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New Report Shows Tax Plan Would Add $1 Trillion to Deficit; NYT: Trump Pressed Top Republicans to End Senate Russia Probe; Trump Criticizes Steinle Verdict as "Travesty of Justice". Aired 7-7:30a ET

Aired December 1, 2017 - 07:00   ET



SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: We've got to get there. It's just a matter of how we get there.

[07:00:22] UNIDENTIFIED FEMALE: The Senate Republican tax bill hitting a snag in the 11th hour. Bob Corker withholding his vote.

SARAH HUCKABEE SANDERS, WHITE HOUSE PRESS SECRETARY: Our focus as an administration has been to focus on middle-class tax cuts.

SEN. BEN CARDIN (D), MARYLAND: Middle-income families are going to get hurt.

CHRIS CUOMO, CNN ANCHOR: The president repeatedly urged several senior Senate Republicans to end the Russia investigation.

UNIDENTIFIED MALE: Secretary of State Rex Tillerson appears to be on his way out.

SANDERS: When the president loses confidence in someone, they will no longer serve in the capacity that they're in.

UNIDENTIFIED MALE: It was a verdict we were not hoping for.

UNIDENTIFIED MALE: The jury has acquitted Jose Ines Garcia Zarate of murder.

DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: Where was the sanctuary for Kate Steinle?

UNIDENTIFIED FEMALE: From day one, this case was used to catapult a presidency.


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

CUOMO: Welcome to our viewers in the United States and around the world. This is your NEW DAY. Alisyn is off. Erica Hill once again doing yeoman's work, this time on a Friday.

Great to have you, and I need you. There's a lot of news. The Senate Republicans' tax bill has hit a major snag, a $1 trillion snag. Republicans are now forced to make changes to their plan to win over deficit hawks who just can't accept adding that kind of number to the debt.

So what is clear to a number of Republicans now is that this plan is not going to pay for itself, and it's not going to reduce the deficit. These were those big promises from the Trump administration.

HILL: The president's frustration with senators may, of course, be about more than just about taxes. "The New York Times" reporting the president urged several Republican senators, including the head of the Senate Intelligence Committee to end the Russia investigation this summer.

And with all of this going on, the president this morning is tweeting about the acquittal of an undocumented immigrant who killed Kate Steinle.

We have all of this covered. Let's begin with CNN's Suzanne Malveaux, who's live now on Capitol Hill with our top story -- Suzanne.


Well, President Trump also tweeting about the tax battle. This really is a make-or-break moment for the president and his party, trying to desperately get a legislative win here. The problem is that the trillion dollars and a question of how to pay for all of this. Senate Republicans continue to jockey over what gets in, what's taken out and whether or not they can get the votes.


MCCONNELL: We're on the cusp of a great victory for the country.

MALVEAUX: The battle over the Senate Republican tax bill hitting a snag in the 11th hour. Retiring Senator Bob Corker withholding his vote Thursday after a new report by the Joint Committee on Taxation estimates the bill would increase the deficit by $1 trillion over 10 years and would not produce enough revenue to offset the cost of the plan.

Corker demanding a trigger to automatically raise taxes if the bill fails to generate as much economic growth as promised. But the Senate rule-keeper declaring such a proposal would not be allowed as written. A showdown unfolding on the Senate floor as a group of Republican senators huddled around holdouts Corker, Jeff Flake, and Ron Johnson.

KING: I submitted a very simple amendment that simply said send the bill back to the Finance Committee and have them report back with a deficit-neutral bill. A bill that doesn't blow a hole in the deficit. To call this a circus would be an insult to circuses.

MALVEAUX: Republicans now scrambling to appease deficit hawks. Senator Lindsey Graham acknowledging Corker's concerns are real but adding, "Failure is not an option." And Senate Majority Leader Mitch McConnell can only afford to lose two Republican votes. This as Senator Elizabeth Warren demanding to see the Treasury Department economic analysis after Steve Mnuchin promised the American people this.

STEVEN MNUCHIN, TREASURY SECRETARY: We think there will be $2 trillion of growth. So we think this tax plan will cut down the deficit by a trillion dollars. That's a large number.

MALVEAUX: The Treasury's inspector general launching a probe after receiving this letter from Warren, questioning whether Mnuchin misled the public or refuses to release the report because those analyses would contradict the treasury secretary's claims.

REP. NANCY PELOSI (D-CA), MINORITY LEADER: It's almost criminal. It's a lethal attack on the middle class.

MALVEAUX: Democrats continue to hammer the GOP tax plan, asserting the bill will hurt lower-income Americans while benefitting the wealthy. The Congressional Budget Office predicts those earning less than 30,000 will be worse off by 2019. And those making less than 75,000 worse off by 2027. Removing Obamacare's individual mandate would also result in 13 million fewer Americans having health coverage over the next decade.


MALVEAUX: Senate Majority Leader Mitch McConnell says that the voting process will continue at 11 a.m. this morning. Some of the changes that they are thinking about here for the bill, potentially reinstating the alternative minimum tax for wealthy individuals and corporations. Also raising the corporate rate, the corporate tax rate above 20 percent now for several years. Far from certain whether or not these type of measures will actually satisfy some of those lawmakers -- Chris.

CUOMO: And the parliamentarian, as you brought up. You know, this is a specific game they're playing right now on the reconciliation rules to keep a simple majority. They have to respect those rules.

Suzanne, thank you very much. Have a great weekend.

"The New York Times" reporting President Trump pressed top Senate Republicans to put a quick end to the Intelligence Committee's Russia investigation this summer. One Democratic senator calling the president's tactics in appropriate and a breach of separation of powers.

The White House insists the president has done nothing wrong. They used a very specific phrase to explain it. We're going to discuss that now with CNN political analyst Jonathan Martin, a.k.a. J. Mar, one of the co-authors of "The New York Times" report.

Good to have you, my brother. Thank you for being here.

The phrase that the White House uses is "undue influence," which makes every lawyer's eyebrow go up, because that's a term of art. It's a specific level of what would be seen as, you know, conduct of an executive. What does the reporting reveal about how forceful, to use Richard Burr's word, the president was on this issue?

JONATHAN MARTIN, "NEW YORK TIMES" REPORTER/CNN POLITICAL ANALYST: This comes during the summer. You have to look at the context of what was happening over the summer and why this president felt compelled to bring up the Russia investigation multiple times in conversations with senators of his own party.

He was furious that Jeff Sessions had recused himself from the Russia investigation. He was stewing over the fact that he has signed a major Russia sanctions bill at a time he didn't have any other accomplishments, had to come down hard on Moscow. And then the health care bill fails.

And all of this time, there are more and more stories leaking out every day about the Russia investigation, the Mueller probe, questions about Jared Kushner's involvement, Don Jr.'s involvement. So the president over the summer is really in a lather about these -- these issues and this -- the Russia cloud over his head.

And so what happens, Chris, is he will call senators -- and he works the phones quite a lot. He will call senators and start talking about a different topic. But invariably, our reporting turns up that, in the course of the conversations with lawmakers, he would soon drift towards the topic of Russia. And he would start venting about why his allies on Capitol Hill weren't doing more to protect him or, in some cases, why they wouldn't drop this thing.

And talking to the senators, you know, Senator Burr makes the point that it's not totally clear to this president how you act in office and how you approach the congressional branch of government. He doesn't understand, necessarily, that when you're the president and a different branch of government is investigating you, there are certain things that you do and don't do, because he is new to politics.

Now, Democrats will say, well, you can't keep using that excuse. I'm telling you if you talk to members of Congress on the Hill, that's what they'll tell you. He doesn't understand how the rules work.

CUOMO: Well, what would be the alternative for them, to tell you that they believe the president of the United States is trying to strongarm them into stopped a congressional election [SIC]? I mean, they have to give him some space on it.

But the net effect is what? What do you think it has meant to Republican senators who are investigating very these important questions?

MARTIN: Well, they know that eyes are on them. And the pair of eyes we're talking about are in the Oval Office. And that he follows -- he follows this probe very closely.

And he is -- he is hopeful, in fact, beyond hopeful. He is eager for this thing to come to an end with all due haste. And I think he would like for it to come to an end earlier this year. In fact, in reporting this story, I had one former White House aide

say that, at first the president did not mind the investigation, because he thought it would wrap up quickly and exonerate him entirely of any connections, any improper connections last year during the campaign with Moscow. That clearly, in hindsight, was fanciful thinking. Here we are the first of December. You've got multiple Hill investigations and the Mueller probe all still going on.

CUOMO: You know, we have been searching lately for a little bit of insight into what's driving the president's behavior, especially recently. And you have an interesting anecdote in the reporting about just how obsessive this need to explain to people where he is on the Russia investigation is. Tell us about it.

MARTIN: Yes. So my colleague Maggie Haberman...

CUOMO: We'll put up an excerpt from "The New York Times" so you can read. It's multimedia.

MARTIN: There you go.

CUOMO: "Mr. Trump often vented to his own aides and EVEN declared his innocence to virtual strangers he came across on his New Jersey golf course." What?

[07:10:04] MARTIN: Yes. So as you recall, Chris, for a good chunk of August the president was on holiday at his golf course in New Jersey. And, you know, as this president is wont to do at his various resorts, he is glad to come up and, you know, pat a back, shake a hand of visitors. He would show up at a wedding for a few pictures. He kind of enjoys that back and forth with people who are at his clubs.

And our reporting, thanks to Maggie Haberman, suggests that he would meet people on the golf course, in the clubhouse, that he, you know, was just meeting for the first time. They were at his club. And he would quickly launch into the fact that "The Russia investigation, you know, isn't on the level, and I'm going to be clear: there's nothing to this."

And people were sort of struck by the fact that he was having these kind of conversations, again, talking out of school about a very delicate matter in a way that you just don't expect for most presidents. Even most major American politicians. Forget the president.

CUOMO: Does it just stay in the world of style, or does it take us into the substance of what could be serious obstruction?

All right. Jonathan Martin, thank you very much.

MARTIN: My pleasure.

CUOMO: Let's now bring in CNN political analyst David Gregory; and chief legal analyst Jeffrey Toobin.

Let's start with the law here. Jeffrey Toobin, you have had some robust debate with one professor named Alan Dershowitz about whether or not the president is able to obstruct justice when it is in -- within his authority to start and stop investigations, to deal with the people who run them. This is -- these are his people at the tops of these agencies. And by extension, him calling up lawmakers and saying, "I don't like what you're doing. I think you should stop it" is well within not just his First Amendment right but his duty as a president.

JEFFREY TOOBIN, CNN CHIEF LEGAL ANALYST: Right. Well, let's just talk about the general issue of obstruction of justice, notwithstanding my beloved Professor Alan Dershowitz. You know, Richard Nixon was impeached by that -- or the House Judiciary Committee voted to impeach him, because he obstructed justice with the FBI, even though the FBI works for him.

Just because an agency works for you, you are not excused from obstruction of justice. In fact, you are more likely to obstruct justice, because you have the power to fire James Comey, which is -- which is, of course, what he did.

And one of the subjects of Mueller's investigation is whether the firing of Mueller was a legitimate exercise of his presidential power.

It's different with the House and Senate, because they are a different branch of government. He has less leverage over them. But he doesn't have no leverage over them. You know, there is a lot of interaction between the White House and the legislative branches.

So the fact that he is pressing these people to end their investigation is potentially evidence of obstruction of justice. It's not necessarily obstruction on itself, but as part of a full picture, it is certainly relevant to his intent.

HILL: And there's also the argument that we've heard and that you were just talking about with Jonathan of "Listen, this is a guy who is not a career politician." And this is what a lot of people wanted. He does things differently, even in terms of these interactions that he's having with different lawmakers.

The question there being -- and David, I'll throw this one to you -- is how long does that last? How long can this administration say, "You know what? We don't do things your way, because we're not cut from your cloth and that's why you wanted us."

DAVID GREGORY, CNN POLITICAL ANALYST: No, I think all of that is absurd. The president doesn't care.

By the way, there's a lot of grown-ups, at least some grown-ups who are around him who would tell him, "Mr. President, I know you're upset about this. Don't pick up the phone." He doesn't care. He's going to do what he wants.

He operates in a space where he says, "Look, wherever I am is where I want the storm to be, and I will be in the center of the storm. I have no shame. I don't care how bad, you know, the pushback is. I'm going to argue my case. I'm going to push around whoever I need to push around. I will fire the FBI director, because I don't like how he's doing the investigation."

And I will -- and so the consequence of that, he has brought so much of this on himself legally, in terms of the media scrutiny, in terms of congressional scrutiny. If not for his paranoia and obsession with this, there may not even be a special counsel.

So the reality is, this is not about political naivete. This is about a disregard for anyone else's opinion other than his about how he's going to move forward.

He has -- you know, his paranoia is about people thinking, "Oh, maybe I'm not legitimate if Russia tried to influence the election." No. They didn't influence the election. They didn't influence the outcome. But they tried to. They could ultimately have in fact, later on.

Congress has a responsibility to try to get to the bottom of that. The president doesn't care about that.

CUOMO: All right. So let's pivot to something that makes all of this go away. If he can achieve his legislative agenda, if he can deliver for the American people, whatever political marks are on him because of what happens with Russia, as long as there's no legal exposure, he'll probably wind up being fine. And it takes us to the tax bill.

David, where does it stand? The president came strong out of the box saying this is about the middle class, and this is about paying down the deficit with growth over time. Where do they stand on those promises?

GREGORY: Well, on the latter part, it's just speculation. And now you have Congress's own scorekeeper on this saying, "No, it's actually going to bust the budget and -- I mean, increase the deficit."

And you've got the dynamic of Republicans, including those who are not up for reelection, who are not going to be swayed by political pressure by Republican leadership or the White House saying, "No, that's not going to work for me."

So either they're going to have to dial back some of these tax cuts for corporations are maybe return the alternative minimum tax or they will have to find some other way to bring these, you know, these kind of deficit hawks on board. It's not clear to me what happens today. But I do believe from a White House point of view, from the Republican leadership point of view, they've got to get there. Failure is not an option here.

TOOBIN: But remember also, this bill, it's pretty unusual to have a tax cut bill that is unpopular with the public. I mean, this is a bill, that benefits go enormously to the more wealthy -- more wealthy people in this country. And it may lead to higher medical costs, cuts in other programs.

Yes, it is important politically, probably, for the Republicans to pass this bill. But, you know, be careful what you ask for. If middle-class people start to see their taxes go up as a result of this, that's not much of an accomplishment.

GREGORY: Right. But you get a benefit in the short-term. I would also argue that when we're in the middle of -- you wake up every day, what do you see? The stock market is going gang busters. And yes, you can make the argument, "Oh, you're going to make the corporations fatter, wealthier."

But there's a lot of people wo have their pensions, who have their retirement accounts in the stock market, as well, who are going to be happy to see those headlines every day. There's a lot of political return on that.

And then these middle-class cuts become increases farther down the road. And that is, as you say, I mean, that's the price that's going to have to be paid that could turn a lot of voters off.

CUOMO: Gentlemen, appreciate it. Have a good weekend.

President Trump is outraged and tweeting this morning after an undocumented immigrant is found not guilty in the 2015 shooting death of Kate Steinle. Trump slamming the verdict as a travesty of justice.

CNN's Dan Simon live at San Francisco's Pier 14 where Steinle was killed.

It is very difficult to separate the politics from the case itself. But this verdict should not be taken as a complete surprise.

DAN SIMON, CNN CORRESPONDENT: That's exactly right, Chris.

First of all, the president has already tweeted three times about the verdict. Twice just this morning. The first one using it as a justification to build the border wall. The second one, he is upset that the defendant's criminal past was not allowed to be brought up during the trial.

Meantime, we are on the edge of Pier 14. As you said, this is where Kate Steinle was gunned down. It led to some very fiery rhetoric, rhetoric that is only now going to escalate now that you have this acquittal.


TRUMP: My opponent wants sanctuary cities, but where was the sanctuary for Kate Steinle?

SIMON (voice-over): The case became a flash point during the presidential campaign and led to a heated national debate over sanctuary cities. At the center, Jose Ines Garcia Zarate, an undocumented immigrant deported five times to Mexico, seven felonies on his record.

But none of that would come into play inside the courtroom. The only question: was Kate Steinle the victim of an intentional shooting or was it an accident? The jury finding it was the latter, acquitting the 45-year-old of both murder and involuntary manslaughter. His public defender addressing the Steinle family.

MATT GONZALEZ, DEFENSE ATTORNEY: I hope that they do not interpret this verdict as diminishing in any way the awful tragedy that occurred and that their family has suffered.

SIMON: And he also addressed critics, including President Trump, who tweeted that it was a disgraceful verdict: "No wonder the people of our country are so angry with illegal immigration."

GONZALEZ: For those who might criticize this verdict, the attorney general of the United States, the president and vice president of the United States, let me just remind them that they are themselves under investigation by a special prosecutor in Washington, D.C. And they may themselves soon avail themselves of the presumption of innocence and beyond a reasonable doubt standard. And so I would ask them to reflect on that before they comment or disparage the result in this case.

[07:20:08] SIMON: July 1, 2015, Kate Steinle had been taking an evening stroll along San Francisco's Pier 14 with her father when the bullet seemingly came out of nowhere. The defendant ditched the gun and fled the scene.

But the case was not clear-cut. The bullet ricocheted before hitting Steinle, raising questions as to whether Garcia Zarate was ever intending to fire the gun. There was also no motive established. And Garcia Zarate had no history of violent convictions.

Kate Steinle's brother expressing his disappointment: "I'm not surprised," he said in a statement. "The system failed Kate from the start of this chain of events. Why would the verdict be any different? It is failure after failure."

The shooting happened three months after Garcia Zarate was freed by the sheriff's office, let go after prosecutors declined to press forward on a decades-old marijuana charge. But instead of handing him over for deportation, the San Francisco jail let him walk free, a recipe for a political storm.

Defense lawyers decrying the politics the verdict will bring.

FRANCISCO UGARTE, DEFENSE ATTORNEY: From day one, this case was used as a means to foment hate. It was used to catapult a presidency along that philosophy of hate of others. And I believe today is a vindication for the rights of immigrants.


SIMON: Well, Garcia Zarate could spend additional time in California prison for being convicted on a lesser charge, being a felon in possession of a firearm. But because of time already served, it's likely it will be just a few months. So ultimately, it will be back to Mexico for Garcia Zarate. Federal immigration authorities have already said they plan to deport him for a sixth time -- Erica.

HILL: Dan Simon live for us there. Thank you. Major corporations stand to get big tax cuts if the GOP tax plan

passes. So will average Americans see any of that cash come to them? We've been told it could happen. We're taking a closer look next.


[07:26:11] HILL: President Trump has repeatedly said slashing the corporate tax rate will create jobs and increase pay for the middle class. Major CEOs now admitting, though, that is not necessarily what they plan to do with the money they will save. CNN's Cristina Alesci here to explain.

OK, so what will they do?

CRISTINA ALESCI, CNN CORRESPONDENT: Well, it's interesting, Erica. The main premise here is corporate tax savings will flow down to the little guy. And that argument is an over-simplication. If you look at corporate taxes and corporate profits since 2012 when they hit a record high as a percentage of GDP of overall economy, those profits held steady. So that means companies have the money to hire and invest in research and plants and equipment, but they've chosen to do other things with it. Listen.


ALESCI (voice-over): Just in time for the holidays, Republicans seem poised to deliver a gift to U.S. businesses.

TRUMP: It reduces the corporate rate from 35 percent all the way down to 20 percent, and it provides a one-time low tax rate to return corporate money parked overseas. Trillions and trillions of dollars.

ALESCI: Republicans say that workers benefit when companies pay less tax. It will free up cash to hire employees and expand operations.

STEVE MNUCHIN, TREASURY SECRETARY: Those are jobs. That's money we want to bring back. We're going to create expensing that incentivize companies to spend capital here and create jobs.

ALESCI: But how much will the average American really benefit from corporate tax cuts? Will it really trickle down? Even executives aren't promising much. "The Wall Street Journal" asked a group of them if they'd pump more money into their businesses in front of Trump's very own economic adviser.

UNIDENTIFIED MALE: If the tax reform bill goes through, do you plan to increase your company's investment, capital investment? Just a show of hands, if the tax reform goes through. OK.

UNIDENTIFIED MALE: Why aren't the other hands up?

HILL: A tepid response, considering companies are also getting extra sweeteners, including a reduced rate on trillions parked overseas if they bring that money back home. But CEOs of major companies admit that workers won't necessarily see more jobs or higher wages, at least not right away.

UNIDENTIFIED FEMALE: What about jobs and wages? Does that argument work? Is that -- is that something -- an area you would focus on and invest in?

JAMES QUINCEY, CEO, COCA-COLA: I think pretty simply it's not a short-term change. It's not like there's a big box of money out there that suddenly comes back and gets reinvested by us in 2018.

ALESCI: In fact, studies show the last time there was a similar holiday on foreign profits in 2004, about 60 to 90 cents of every dollar went to stockholders, not investment. Bottom line: the tax break was not an effective way to grow the economy, according to the Congressional Research Service. And experts don't think it will be different this time around.

JENNIFER BLOUIN, ACCOUNTING PROFESSOR, UNIVERSITY OF PENNSYLVANIA: How much of that $3 trillion is likely to come back to be used to hire folks, invest in research and development, build new plant facilities and manufacturing? I would suspect it's fairly low.

ALESCI: But the fervor for big corporate tax cuts is helping fuel a so-called Santa Claus rally in the stock market, and you know that's making President Trump very happy.


ALESCI: Look, the major question here is do we really need corporate tax cuts right now? Third-quarter economic growth came in at about 3.3 percent. That's pretty good.

The argument against these corporate tax cuts is why don't we wait until we really need a boost to economic growth, hold it in our back pocket, and then cut corporate taxes when it's really needed, potentially in a down turn -- Chris.

CUOMO: Cristina Alesci, thank you very much. Joining us now, two CNN political commentators of top variety. Former Republican senator Rick Santorum and former Democratic congressman Steve Israel.

I saw a sour face come across your pretty visage, my friend.