
BRIGGS: Imagine the intrigue over there, right?
ROMANS: We want --
BRIGGS: An American divorced actress into the royal family.
ROMANS: But, Diana's kids changing the way the monarchy works. Love it.
BRIGGS: Good stuff.
I'm Dave Briggs. It is 5:31 eastern time.
The question this morning, who is running the Consumer Financial Protection Bureau? That depends on who you ask.
Well, is it President Trump's choice, Mick Mulvaney, a harsh critic of the agency who's also the director of the Office of Management and Budget, or is it Leandra English, the handpicked successor to the outgoing chief, an Obama appointee?
ROMANS: Last night, Leandra English filed a lawsuit against the president. She is seeking to block Mulvaney's appointment to run the agency. Her suit argues the Dodd-Frank Wall Street Reform law entitles her to the job. BRIGGS: But the White House says the Federal Vacancies Reform Act gives the president the right to appoint Mulvaney instead.
For context, here's what Mulvaney said in 2014 about the agency the president now wants him to lead.
(BEGIN VIDEO CLIP)
MICK MULVANEY, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET: The place is just -- it's a wonderful example of how a bureaucracy will function if it has no accountability to anybody. It turns up being a joke and that's what the CFPB really has been in in a sick, sad kind of way.
(END VIDEO CLIP)
ROMANS: The president named Mulvaney acting head after -- just after outgoing chief Richard Cordray appointed Ms. English on Friday, setting up this legal showdown now.
The administration calls Cordray's maneuver a stunt that quote "put his political ambition above the interests of consumers."
A source close to Mulvaney tells CNN he's expecting a normal transition and not some kind of face-off when he shows up at the office this morning.
BRIGGS: It should be interesting.
Senator Tom Cotton, a longtime CFPB nemesis, also backing the president.
In a statement, he calls the Bureau "a rogue, unconstitutional agency" and adds, "Leandra English's lawsuit to install herself as acting director against the president's explicit direction is just the latest lawless action by the CFPB. The president should fire her immediately and anyone who disobeys Director Mulvaney's offers should also be fired summarily."
ROMANS: This bureau was created after the financial crisis in 2008. It's meant to protect consumers and keep an eye -- a check on Wall Street.
Despite criticism from Republicans, the bureau has its share of success. The bureau ordered Wells Fargo to pay a $185 million fine and pay $5 million in refunds in the wake of that fake account scandal.
It also got more than $700 million in payouts from Citibank and Bank of America stemming from allegations the banks misled credit card customers.
All right. Congress returns to Washington this week with no major legislative achievement yet this year. It is crunch time for the GOP. Their last, best chance is the tax bill.
President Trump is already tweeting his support for tax cuts, adding that "Senate Republicans will hopefully come through for all of us."
However, the Senate bill faces a close vote this week. The GOP can only afford to lose two votes. Several Republican senators have raised objections, including Sen. Ron Johnson, who outright opposes the bill. He says it unfairly favors corporations over small business.
So, GOP leaders may increase the amount of income pass-through businesses can deduct, one of several last-minute changes, really, to win votes, according to "The Washington Post."
[05:35:00] Other possible adjustments to the bill, cutting state and local tax breaks for companies, corporations, adding back the deduction for local property taxes. That should help middle-class families in high tax states.
Overall though, the CBO finds the current Senate bill will actually hurt most Americans, especially low-income Americans. People earning less than $30,000 a year would be worse right away but by 2027, most Americans would get a tax hike. Those earning $1 million or more would still get big tax cuts.
BRIGGS: It should be a tough one to get through.
Joining us live to discuss, "Washington Examiner" commentary writer Philip Wegmann. Good morning to you, Phil.
ROMANS: Hi there.
BRIGGS: Let's talk about that tax plan. The president will meet with the Senate on Tuesday and try his sales pitch.
How does that CBO number that Christine just read impact the debate moving forward?
PHILIP WEGMANN, COMMENTARY WRITER, WASHINGTON EXAMINER: It certainly doesn't help the president, who is actually trying to get his own GOP conference on board.
The opposition for this bill is not coming necessarily from Democrats. They're universally opposed to it on principle.
But you have Republicans who are opposing their own president. Johnson, like you just mentioned. Also, you have Collins and Murkowski who have their own set of interests here.
So the margins are so small and right now it's going to be a tough sell. I think something that they're going to slap a label of tax reform is eventually going to limp to the finish line before the end of the year. But what that looks like, that's still up for debate.
ROMANS: There is this feeling though, among many Republicans, that a defeat is not an option here. That they must figure out a way to come to a center -- a center of gravity here.
The Democrats all hate it because they say this is really not middle- class tax reform as the president has sold it, but this is a corporate tax cut and a tax cut for the donor class. That's something that could hurt some Republicans, too, if that is what the public feels about this. And some of the public polling is not very popular with this tax bill.
Can a president use his popularity to turn it around?
WEGMANN: Well, the president came into office promising to make deals and be a salesman, so that's his job to really sell this bill to the public. We're not seeing anything necessarily new or novel or outside of the mainstream the Republicans haven't advocated for before so this tax bill, I think, will be white, red, Republican, orthodoxy when it comes to that.
But like you said, if Republicans aren't able to pass tax reform this year it's incredibly difficult to see how they're rewarded with majorities next year. And on top of that, though, they have to deal with the omnibus bill and a number of other things like the DACA immigration fix, and then in spending levels.
So this is the first time Republicans have controlled both chambers and the White House for a decade. They need to show their voters that they're actually getting bang for their buck and that is -- that's not just tax reform. It's a litany of other issues, as well.
BRIGGS: No doubt.
All right. You may not be old enough to remember the show "WHO'S THE BOSS?" We are. A Tony Danza classic in the 1980s.
But that's playing out in D.C. this morning as Mick Mulvaney expected to show up at the head of the CFPB and the appointee from Richard Cordray, both expected to show up as acting heads of the Consumer Financial Protection Bureau.
Backstory there is big banks are making pre-financial crisis profit levels. What will who runs this determine the future behavior for big banks here in the U.S.?
WEGMANN: Well, I'm going to have to go to "NETFLIX" "WHO'S THE BOSS?" and catch up on that reference.
I think that we're really going to see two clashing ideologies this Monday morning. You have the -- English, who is from the past administration, and now you have Mulvaney, and they come from two very different backgrounds.
The argument the Republicans are going to make is not one based off of ideology. Instead, they're going to say that this is a stunt.
They're going to point to the fact that the former administrator still had eight months in his term that was five years -- it was supposed to extend past the presidency -- and they're going to say that he turned his back and he created this crisis for some sort of political brinksmanship. So I think that on top of this larger argument about the nature and purpose of the agency you're also going to have Republicans just kind of step to the side and say wait a minute, this is an unnecessary debate for us to have. It's a creative crisis.
Let's talk about the sexual harassment scandal --
ROMANS: -- that has really infected so many different industries.
And you have John Conyers -- Congressman John Conyers stepping aside from that important post that he had on the House Judiciary Committee -- stepping aside or forced out if you read the tea leaves.
But Nancy Pelosi is saying that she -- calling him an icon and saying, you know, let the committees do their work here, but not necessarily condemning him.
What do you make of that twist to this story?
WEGMANN: Well, I think you see that Nancy Pelosi, in her defense of John Conyers, is roughly equivalent to what President Trump has done for Roy Moore.
I mean, here you have an 88-year-old Congressman with very serious allegations and actually, a settlement already, and yet, you're going to strip him of his ranking committee seat? That's a slap on the wrist.
[05:40:01] And what that signals, really -- I think that Vox had one of the defining arguments on this -- is it shows that right now, this tribalism shows that regardless of whether you're on the right or the left the political establishment is going to be with the accused, not the accuser, and that needs to change.
BRIGGS: But you're suggesting that her calling him an icon is the equivalent of the president supporting an accused child molester?
WEGMANN: I think that there are differences in degrees of the accusations but we both -- we know --
BRIGGS: Massive differences.
WEGMANN: Yes, I'm sorry?
BRIGGS: I mean, those aren't small differences, right? I mean, they're calling for an ethics investigation into John Conyers to determine exactly what happened there, so we still don't really know.
WEGMANN: Absolutely, absolutely. We need to be very careful. We can't lump allegations of sexual harassment in with rape.
But what I'm saying is if we are going to deal with this problem there needs to be a no tolerance policy. I mean, this is something that doesn't fly outside of D.C. and Hollywood.
WEGMANN: We need to say that this is unacceptable. And the way that you -- the way that you react to these if you're a political leader needs to be -- you need to be harsh and you need to come down on this.
Stripping him of his ranking committee seat, that really is a slap on the wrist and it seems temporary, not permanent.
ROMANS: Another Democrat, Al Franken -- Sen. Al Franken gave a couple of interviews with his hometown media in Minnesota and he's back at work today. Can he be effective?
WEGMANN: Well, he's effective at writing the playbook on how to deal with these allegations.
ROMANS: You think so?
WEGMANN: What Al Franken has done is he's admitted to only so much as can be proven and then said he feels very terrible. And he's kind of biding time to see if anything else comes out.
I think that what we've seen with Franken is that his presidential aspirations, if those were real, I don't think that there's any hope to those anymore. But if he can continue and serve out the rest of his term -- the people in Minnesota certainly don't like him right now, so that's an open question.
BRIGGS: Political tribalism everywhere.
Philip Wegmann from the "Washington Examiner," thanks.
WEGMANN: Thanks for having me.
ROMANS: Nice to see you this morning. Thank you.
The tax plan, by the way, will be the focus of the next CNN debate. That's tomorrow night.
Republican senators Ted Cruz and Tim Scott, and Democrats Bernie Sanders and Maria Cantwell will square off. That's tomorrow night at 9:00 eastern only on CNN.
All right, we have some breaking happy news this morning.
Word from London that Prince Harry has announced his wedding engagement to American actress Meghan Markle. Kensington Palace announcing the two are set to wed in the spring of 2018.
Let's bring in CNN's Max Foster in London. Good morning, Max.
And we're looking at pictures of the happy couple. They were in, I believe, Toronto earlier this year for a charity event that the Prince is very well-involved in. There you can see. So we've seen them in public. Presumably, she has met the family and the Queen must have been asked,
right, for her permission?
What do we know?
MAX FOSTER, CNN LONDON AND ROYAL CORRESPONDENT: Well, she says she's delighted, the Queen. Prince Philip, as well.
These images were interesting because this has been such a closely- guarded secret. Not only a secret, they did announce that they were going out together earlier in the year when there was a lot of frustration with the media reaction and all the digging into Meghan Markle's past.
But the images you're looking at there were their first official pictures in front of an organization media pack, so that was a really big moment -- a big test for her. It was over in Toronto. Invictus is a sporting event that he's involved in and she was showing her support for his work there.
This afternoon, they'll appear in public at Kensington Palace and that's really the big official moment. But they've been very careful about keeping this very private.
But we now know that they're going to be getting married in the spring and everyone's delighted.
I've been literally sinking under statements from various people, including one that I just received from the prime minister who's saying she'd like to offer her very warmest congratulations to Prince Harry and Meghan Markle on their engagement.
ROMANS: So he is what, fifth in line to the throne, right?
ROMANS: Fifth in line to the throne.
FOSTER: He's about to go down a notch in the spring, in fact, when his new nephew or niece is being born. So he's not as senior as Prince William or any of his children and that does actually give him a lot more freedom in terms of how he wants this wedding to play out.
He may not choose to have it at Westminster Abbey. He might have it in L.A. I mean, this is quite a rebellious member of the family.
FOSTER: And because he's not as high up the running order, as it were, he is actually free to do what he wants.
ROMANS: Good for him. We want happiness, right? Very good for him. All right, best to the happy couple.
Thank you, Max. I'm sure we'll be talking about this more as the days and weeks get closer to the wedding day in the spring. Thanks, Max. BRIGGS: Yes, it's a cool story. You can see that playing out in a movie. I mean, the divorcee American actress --
BRIGGS: -- marries the prince.
BRIGGS: Good stuff.
ROMANS: All right.
A Virginia mom is facing felony charges after trying to protect her daughter from bullies.
(BEGIN VIDEO CLIP)
SARAH SIMS, MOTHER OF CHILD BEING BULLIED AT SCHOOL: Why are you working so hard to vilify me instead of addressing the issue why this even exists?
(END VIDEO CLIP)
ROMANS: What she did when her daughter told her she was being bullied at school, next.
[05:49:23] ROMANS: All right.
The economy must be good because Americans have a lot of money to spend, and they're spending a lot of it online. Online sales is the story this year.
Black Friday's digital sales hit record numbers.
Today is Cyber Monday and that could be even bigger. Adobe predicts Americans will spend $6.6 billion. That would be a new record. It follows the $8 billion Americans spent online on Thanksgiving and Black Friday.
Meanwhile, fewer Americans are actually setting foot in stores. Early estimates show foot traffic decreased about two percent last week. Gone are those scrums at the opening of a Walmart, right?
A boom in online shopping is familiar to brick and mortar stores so this year, those retailers made big investments in their Websites and delivery options, and they offer deep discounts on things like big appliances, jewelry, tablets, T.V.s
[05:50:12] Big online sales are good news for retailers. It signals a strong start to the holiday season. Americans are expected to spend a trillion dollars this year -- wow.
BRIGGS: And you'll spend what portion of that? Nothing yet, I don't think. You've been pretty chill.
ROMANS: I didn't do anything yet. I actually was overwhelmed by all of the -- all of the things in my inbox. And a rule of thumb I always have is that if it's not 40 or 50 percent off don't do it.
BRIGGS: That's where it gets me.
ROMANS: Don't do it.
BRIGGS: And speaking of another online shopper, Alisyn Camerota joining us with a look at what's coming up on "NEW DAY."
BRIGGS: Good morning, my friend.
ALISYN CAMEROTA, CNN ANCHOR: Hi, guys. How was Thanksgiving?
ROMANS: It was great.
BRIGGS: Wonderful, and how was yours?
CAMEROTA: Mine was great, Dave. I deep fried my turkey.
BRIGGS: Oh, delicious. We've done that --
CAMEROTA: Yes, we have.
BRIGGS: -- on television before.
CAMEROTA: In our past life and I still do it. I knew you would appreciate that.
All right, guys. So listen, what's going to happen in two hours at the Consumer Financial Protection Bureau when two bosses show up, one possibly with a restraining order against him?
So how's that going to play out? That will be on our watch. We will be covering that for you.
And also, why is President Trump now telling people that it may not have been him on that "ACCESS HOLLYWOOD" tape? Huh? What does that even mean?
We have all the newest reporting threads on that, as well as the developments in the world of sexual harassment against our various lawmakers.
ROMANS: I thought it was locker talk? I thought that he had established --
BRIGGS: Locker room talk.
ROMANS: -- that it was just locker room talk. But now, it's not. CAMEROTA: We see him getting off the bus with the audio. But anyway, we will dive into why --
ROMANS: All right.
CAMEROTA: -- he says that may not have been him.
BRIGGS: And Lisa Bloom, who's defending one of the accusers of John Conyers.
We'll see you in a little bit. Thanks, Ali.
BRIGGS: All right.
A Virginia mom faces five years in prison on a felony charge for putting a recorder in her 9-year-old daughter's backpack.
Sara Simms telling CNN affiliate WAVY her daughter told her she was being picked on at Ocean View Elementary School in Norfolk. Sims said she called and e-mailed the school repeatedly but her messages were ignored.
ROMANS: So she took matters into her own hands, putting a digital recorder in the fourth grader's backpack to catch the alleged bullying. When the recorder was discovered, Sims says her daughter was kicked out of class and a month later Sims was arrested.
(BEGIN VIDEO CLIP)
SIMS: If I'm not getting an answer from you, then what am I left to do?
I don't even think surprise is the right word. I was mortified. I was terrified.
The next thing I know, I'm a felon. I've got felony charges and a misdemeanor when I'm trying to look out for my kid.
What do you do?
(END VIDEO CLIP)
BRIGGS: The Norfolk School District says electronic devices are prohibited in elementary schools but would not comment on the charges filed against Sarah Sims, charges that Sims' attorney believes will not hold up in court.
ROMANS: One would hope they pursue the bullying accusations with the same vigor as they did that -- the reporter.
Bad news for Macy's. An electronic glitch may have caused some sales big time on the biggest shopping day of the year. Details on "CNN Money Stream," next.
[05:57:09] BRIGGS: Volcanic eruptions on the Indonesian resort island of Bali forcing thousands of residents to evacuate. Thick ash shooting more than five miles into the air above Mount Agung.
The rumbling volcano also shutting down the island's main airport stranding about 59,000 domestic and international passengers. Indonesian authorities have raised the aviation alert notice to red, which is the highest level signaling an even larger eruption may be imminent.
Officials warning against any public activities within five to six miles of the peak.
ROMANS: All right, let's get a check on "CNN Money Stream" this Monday morning.
Global stock markets are mixed right now. Friday was a short trading day on Wall Street but it was enough to push both the S&P 500 and the Nasdaq to record highs. The S&P ended above 2,600 for the first time in history.
Amazon rose 2.6 percent on strong Black Friday sales -- record black Friday sales, actually. And stocks for physical retailers also fared well, including Kohl's, JCPenney, and Macy's. Foot traffic slowed, as we expected, but it held up a little bit better than feared.
Macy's stock closed at noon on Friday before this debacle. Its credit card system struggled to process transactions. There were store delays, online outages on Black Friday, the biggest shopping day of the year. Macy's acknowledged the issue but a customer still took to social media to complain.
This glitch comes at an inopportune moment for Macy's. Sales dropped six percent last quarter.
New owners for Time Inc., including the conservative billionaire Koch brothers. Iowa-based Meredith publishing will buy Time for $2.8 billion, adding "People", "Sports Illustrated", and "Fortune" magazines to its roster. Meredith publishes "Shape" and "Better Homes and Gardens" among many other publications.
The two companies are roughly the same -- worth the same, so to help fund the deal a business owned by Charles and David Koch offered Meredith $650 million. The Koch brothers are megadonors, of course to conservative causes.
In a statement, Meredith says the Koch brothers will have no influence on Meredith's editorial operations. But clearly, a new era for Time Inc. there.
BRIGGS: In a related note, you turned down the opportunity to be their person of the year. You didn't want to do that photo shoot and big interview.
ROMANS: Yes, I don't have enough time. BRIGGS: Not enough time.
ROMANS: All right.
BRIGGS: Me neither.
ROMANS: All right, 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)
ROMANS: Leandra English filed a lawsuit against the president. She is seeking to block Mulvaney's appointment to run the agency.
SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: I think the president's on good ground here.
BARNEY FRANK (D-MA), FORMER U.S. REPRESENTATIVE: This is a way to sabotage the agency.
REP. NANCY PELOSI (D), CALIFORNIA: John Conyers is an icon in our country.
UNIDENTIFIED FEMALE: Congressman Conyers announced he would be stepping down as a ranking member on the House Judiciary Committee.
SEN. AL FRANKEN (D), MINNESOTA: I am trying to be a better public servant and a better man.
UNIDENTIFIED MALE: As more and more Republicans have called for Roy Moore to drop out of the race altogether, the president has seemingly turned to support him.
UNIDENTIFIED MALE: He's now even intimating that the "ACCESS HOLLYWOOD" tape may not be authentic.