Return to Transcripts main page


North Korea Launch Hwasong-15; President Trump in Between Empty Chairs; GOP Celebrates for Passing Tax Cut Bill; More Calls for Conyers to Resign; 60th Annual Grammy Awards. Aired 3-4a ET

Aired November 29, 2017 - 03:00   ET


[03:00:00] ROSEMARY CHURCH, CNN ANCHOR: Hello and welcome back to our viewers here in the United States and all around the world. I'm Rosemary Church.

U.S. President Donald Trump is facing two big issues at the moment, and he's found a way to weave them both together.

North Korea celebrated the test launch of a new long-range missile on Tuesday. The regime claims it could now hit anywhere on the United States mainland.

And on Capitol Hill, political fights abound. Mr. Trump got his tax bill pass the budget committee ahead of a full Senate vote, but he also has a spending bill to pass, and he's pressuring democrats to fall into line.

He tweeted this. "After North Korea missile launch, it's more important than ever to fund our government and military. Democrats shouldn't hold troop funding hostage for amnesty and illegal immigration."

Well, North Korea's latest missile appears to be its most advanced yet, and they proudly declared just that on state media. The U.S. defense secretary voiced his concerns with their step forward.


JAMES MATTIS, UNITED STATES SECRETARY OF DEFENSE: It went higher, frankly, than any previous shot they've taken. It's a research and development effort on their part to continue building ballistic missiles that can threaten everywhere in the world basically.

But the bottom line is it's a continued effort to build a threat, a ballistic missile threat that endangers world peace, regional peace, and certainly United States.


CHURCH: And to be more specific on the height, the missile went through multiple layers of the earth's atmosphere, soaring well beyond the common line, which is generally considered the start of outer space. South Korea launched a precision missile strike drill in response just

minutes afterwards, and the U.N. Security Council is set to hold an emergency meeting on Wednesday.

Well, our Paula Newton joins us live now from Seoul, South Korea, with more on this. Paula, the international community is on edge understandably. What more do we know about Pyongyang's latest intercontinental ballistic missile; and what more are you learning about its capabilities?

PAULA NEWTON, CNN CORRESPONDENT: Well, its capability is quite menacing. I mean, what's key here is that it has in a very short span of time basically improved on its last ICBM test. And as you just noted, I mean, look, this thing was in the air longer than the last one.

And as you pointed out, it went for a great distance. What does this mean? It means that even the United States agrees it can hit almost anywhere in the world now.

What is interesting, though, is that North Korea chose to underscore the fact that it was a heavy payload on it, that this would mean that they feel as if they would now be capable of putting a nuclear-tipped missile into the air.

Now, they are not there yet although South Korean officials here have been intimating for a few days now that they believe that North Korea gets ever closer to, in its words, completing its nuclear phase, and that would really be a game-changer, Rosemary. It would mean that North Korea would come to the table in any negotiation as a nuclear state.

CHURCH: Yes, and I wanted to talk to you about that because North Korean officials have told CNN that they're not interested in diplomacy with the United States. Is that just bluster, or is there still that possibility that once Pyongyang does reach its nuclear capability, then it may very well come to the table and talk diplomacy?

NEWTON: We should absolutely take them at their word in terms of what they feel that they are able to do in the next few months when it comes to those nuclear tests. And you know that our Will Ripley has been there several times now continues to talk to officials in that government.

He believes that that is the end goal and that they are capable of it now. In fact, it may just be a matter of timing in terms of when they feel it will give them the most political leverage.

I think what's key here though, is that for one of the first times, the roadmap for North Korea seems quite clear. What does not seem so clear is what the United States and its allies in the region are going to do now.

We, of course had that muted response, as you say, from Donald Trump. And yet, South Korea certainly is feeling uneasy and feels as if the international community should be moving towards some kind of dialogue with North Korea at the very least.

CHURCH: And, Paula, apparently North Korea is talking about its next test. What are you learning about that?

NEWTON: Well, they're saying that they will do what they have done before, which is, have a nuclear test, and that would be quite a provocation.

[03:05:03] Again, the point is here to not only will the missile be able to reach parts of the of the U.S. mainland and beyond, but to have it nuclear-tipped. Now they haven't mastered what they call the re-entry phase to make sure that once the missile is in the air that it can again calm down -- come down.

I mean, what we're discussing here is plainly apocalyptic, Rosemary. We have to make that clear. And obviously, an absolutely worst case scenario.

But the point is they want to prove that they have that technology, that they can successfully test that technology because they believe that will put them in a sure footing when it comes to negotiating with the United States and other countries in Asia.

Again, to be clear, the Kim regime has its survival at its very heart and they believe that if they are not nuclear armed, that the regime will fall.

CHURCH: Yes, it has those in South Korea uneasy. It has the rest of the world incredibly uneasy. Just after 5 o'clock there in Seoul. Many thanks to our Paula Newton for that live report.

Let's bring in Daniel Pinkston, he is an international relations scholar at Troy University and has extensively studied North Korea and its missile program.

The South Koreans identified this latest missile as the Hwasong-14, but the North Koreans came out and said it was the Hwasong-15, a missile we've never heard of before. Is their program advancing at a faster pace than anticipated, and what could this mean going forward, do you think?

DANIEL PINKSTON, PROFESSOR OF INTERNATIONAL RELATIONS, TROY UNIVERSITY: Well, they have been making rapid progress over the past couple of years. North Korea state television came out today and announced that this was a Hwasong-15. It's probably a modified Hwasong-14.

Some of the missile engineers are speculating that it's a modified second-stage, which gives it extended range. It's a mobile missile, and according to the North Korean claims, it could strike anywhere in the United States, including the continental U.S.

CHURCH: Now, this launch happened at an unusual time, in the middle of the night local time. What does that signal to you?

PINKSTON: Well, it's North Korea's attempt to show that it can operate these missiles at nighttime and to operate and conduct these operations in the dark, and that gives them the possible opportunity to exploit the element of surprise.

So, if they can launch from anywhere, any place during the night, it makes it more difficult to see or find the missiles during military conflict, and it gives them greater survivability of course.

CHURCH: And you mention what you consider to be rapid progress on the part of North Korea. And of course this latest intercontinental ballistic missile, there's the possibility it could reach as far as Washington, D.C. Where are we with this? What do you think North Korea is planning here?

PINKSTON: Well, I think sometimes we need to step back and look at the whole spectrum of asymmetric capabilities that North Korea has. We have to remember that any type of military capability is connected to political objectives.

So, North Korea, once they acquire these capabilities, they have to develop a doctrine and a posture. So they have to think about under what conditions they would use these capabilities and against whom and to achieve what.

So, North Korea is a dissatisfied state. They have a number of political goals they would like to achieve. So under certain conditions, they can reach for cyber warfare, electronic warfare, artillery, special operations forces, chemical weapons, nuclear weapons, and so forth.

So we have to think of how these capabilities fit into that mix of this broad spectrum of capabilities and what they might use it for. So I think that the North Koreans are using this -- or would use it for a deterrent.

They would likely reach for their nuclear arsenal early in a conventional conflict once they began to suffer unacceptable losses and it looks like the regime is going to go down in a conventional war, then I think they might reach for their nuclear weapons.

CHURCH: Sobering outlook there. Daniel Pinkston, thank you so much for your analysis on this. We do appreciate it.

PINKSTON: My pleasure.

CHURCH: Senate republicans are hoping to deliver Donald Trump his first major legislative victory of his presidency in the form of a tax reform plan.

The budget committee approved the measure Tuesday after the president visited Capitol Hill for a little negotiating. The bill now heads to the full senate.

Meanwhile, talks to avert a government shutdown next week didn't go as planned at the White House. Democratic leaders Chuck Schumer and Nancy Pelosi skipped a meeting with Mr. Trump after he tweeted earlier Tuesday he did not see them reaching any deal. [03:10:10] Michael Genovese is a political analyst and joins me now

from Los Angeles. Good to have you with us.


CHURCH: So republicans pushing for the tax reform bill are celebrating that the legislation got through committee. But of course the big test will be on the Senate floor when they do the full vote. Here's how the senate majority leader described the next steps. Let's listen.


MITCH MCCONNELL, (D) UNITED STATES SENATOR: It's a challenging exercise. Think of sitting there with a Rubik's cube, trying to get to 50. We do have a few members who have concerns and we're trying to address them. We know we will not be able to go forward until we get 50 people satisfied, and that's what we're working on.


CHURCH: A challenging exercise. There are, of course, still a number of them sitting on the fence. What does Mitch McConnell need to do to get this bill passed?

GENOVESE: Well, it was a victory, a small one because it's simply another step in the process. But Senators Johnson and Corker, who are opposed in varying degrees to this bill, let it out of committee. That means it's going to go to the full senate, and that's where Mitch McConnell takes over.

He has very little wiggle room, very little room to maneuver. But the president is desperate to get something, anything passed because he has no legislative victories. He's got to have one before the end of the year.

And so members of the Senate are beginning to roll him. They're beginning to demand that some of their pet projects be included or other things taken out. So the president is in a vulnerable position. Mitch McConnell is in a tough position. They have to come up with something. But even when they come up with is going to be part of the process, an ongoing process. The House and the Senate would then have to reconcile those bills if the Senate passes.

CHURCH: And of course republicans have done most of their work and lobbying on this bill along partisan lines, which puts them at a disadvantage now because a number of republican senators still are not sold on this bill as we mentioned. Why are we seeing so much partisanship on the Hill right now, do you think?

GENOVESE: Well, this morning the president tweeted a very derogatory slap at both Senator Schumer and Representative Pelosi, who were supposed to be at the meeting today. They were no-shows and the president had two empty chairs.

Why is it partisan today? We've been highly partisan and dysfunctionally partisan for almost two decades now, and our tribal loyalties take precedence over good policy.

And so, you know, when President Obama was in office, the republicans were almost unanimous in opposing him. The democrats are returning the favor to the republicans now that Trump's in office. Those meager efforts to be bipartisan were meager, and it failed.

CHURCH: Yes, and of course the other big agenda for lawmakers is reaching a deal to avoid a government shutdown. You mentioned this. The president was supposed to hold talks with democratic leaders Chuck Schumer and Nancy Pelosi Tuesday. They backed out of the meeting after Mr. Trump tweeted he doesn't foresee a deal with them.


DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Chuck Schumer and Nancy Pelosi did not show up for our meeting today. I'm not really that surprised. We have a lot of differences. They're weak on crime. They're weak on illegal immigration.

They want the illegal folks to come pouring into our border, and a lot of problems are being caused although we've stopped it to a large extent, as much as you can without the wall, which we're going to get.


CHURCH: And Nancy Pelosi tweeted this shortly after, saying in part, "His empty chair photo showed he's more interested in stunts than in addressing the needs of the American people. Ryan, Paul Ryan, she said, and McConnell relegated to props. Sad." So how does any of this back-and-forth help get any deal done?

GENOVESE: Well, it helps Donald Trump with his base, but that's a very narrow assistance. What he really needs is not necessarily democrats but to get the republicans onboard. And you've got the republicans who are in the tea party, Trump coalition, who really want a more draconian bill.

Then you've got a lot of moderate republicans, establishment republicans who want a less onerous bill and so you're going to see them battling it out. But when you start the day as Trump did insulting your rival party, you can't expect them to come to the table and break bread.

CHURCH: Is it possible, though, that the decision by Schumer and Pelosi to back out of their meeting with the president Tuesday will possibly help unite republicans to help get this bill passed?

GENOVESE: I don't think it's going to have much of an impact at all. I think they're expecting Schumer and Pelosi to, if they showed up, not to be very relevant. And so, I think that's kind of in the background.

[03:14:55] The real battle is in the caucus of the Republican Party. It's going to be within the Senate squeezing so that they don't lose Johnson, they don't lose Corker; they don't lose one other vote. They're on a very, very thin margin. And so, you know, the battle is in the Republican Party, not in the Democratic Party and not even with the democrats.

CHURCH: Michael Genovese, many thanks for coming on the show. We appreciate it.

GENOVESE: Thank you.

CHURCH: And Senate republicans say they expect to vote on their tax cut bill this week, but some still have concerns about the impact on the federal deficit.

The non-partisan Congressional Budget Office projects the plan will add $1.4 trillion to the deficit over the next 10 years.

CNN's Tom Foreman has more on that.

TOM FOREMAN, CNN CORRESPONDENT: Six hundred sixty-six billion dollars this year after all is said and done, that's what the Congressional Budget Office says the deficit will work out to. The difference between how much money the government takes in, and how much it is going to spend.

And if the republican plan goes through, the CBO says it's going to jump substantially. If you average it over the next 10 years to about $807 billion per year, for budget hawks, that is a big, scary number.

And considering that republicans have always considered themselves hawkish on spending, why would they risk something like this knowing that their base could punish them badly if it doesn't go well?

Just look at the history of the deficit and public reactions to it, and you can see why. Back around 2000, the deficit was relatively low, $300 to $400 billion per year. And public concern about it, down about half 50, 52 percent of the people saying it's a very serious matter.

You move forward, though, you move into the recession in 2008, and suddenly as President Obama tries to wrestle with it, the deficit jumps much, much higher, and concern does too. Seventy five percent of people then saying big issue here.

But then the economy starts improving under President Obama. It continues doing so under President Trump. The deficit drops back down, and once again the level of concern is down to around the halfway point.

Are people still concerned about the deficit? Sure, they are. But a recent survey by Pew found that more than half the people don't believe there will be progress reducing the deficit in the next five years anyway.

So it's like a family using a credit card saying, we should not be using this so much, but we're not sure how to do that, so we're just getting used to the idea of spending this way. And this is what the republicans are betting on.

They're betting that as many people out there would like to keep the deficit low, as much as they would like that, many more will like the idea of the promise of lower taxes, and that's what the republicans think will be the winning play here.

CHURCH: Tom Foreman with that report.

We'll take a short break here. Still to come, another woman comes forward, and the pressure builds on a U.S. congressman to resign. The details on the latest accusations against John Conyers.

Plus, President Trump's former chief strategist will hit the campaign trail in Alabama's controversial Senate race. We will look at Steve Bannon's next move. We'll have that in just a moment.


CHURCH: There is growing pressure on U.S. Representative John Conyers to resign his seat after several women accused him of sexual harassment. The chairman of the Congressional Black Caucus says he had a candid conversation with the democratic congressman but said any decision to resign from office is Conyers' to make.

Conyers has admitted reaching a financial settlement with one accuser but denies the harassment allegations.

A new accusation surfaced Tuesday from a former staffer in Conyers' Detroit office. The woman worked in the district office from 1997 until 2005. She said the office had a sexually suggestive culture, and she made reports to a House committee on official conduct. She described one incident where she was told to drive Conyers to the airport.


DEANNA MAHER, JOHN CONYERS ACCUSER: He was driving erratically. He was a terrible driver, erratically. Thank God he was erratic, OK, because his hand was feeling me all over my -- what do you call it? My abdomen, OK? That area while he was driving. And I thought, my God, what am I going to do?


CHURCH: Well, meanwhile, Alabama Senate candidate Roy Moore will get some help on the campaign trail from former White House strategist Steve Bannon. Several women have accused Moore of pursuing them when they were teenagers and he was in his 30s. One accuses him of sexual abuse when she was 14. Moore denies all the allegations.

Alex Marquardt reports on the heated race between Moore and his democratic challenger.

ALEXANDER MARQUARDT, CNN SENIOR NATIONAL CORRESPONDENT: In what has turned into a grueling high-stakes race, the president has made clear he prefers the prospect of an accused child abuser in the Senate than a democrat like Doug Jones.


TRUMP: I can tell you one thing for sure. We don't need a liberal person in there, a democrat, Jones. I've looked at his record. It's terrible on crime. It's terrible on the border. It's terrible in the military.


MARQUARDT: Trump has emphasized that Moore has denied all of the accusations, but those views are repeated by supporters of Roy Moore like conservative activist Ann Eubank.


ANN EUBANK, CONSERVATIVE ACTIVIST: Conservatives do not believe in open borders and conservatives believe that a child's life is more important than a woman's choice.


MARQUARDT: Today Jones defended those accusations.


MARQUARDT: How do you respond to the president and to Roy Moore and his supporters who say that you are terrible on crime, terrible on immigration?

DOUG JONES, (D) SENATE CANDIDATE: Well, I tell people to look at my record and see what I've done, you know, as a former assistant U.S. attorney, a former U.S. attorney, we prosecuted tons of people. Look at my record. Don't just listen to a tweet. Don't listen to somebody make a statement.


MARQUARDT: When it comes to crime, Jones made his name as a U.S. attorney, prosecuting one of the most tragic attacks in Alabama history, the bombing of the 16th Street Baptist Church in 1963 that left four young girls dead, two members of the Ku Klux Klan were convicted.

[03:25:08] Jones is more conservative than many democrats in Washington, but for Alabama, he's about as left as they come. Under fire from many Alabamians for his views on abortion.


JONES: I am a firm believer that a woman should have the freedom to choose what happens to her own body, and I'm going to stand up for that.


MARQUARDT: Moore supporters jumped on Jones for saying he wouldn't back legislation banning abortions after 20 weeks. Later walking it back, saying late-term abortions should only be for medical emergencies. On immigration, he has criticizes the president's plan for a wall on

the Mexican border and has supported the so-called DACA program for the children of undocumented immigrants. He calls himself a Second Amendment guy, but has called for more stringent background checks for gun buyers, all positions that Trump and Moore have seized on and which columnist John Archibald says, Jones hasn't done well in communicating to potential voters.


JOHN ARCHIBALD, COLUMNIST, ALABAMA MEDIA GROUP: I don't think he's done a good job of coming out and saying this is what I stand for in a way that people of Alabama as the majority can understand.

But clearly I think what he believes and his campaign believes he needs to do is sit back and hope that Roy Moore implodes. I think as we get closer to Election Day, that's probably not going to be enough.


MARQUARDT: Alex Marquardt, CNN, Birmingham, Alabama.

CHURCH: New developments in the investigation into a string of killings in Florida. Four people in Tampa were shot to death separately in the past month and a half. The shootings all happened less than a mile from each other.

Police now plan to charge a suspect. They arrested a 24-year-old man after he brought a gun to a McDonald's fast food restaurant. The four victims were killed but not robbed while waiting at a bus stop or just walking alone at night. At this point, the motive is not clear.

Well, more ahead on North Korea's most alarming missile launch yet. Why U.S. leaders say it puts the two countries on a collision course.

Donald Trump is a little closer to something he really wants, a bill he can sign into law. How his tax cut plan made its way to the senate floor. We'll have that and more when we return. Stay with us.


[23:30:44] CHURCH: Welcome back to CNN newsroom. North Korea is loudly proclaiming to the world its nuclear ambition have not changed.

They're clearly making progress toward what they call their ultimate goal, a fully capable nuclear deterrent. Pyongyang launched an intercontinental ballistic missile Wednesday that soared higher than any previous test. The regime's announcement was triumphant. State media broadcast this photo of leader Kim Jong-un signing the launch order. Our Brian Todd has more now on Pyongyang's latest test and what it means.


BRIAN TODD, CNN CORRESPONDENT: North Korea's provocative test, the first of its kind since September, shows Kim Jong-un has reignited his ambitious weapons program. U.S., South Korean, and Japanese military officials say this launch was of an intercontinental ballistic missile, the most powerful rocket the rogue nation has, one capable of entering space and striking its enemies from thousands of miles away. Sources say it flew east off the North Korean coast and was in the air for about 50 minutes. It traveled about 620 miles, reaching a higher altitude than Kim Jong-un's major ICBM test in July and splashed down inside Japan's exclusive economic zone. The waters off Japan's coasts where it has the right to fish and explore.


THOMAS KARAKO, CENTER FOR STRATEGIC AND INTERNATIONAL STUDIES: They're reminding the United States, they're reminding Japan that she have been quite earnest in increasing the range and the capabilities of characteristics of their missile force.


TODD: Kim's regime has tested missiles this year at a furious pace. This makes 23 missiles launched in 16 tests since February. But the North Koreans had been fairly quiet recently, not testing a missile in more than two months. So why now?


UNIDENTIFIED MALE: This could be a reaction to political events like being put on the U.S. list of terror sponsors or other recent condemnations of North Korea. It could be shaping ahead of the winter Olympics in South Korea this winter. Probably more likely, it's just part of North Korea's ongoing missile program and their development of missiles that ultimately will be able to strike North America.


TODD: Despite repeated pressure from the President and a recent diplomatic mission by China, Kim Jong-un has made it clear he is not backing down. Instead, the North Koreans have been accelerating every aspect of their weapons programs, testing a massive hydrogen bomb in September, fine-tuning their rocket fuels and engines, and honing their targeting and guidance systems. The U.S. believes Kim and his generals could be able to place a miniaturized warhead on top of a missile sometime next year. Experts say they're just a couple of steps away from demonstrating a full-fledged capability to hit the continental U.S. with a nuclear-tipped missile.


KARAKO: The one thing they could do to demonstrate an end to end nuclear capability is to put an actual nuclear weapon on the top of a missile and fire it off into the pacific and actually detonate it out there somewhere. To get there, we think there might be a couple things to work out such as miniaturization and re-entry so that it actually gets through the atmosphere without burning up.

(END VIDEO CLIP) Bro Analysts say North Korea's next major provocation may in fact be

placing a nuclear warhead on top of a missile and detonating it somewhere over the Pacific Ocean in an above-ground test. They say if that happens, that is a game-changer which may force the U.S., South Korea, and Japan to consider a military response. Brian Todd, CNN, Washington.


CHURCH: And while the U.S. is rightly concerned, so too are North Korea's regional neighbors including Japan. A journalist Kaori Enjoji joins us from Tokyo with more on this. Good to see you, so of course North Korea's latest Intercontinental Ballistic Missile flew higher and father than any earlier test and landed near Japan. What was the reaction in that country to another missile landing so close?

KAORI ENJOJI, JOURNALIST: Well, Rosemary, Japan woke up to this news this morning. It was very unusual for North Korea to launch a missile in the middle of the night. Local time, just after 3:00 a.m. So many citizens woke up to yet another missile launch in Japan after repeated similar moves throughout the year. For the last few weeks, Japanese citizens in particular and the government have been very concerned about the silence from North Korea since the middle of September. And this week in particular, officials have sounded increasingly cautious about the possibility of fresh provocations from North Korea.

[03:35:15] But as you pointed out and as analysts have been pointing out, this is a new type of missile supposedly from North Korea, an intercontinental ballistic missile that flew very high, at a very steep trajectory, reaching as high as 4,000 kilometers, plus according to many officials around the world, and flying longer than previous launches, just over 50 minutes. It splashed down into Japan's waters. These are exclusive economic zones off the northwestern shore of Japan. This time about 200 kilometers off Atika prefecture which is the northwestern part of Japan. The Japanese government was very quick to condemn the move. The Prime Minister, Shinzo Abe, having a telephone conversation about a few hours after this launch with the U.S. President, Donald Trump, reaffirming their commitment and to try and rein in on North Korea.

But at the same time, echoing the language that the two leaders had during their discussions when Donald Trump was here in Japan earlier this month, saying it was very crucial to involve China in these negotiations. The people on the street here in Japan, they are concerned, and they woke up to this news today. But I have to tell you that they are concerned, but it's not dominating everyday conversation today like it has in the past. Perhaps it's because there have been 15 tests all together this year alone. This is the fifth time that a missile has fallen into Japanese waters this year alone. So perhaps in some way, they're getting used to the idea. But I also think this time's a little bit different, because the Japanese government did not alert citizens through a security alert system as they have in the past, what's known as a j-alert system where they have mobile phones ringing in areas that they feel might be vulnerable or loudspeakers in public places announcing an imminent threat. That didn't happen this time as it has in the past. Perhaps that is part of the reason people feel a little bit more -- a

little bit less cautious as they have in the pass. Sure, they are concerned. But I think after these repeated attempts by North Korea, people are starting to get used to the idea that possibly this threat is going to be around for some time to come. I think all eyes will be on the U.N. Security council meeting scheduled for later today and the possibility that the Japanese government may announce yet another new round of sanctions against North Korea. Rosemary?

CHURCH: Many thanks to you Kaori Enjoji, joining us there from Tokyo.

A jury in the U.S. has convicted a suspect in the attacks on a U.S. Diplomatic compound in Libya five years ago. Prosecutors say Ahmed Abu (inaudible) helped orchestrate the attacks which killed four U.S. citizens, including the U.S. Ambassador to Libya. The former militia leader was found guilty of terrorism-related charges, but was found not guilty of murder charges. He displayed no emotion while the verdict was read out, and he now faces life in prison.

Just this quick programming note for our international viewers, CNN's exclusive reporting on the slave auctions in Libya is getting attention all around the world with protests in New York, London, and Paris. Be sure to catch our CNN talk special presentation featuring our reporters who broke that story, and that is coming up at noon in London, 4:00 p.m. in Abu Dhabi.

Well, President Trump's tax cut plan clears a major hurdle. Still to come, why it could still be in danger as it moves to the senate floor. We're back with that in just a moment.


[03:42:00] CHURCH: U.S. President Donald Trump is trying to end the year with a big legislative win. He was on Capitol Hill Tuesday urging Republican Senators to support his plan to over all the U.S. Tax code. Apparently it worked. The senate budget committee voted along Party lines to pass it.


DONALD TRUMP, PRESIDENT OF THE UNITED STATES: We had a good day today. We had a phenomenal meeting with the Republican Senators. We had -- it was very special, that meeting. In many respects, I wish you could have been inside that room. It was very, very special. The camaraderie. It was somewhat of a love fest.


CHURCH: The bill is moving full steam to the senate floor, and that is left some Democrats fuming, saying it's being railroaded through. Lawmakers debated the tax plan on CNN.


UNIDENTIFIED MALE: You want to raise taxes. We want to cut taxes. There's not a compromise --. UNIDENTIFIED MALE: You basically, you have just told people, we're

not going to work with you, because we think you will do this and such. That is not the way politicians is supposed to work.

UNIDENTIFIED MALE: Not one Democrat would work with us.

UNIDENTIFIED MALE: Open the damn door and --

UNIDENTIFIED MALE: The door is open.


UNIDENTIFIED MALE: The door is open.

UNIDENTIFIED MALE: We don't have a lock on the door. No locks.

UNIDENTIFIED MALE: If we can then postpone this vote, this week --

UNIDENTIFIED MALE: No, we're not going to delay. You've been obstructing for a year.

UNIDENTIFIED MALE: If Tim wants to talk about helping the middle class and working class in this country, let's do it.


CHURCH: CNN global economic analyst Rana Foroohar joins me now to break down this tax reform plan. Great to talk with you again.


CHURCH: So I do want to start by asking you who are the big winners under this tax reform bill?

FOROOHAR: Well, the biggest winner is corporate America. The action in this tax plan is really in corporate tax cuts. Not only are they huge, but they're permanent. So if you look at the way in which corporate tax cuts are going to be permanent versus the way in which individual tax cuts would phase out over time, there's a really divide there between the way companies are being treated and the way individual taxpayers are being treated, and that is very different than, say, the Reagan era, which, you know, the Trump administration likes to refer back a lot to and compare its own tax plan with what happened then.

CHURCH: So, I mean, when you look at middle America, when they're looking at this, they're thinking, well, I'm not going to get anything out of this. How likely is it that this tax reform bill will pass?

FOROOHAR: Well, it's really interesting. You know, theoretically, this should have been a walk in the park, right? I mean it's a majority Republican congress. The tax cuts are something Republicans, you know, won on. This is one of their big platform planks. But the fact that you have had, until the last day or so, eight Republican holdouts, saying we can't vote for this plan for a variety of reasons. One, some of them think it's going to put too much on the deficit. Two, some think it's not doing enough for small business. Three, some of them don't like the fact that the Republicans and the White House is trying to piggy back a repeal of Obamacare on the back of this tax plan.

[03:45:12] All of these things are in play. So you've still got as of today, although this could change, about six Republican holdouts. And as I say, you can only have two holdouts and actually pass this plan.

CHURCH: Now, you mentioned the deficit, let's look at the numbers. The non-partisan congressional budget office studied the senate Republican bill, and they say it would increase the federal budget deficit by $1.4 trillion over the next decade. The Republicans who support this bill dispute that, of course. What's your take on those numbers?

FOROOHAR: Well, you know, one of the tricky things is that Republicans, when they calculate how this plan is going to work, they use something called dynamic scoring, this idea that tax cuts themselves are going to somehow unleash animal spirits, bolster growth, make companies start investing. But if you look at the historical data, that is not really the case. You know, in the 1960s, we had a corporate tax rate that was about 50 percent. By 1988, it was 35 percent, around about what it is now. This disinvestment did not go up. In fact it started to go down by the late 1980s. So I just don't see the proof even recently in 2001, 2003, 2008 and 2009. You didn't see tax cuts really creating growth that would ultimately spur main street jobs. And I just don't see the evidence that is going to happen again.

CHURCH: And Republicans who are for this tax reform bill, they say it would encourage companies to bring their business back to the United States. Mr. Trump talked about that earlier Tuesday. Let's take a listen.


TRUMP: Money offshore that is stagnant, that companies, they're just not able to bring it back. So I think it's going to be a number over $4 trillion. Corporate will be able to compete now against the world.


CHURCH: So, Rana, is there evidence to support that theory? Do you see companies bringing jobs back if they get a break on taxes?

FOROOHAR: Well, bringing jobs back and bringing money back are two different things. So we actually have a little experiment in real life that we did. In 2004, we had a tax repatriation. The corporate tax rate was slashed so companies could bring back money from overseas. They did bring that money back, but most of it went into share buybacks. They simply use it to buy back their own stock which bolster corporate pay, they handed out dividends to wealthy investors. But that investment did not get translated into mainstream jobs. And you know, I would just note last week, Gary Cohen the president chief economic adviser was at a conference full of CEO's and the moderator asked, how many of you if there's a tax plan that gets through in the next three weeks are going to actually reinvest? And only about three hands went up. And Cohen looked rather surprised or maybe feigned surprise. But I am not convinced, based on history and based on what I'm hearing from global multi-national CEO's that there's going to be a huge surge in investment on jobs.

CHURCH: History is generally a very good guide on matters like this. Rana Foroohar thank you so much. Always great to get your analysis. Appreciate it.

FOROOHAR: Thank you so much.

CHURCH: We'll take a short break here. Still to come, President Trump's attacks on Senator Elizabeth Warren's heritage now raising questions about what he said about his own family background. We're back with that in just a moment.


[03:52:28] CHURCH: Welcome back, everyone. Well, President Trump has come under fire for calling Senator Elizabeth Warren Pocahontas at an event honoring Native American war heroes. His son, Don Jr. is now fighting back at her in a tweet. He said this. Really interesting. Out of curiosity, what would you call pretending to be something you're not for financial gain? Other than fraud of course. Senator Warren has said she never used her heritage to advance her career, but it's possible the Trump family has embellished its own past for financial gain. That is according to multiple reports. Our Jason Carroll explains.



TRUMP: They call her Pocahontas.


JASON CARROLL, CNN NATIONAL CORRESPONDENT: Donald Trump's attacks on Senator Elizabeth Warren for claiming she is part Native American are raising some questions about what Trump has said about his own heritage. In the 1987 autobiography "The art of the deal" Trump claimed his grandfather was Swedish. He wrote, Fred Trump was born in New Jersey in 1903. His father, who came here from Sweden as a child, owned a moderately successful restaurant. Turns out his grandfather was not from Sweden, but Germany. In 1990, Trump was vague about the issue, telling "Vanity Fair," my father was not German. My father's parents were German, Swedish, and really sort of all over Europe.


UNIDENTIFIED MALE: When I met with him in 2015, we tried to unravel this.


CARROLL: Michael D'Antonio, author of the book, the truth about Trump, gave us a recording of his exchange with Trump about his heritage.


MICHAEL D'ANTONIO, CNN CONTRIBUTOR: There was a short period of time when your dad and then you talked about being Swedish instead of being German.

TRUMP: Well, there is some Swedish in there someplace.

D'ANTONIO: Do you think he was sensitive to --

TRUMP: It could have been. I never asked him that question. It could have been. But my father was German.


CARROLL: The family lore that Trump talks about is similar to Warren's own description of how she says she learned of her heritage.


ELIZABETH WARREN MASSACHUSETTS SENATOR: My brothers and I learned from our mother and our daddy and our grandparents who we are.


CARROLL: In 2016, one of Trump's cousins said the family hid its German heritage in part to make it easier to sell apartments to Jewish tenants. That cousin, John Walter, telling the Boston Globe, you don't sell apartments after the war if you're German. When reached by phone, a representative for Walter told CNN he would not discuss the family heritage.

[03:55:03] In 1999, Trump was grand marshal of the German American parade in New York City and in recent years as spoken openly about his German roots.


TRUMP: My grandfather, Frederick Trump, came to the United States in 1885. He joined the great gold rush and instead of gold, he decided to open up some hotels in Alaska. I'm a proud German American. Enjoy the parade.


CARROLL: D'Antonio says given Trump's own revised history.


D'ANTONIO: It's hypocritical for anyone whose own story about his background has been confused at best and manipulated at worst to criticize anyone else who may have been mistaken.


CARROLL: Jason Carroll, CNN, New York.


CHURCH: The Grammy nominations are in and this time around, it is hard to complain about a lack of diversity. Music's biggest night has been criticized in recent years for the dominance of white nominees. This year, veteran rapper Jay-z leads all artists with eight nominations including record, album, and song of the year. Kendrick Lamar has seven nods, and Bruno Mars has six. Bruno Mars is also nominated for record of the year for his hit "24 karat magic." others in that category include Red Burn, Despacito, and Daddy Yankee featuring Justin Bieber. The story of O.J. by Jay-z and Humble by Kendrick Lamar. The 60th Annual Grammy Awards will take place on January 28th. New York is hosting the show for the first time in 15 years.

And thanks so much for your company. I'm Rosemary Church. Remember, to connect with me anytime on twitter. "Early Start" is next for our viewers here in the United States. And for everyone else, stay tuned for "Destination Panama." Have a great day.