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House, Senate Strike Deal on Tax Bill; McCain Hospitalized Over Cancer Treatment Side Effects. Aired 7-7:30a ET
Aired December 14, 2017 - 07:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
SEN. BERNIE SANDERS (I), VERMONT: What we need to do is pay attention to the middle-class and working families.
[07:00:05] UNIDENTIFIED MALE: Do the right thing, Roy. It's time that we heal.
ROY MOORE (R), LOST ALABAMA SENATE SPECIAL ELECTION: I believe the heart and soul of our country is at stake.
DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: As the leader of the party, I would have liked to have had the seat.
CHRIS CUOMO, CNN ANCHOR: Senator John McCain hospitalized due to side effects from his brain cancer treatment.
MEGHAN MCCAIN, DAUGHTER OF JOHN MCCAIN: Your son, Beau, had the same cancer that my father was diagnosed with. I was told -- sorry -- that this doesn't get easier.
JOE BIDEN, FORMER VICE PRESIDENT OF THE UNITED STATES: If anybody can make it, your dad. Her dad is one of my best friends.
ANNOUNCER: This is NEW DAY with Chris Cuomo and Alisyn Camerota.
CUOMO: That was some moment with John -- with Joe Biden and Meghan McCain. We'll show it to you more. It's going to hit you. Or it should.
Good morning and welcome to your NEW DAY. The first legislative victory of Donald Trump's presidency is within reach. House and Senate Republicans have woven together their two bills. They have common ground on a deal that they say overhauls the nation's tax laws. A vote on the GOP's land could happen next week.
Republicans are determined to fast-track this bill. They want to use a simple majority, but they are up against the public. The majority of people saying they don't support this tax cut.
ALISYN CAMEROTA, CNN ANCHOR: Meanwhile, the blame game is intensifying inside the White House after Roy Moore's defeat in the Alabama Senate race. Moore is still refusing to concede. So we will talk to a group of Trump voters again, as we so often do, to get their reaction to what happened in Alabama. So let's begin with CNN's Joe Johns. He is live at the White House
Good morning, Joe.
JOE JOHNS, CNN SENIOR WASHINGTON CORRESPONDENT: Good morning, Alisyn.
It is beginning to look like the president and congressional Republicans will be able to give the American public that Christmas gift they have promised in the form of tax cuts, regardless of whether polls show the taxpayers like it or not. And in the process, the Congress and the president will also be giving themselves something to crow about as we enter the race for control of Congress in the midterm year.
TRUMP: We're just days away, I hope. We want to give you, the American people, a giant tax cut for Christmas.
JOHNS (voice-over): President Trump touting a tentative deal on the Republican tax plan after party leaders announced they have reconciled the House and Senate bills, a major step forward.
UNIDENTIFIED MALE: This bill is a bold departure from the broken tax code America has today.
JOHNS: The key points of the compromise bill, as it now stands, reducing the top individual tax rate to 37 percent from 39.6 percent. And lowering the corporate tax rate from 35 percent to 21 percent, a slight uptick from the 20 percent rate originally proposed that was favored by President Trump.
TRUMP: Twenty is my number. So I'm not negotiating that number.
JOHNS: The deal fully repeals the corporate alternative minimum tax but keeps the individual AMT for people making over $500,000 a year and families making at least one million.
President Trump stands to benefit from this change to the AMT to the tune of tens of millions of dollars, according to his only tax return that's public, from 2005.
The tax plan would also now allow individuals to write off up to $10,000 in state and income property taxes or sales taxes or a combination of them, appeasing lawmakers in high-tax states.
Senate negotiators also preserved a number of popular deductions, including the student loan interest deduction, the medical expense deduction, and tax-free graduate-school tuition waivers. The compromise bill would eliminate Obamacare's individual mandate, which requires most people to pay a tax if they do not buy health insurance. The key question: how the resulting revenue shortfall will be paid for.
JANET YELLEN, FEDERAL RESERVE CHAIR: I am personally concerned about the U.S. debt situation. Taking what is already a significant problem and making it worse, is -- it is of concern to me.
JOHNS: Do all of these changes deliver on President Trump's promise to help the middle class? A new Quinnipiac poll shows that only 26 percent of Americans approve of the Republican tax plan. Despite this, the GOP is flatly rejecting a call from Democrats to delay a vote until newly-elected Alabama Senator Doug Jones is seated next month.
SCHUMER: It would be wrong for Senate Republicans to jam through this tax bill without giving the newly-elected senator from Alabama the opportunity to cast his vote.
JOHNS: The Senate minority leader citing what the president said in 2010 when a final vote on the Affordable Care Act was delayed until newly-elected Republican Senator Scott Brown could be seated.
BARACK OBAMA, FORMER PRESIDENT OF THE UNITED STATES: People in Massachusetts spoke. He's got to be part of that process.
JOHNS: In an interview with CNN, then-businessman Donald Trump praised President Obama for his role in that decision.
[07:05:05] TRUMP: He said now, you know, we have to give Massachusetts their vote, which was a very smart thing for him to say.
JOHNS: And one more note on the tax plan as it stands. If you're a homeowner and you're wondering what's going to happen to the revered and reviled mortgage interest deduction, as it stands right now, barring any last-minute changes, they plan to cap that at $750,000. We expect to see the president one time today at an event updating his efforts to deregulate the federal government.
Chris and Alisyn, back to you.
CAMEROTA: OK, Joe, thank you very much for all of that background.
Joining us to discuss it are CNN political analysts John Avlon and David Gregory. David, I'll start with you.
Just give us some context here. How unusual is it for any party to be this gung-ho about a bill that has this low public opinion ratings? I mean, let's just look at the latest polls. So there's something like -- only 26 percent of Americans at the moment approve or support this Republican tax plan.
If you dive into it a little bit deeper, does it make you more likely or less likely to vote for a candidate who supports this? Forty-three percent less likely to vote for them. So why are Republicans so gung- ho?
DAVID GREGORY, CNN POLITICAL ANALYST: Look, I think this is a short- term gamble. This is very straight-ahead politics for Republicans, who are looking at this and saying, "We made a promise about tax reform. Here's one that we can actually deliver on. And we can try to sweeten the deal. If you know -- if we're giving a little bit less of a corporate break, we can do a little bit more on upper income individuals to make up for the hit that they might take in high resident, you know -- resident tax states. California, New York, New Jersey, et cetera."
And the gamble is that making good on that promise now is going to be better when you go to the voters, who have -- especially Republicans who have not seen the party make good on their -- on their promises. Even though it's riskier in the longer term. You're alienating perhaps a large part of the electorate. In an election year next year, and you face the prospect of adding to the deficit. It's almost like when I covered, you know, Bush during those years in their first tax cut. Vice President Cheney memorably said that deficits don't matter and that Reagan proved that. This seems to replay that thinking.
CUOMO: It's an interesting aspect to the Reagan tax cuts that people don't -- don't mention and they are banking on people not doing their homework. They had the biggest deficits after those tax cuts. He had to raise taxes 11 times to deal with that. So that's one thing.
Public sentiment about this is about spin. Is it not, John? The Democrats have been crushing this thing. It's not that people know the bill or understand--
CAMEROTA: How can they know it? They just cobbled this together last night.
AVLON: The details of the final bill just came out last night. So the polls don't reflect those details at all. It was a bad bill. It's less bad, frankly, for some folks who...
CUOMO: So let's put up the details. And let's put some meat on the bones here. That's why you watch this show, right? So they dropped the top individual rate a little bit more in their dealings. Why? Because this was seen as a gift to the rich people who pay a lot in state and local taxes in states like New York and in California. SALT, state and local taxes. They are going to be a little bit more generous. You're still going to take a hit. If you live in those states and pay state local taxes, you're not going to be able to deduct them the way you used to. But they made it a little bit easier.
CAMEROTA: Now they're capped at $10,000.
CUOMO: On the alternative minimum tax. They didn't give rid of it altogether, which would have been a huge gift to the rich people like Trump. But they changed it in a way that makes it better for those people. Same with the estate tax. They doubled the exemption amount. So again, they made it better for the rich people. You don't see the same kind of set-offs for the middle class. And that's going to be a big...
CAMEROTA: And they are repealing the individual mandate of Obamacare.
AVLON: That's right. Which is a huge deal. Because that's just another end run trying to destabilize Obamacare. But look, this was sold by then-president, I think, sincerely believed as he campaigned as a middle-class tax cut. That is not what is being presented right now. This is something designed to stimulate the economy, designed to give gifts to business in the hopes that they will hire more. Whether they actually will remains to be seen.
CUOMO: Would have Trump missed the layup on this one? Why didn't he say in his pitch yesterday, "I'm going to hire more people as a result of this?" You know, I know he's not running his businesses anymore. But all the hotels. Even he didn't say that he was going to hire more people.
AVLON: Yes. Fair point. And the other thing that's missing is generational responsibility. For all those deficit hawks like Paul Ryan who've always talked about the generational theft of deficits and debt. This blows a hole in that. You know, in a way that could be destabilizing down the road. It also runs the risk of exacerbating income inequality, which is a major destabilizing factor for the country, for our society that Trump campaigned against. Railing against that income inequality.
I don't think this is a play for the country at large. I don't. Politically, you know, when the Bush team, this last major tax cut, which was $1.3 trillion back in 2001, it was sold very simply as if you pay taxes, you get a tax cut. And that was a cut in marginal rates.
[07:10:09] This is more complicated. And they're dropping that high marginal rate, because a lot of wealthier Americans, not -- you don't have to be at the Trump level, are saying, "Wait a minute, I've got Republicans in charge. And I'm going to have to ultimately have a tax increase through this deal?"
GREGORY: That doesn't mean sense.
What is a selling point, people are looking at their stock portfolio, whether you're wealthy, or whether you have a pension plan, whether you're a teacher and, you know, you've got that investment plan as a retirement plan. You see the stock market go up. And a lot of that is those gains. What's baked in is the expectation of this kind of tax reform. I think Republicans are willing to go to the bank with that and say, "We've got to deliver on that." Because that's at least the kind of short-term return they're going to see from Republican rule.
CAMEROTA: And even this is connected to the Alabama Senate race because of the timing and whether or not it's the right thing to do to wait for Doug Jones to be seated since, you know, the voters have spoken. And that was the argument in 2010 with Obamacare whether to rush it through or whether to let newly-seated Republican senator from Massachusetts Scott Brown be seated because the voters had, you know, spoken.
And so at that time, Mitch McConnell argued that even Democrats were on board with waiting, taking a breath and waiting until Scott Brown was seated. Here was his argument in 2010.
(BEGIN VIDEO CLIP)
SEN. MITCH MCCONNELL (R-KY), MAJORITY LEADER: Senator Jim Webb of Virginia, he's made it clear he will not participate in any health care votes prior to Senator Brown being sworn in.
I think the majority has gotten the message. No more gamesmanship here. No more lack of transparency. Let's honor the wishes of the people of Massachusetts and move forward with policy -- with our policy debates.
(END VIDEO CLIP)
CAMEROTA: The ship ended on that day.
AVLON: Unicorns traipsed through the halls of Congress, and everyone lived happily ever after.
Yes, no, look, this is just another example of situational ethics, which is rampant in Washington. You're not going to hear Mitch McConnell say the wishes of the people of Alabama must be respected. Although you will hear the Democrats say it.
The difference is the president at the time, Barack Obama, saw the strategic benefit in taking the high road. He echoed that. You're not going to hear President Trump do that either.
CUOMO: The power of saying something with a straight face is not to be underestimated when it comes to politics.
CAMEROTA: It is hard to do.
CUOMO: Whether it's McConnell, or Sanders. Sometimes you'll see it -- in Sanders I'm talking about the press secretary. Not Bernie Sanders. He's never got a straight face. He's always angry. But you can get -- it can get you a long way in politics. It makes it look like you believe what's coming out of your face.
All right. Senator John McCain is back in the hospital. This is not good news. He's suffering from side effects related to his cancer treatment. And this is hard on his family. So many of you out there know the struggle that they're living through right now. His daughter Meghan is on "The View."
So Joe Biden was on, and he's talking about fighting cancer, and we all know what happened to his son, Beau. He lost him to this same type of aggressive disease.
So they had a moment together on the show that we're going to have to discuss. CNN's M.J. Lee is live in Washington with more -- M.J.
M.J. LEE, CNN NATIONAL POLITICS CORRESPONDENT: Well, Chris, at a moment when Republican lawmakers are scrambling to go get this tax reform bill across the finish line, they're really missing a big figure within its ranks. And of course, as you noted, this is a very, very difficult time for the McCain family, as well.
LEE (voice-over): Nearly five months after Senator John McCain was diagnosed with glioblastoma, an aggressive form of brain cancer, the effects of undergoing chemotherapy treatments, while also maintaining his job as a senior Republican senator from Arizona are beginning to take their toll on the 81-year-old war hero.
McCain's office has announced that the senator's being treated at Walter Reed Medical Center for what his office called normal side effects of his ongoing cancer therapy.
McCain has been getting around the Capitol in a wheelchair and wearing a walking boot while recovering from a slight tear in his Achilles tendon.
Less than two weeks after undergoing surgery to remove a tumor in July, McCain returned to the Senate floor, greeted by the deafening applause of his colleagues, before delivering a stinging critique of the Senate's fierce partisan divide.
SEN. JOHN MCCAIN (R), ARIZONA: Let's trust each other. Let's return to regular order. We've been spinning our wheels on too many important issues, because we keep trying to find a way to win without help from across the aisle.
LEE: Days later, McCain cast the deciding vote to defeat the GOP's health care bill. Soon after, McCain shared some intimate details about his cancer diagnosis on "60 Minutes."
UNIDENTIFIED FEMALE: What did they tell you about the prognosis?
J. MCCAIN: That it's very serious. That the prognosis is very, very serious. Some say 3 percent. Some say 14 percent. You know, it's a very poor prognosis. So I just said, I understand. Now we're going to do what we can, get the best doctors we can find, and do the best we can. And at the same time, celebrate with gratitude a life well- lived.
[07:15:17] UNIDENTIFIED FEMALE: Is he that tough?
CINDY MCCAIN, JOHN MCCAIN'S WIFE: Yes, he is tough. Yes.
LEE: Although the treatment process has been grueling, the McCain family has remained focused on their time together. The emotion was clear Wednesday in a moving exchange between McCain's daughter, Meghan, and former vice president Joe Biden on ABC's "The View."
Biden's son, Beau, died in 2015 after battling the same cancer as McCain. Meghan McCain tearfully sought Biden's advice.
BIDEN: One of the things that gave Beau courage, my word, was John. Your dad -- you may remember. You were a little kid. Your dad took care of my Beau. Your dad, when he was a mil aide, worked with me, became friends with Beau. And Beau talked about your dad's courage. Not about illness but about his courage.
And look, there's a lot of things happening. Any of you who have somebody who is diagnosed with glioblastoma, which is about as bad as it gets, there's breakthroughs that are occurring now. You've got to maintain hope. There's hope. Hope is -- you've got to have hope.
LEE: McCain's office saying yesterday that the senator is grateful to his doctors and the outpouring of support. But no word yet on when he will return to the Senate. His office only would say as soon as possible -- Chris and Alisyn.
CAMEROTA: Well, thank you, M.J. That was quite a moment. I watched it play out live. It was just riveting. You couldn't take your eyes off of it. Because Joe Biden, you know, he knows just the right note to strike. It was optimistic for her. It was poignant. It was funny at times. He has that human touch.
CUOMO: He does.
CAMEROTA: He's so great at those moments.
CUOMO: I don't think even Joe would agree that he always knows that he's getting the right note to hit. But he is always coming from his heart.
CAMEROTA: He can be somewhat gaffe-prone.
CUOMO: When my father passed away, he was on the phone with my brother. He was on the phone with me, my mother. And he left us messages that we'll never forget.
But there's something else you get to see there. I was lucky enough to grow up around. This is how they used to treat each other down there. They have disagreements. McCain and Biden are not political colleagues in any way when it comes to agreement. But there was a basic decency. Not just because a man is fighting with cancer. It was always there. It was about principle and politics but also decency. And that has been lost. John McCain is right about that.
CAMEROTA: And so there are questions about whether or not Joe Biden would ever jump in in 2020.
CUOMO: He says closing the door doesn't make any sense. "I closed the door. How does it help me to close the door"? But we'll see. He's going to have to decide, and pretty soon.
All right. Republican leaders say they have a deal on taxes. Will it be the huge Christmas gift to all of you that the president promised, or is it a gift to some of you that are also known as rich?
CAMEROTA: Plus, how are Donald Trump voters reacting to Roy Moore's defeat in Alabama? Three of these folks are from Alabama. We'll get their take, ahead.
[07:22:22] CUOMO: All right. A lot of you are asking questions about what this tax bill's going to mean. Got some good information coming up. The president says he wants to deliver you a giant tax cut for the middle class by Christmas as a big gift.
But who are the real winners going to be? Who's not going to win as much? Who might even lose if this tax overhaul passes? We have great guests to break it down for you. First we've got CNN economics analyst Steve Moore and Anthony Chan, managing director and chief economist for Chase.
Gentlemen, great to have you both. And there is an early gift for the people at home. Go to CNN.com. And the big brains have put together a calculator for you. So forget about the popularity poll of the tax bill. That's not going to matter to you when your paycheck comes.
Take a look at this software package we have on the website. You can put in some basic information about yourself and where you live and your filing status. And you'll see how, in its current reckoning, this bill will affect you. How cool is that? Go on and get the facts for yourself.
All right. Now let's argue policy. Steve Moore, let me contradict myself and say people don't like this tax bill. What are they getting wrong?
STEVE MOORE, CNN ECONOMICS ANALYST: Well, I think they're getting a couple of things wrong. I mean, No. 1, is that it's going to benefit the economy in a big, big way. And my goodness, you've seen what's happened with just the stock market in the last two or three months. I've never seen anything like it. I mean, obviously, investors, business love this plan. I think it's going to lead to a big expansion.
And ultimately, you know, when I got started two years ago with Donald Trump when we started talking about this, it was about how to make the economy more vibrant. We used to talk about, you know, how do we get out of the 2 percent growth rate under Obama up to 3, 4, even 5 percent. And we're already at three and a half. I think we're going to grow a lot faster.
So my only point is that what really matters to the American people -- remember, Bill Clinton said, it's the economy, stupid. If this bill works the way as I think it's going to, people are going to feel real good about their job prospects, the increase in their salaries.
And by the way, the middle class is going to -- I want to see that calculator. Because, you know, they made some changes in the bill just in the last couple of days that benefit the middle class substantially. For example, increasing the child credit that goes to every parent that has kids.
CUOMO: They also lowered the rate for the top tier. And they made some other adjustments to what you'll do with SALT and the AMT that will help the wealthy, as well.
MOORE: Everybody who pays taxes is going to benefit. No question about it.
CUOMO: Right, but it's about the leavening of it. It's about the ratios involved. So Anthony, let me get you in here. Let's start with Steve's first premise, which is that this tax bill is going to create tremendous economic growth, and that will be great for everyone. Do you see that as clearly?
[07:25:00] ANTHONY CHAN, MANAGING DIRECTOR, CHASE: Well, I don't disagree that it's going to help the economy. In fact, the Federal Reserve has estimated that it's going to boost economic growth by about 0.4 in 2018. They just revised up their numbers.
I have no doubt that it's going to raise business investment with all that incident expensing. But you've got to ask the question, why is it that 56 percent of the American people in the latest Gallup poll are against this?
And I'll tell you why they're against this. The Tax Policy Center says 62 percent of all the benefits from this tax cut will go to the top 20 percent.
The American people are also a little disappointed that one-third of the final cost of this tax package will be financed by just taking away health care benefits from 13 million Americans. When you see that, people get a little bit upset. These are things that certainly don't fly in the face. They also said one last point, for the fact that corporate tax cuts are permanent. But for individuals after 2026 they actually have to pay -- they go back to the old tax rates. And in fact, afterwards you're going to end up with almost 50 percent of Americans paying more taxes than they were paying before this tax cut.
So that's the reason why the American people are upset. But will it lead to more jobs? Will it lead to faster economic growth? Steven Moore is correct. Yes, it will. It's not going to lead to 6 percent growth or even 5 percent growth.
This tax package is about 0.5 percent of GDP. How do you take the fact that this year economic growth is going to be about 2.2 or 2.3 percent and then push it up to 5 percent with only a half a percent of stimulus? It's not possible.
MOORE: The economy is already growing at 3.5 percent. I mean, just look at the reserve numbers on the fourth quarter GDP. They're estimating about 3.5 percent growth for the fourth quarter. We had 3.3 percent growth for the second quarter.
Look, all the critics have been saying, you know, since Donald Trump first started running for election, you know, "We can't get 3 percent. He's going to crash the economy. He's going to crash the stock market." I remember having these conversations here on CNN a year ago.
Now we've got this booming economy. And by the way, David Gregory, I think made a very good point in your previous sentiment, that there's an anticipation fact here, that businesses are getting ready for this. I've talked to business owners saying, "Look, January 1, 2018, as soon as this tax cut takes place, I'm going to start investing. I'm going to start, you know, purchasing more trucks and equipment and things like that." That's the kind of vibrancy this economy needs.
CUOMO: Why did all those CEOs tell Steve Cohn that they're not going to hire more people even if they get a tax cut?
MOORE: Look, you know, remember, when you talk about, quote, "the rich" getting a tax cut, the reason we wanted to lower that highest tax rate is because two-thirds of the people in that highest income tax bracket, you know what they do for a living? They own, invest, or operate small businesses. That's -- you guys know this. Small businesses are the backbone for the U.S. economy.
CUOMO: Why did they say they're not going to hire people even if they get the tax cut?
CUOMO: Why did they say to Steve Cohn, "We're not going to hire more people even if the rates come down"?
MOORE: My point is those were the CEOs of, you know, some of the biggest companies. I'm talking about small business owners. There's 26 million of them around the country. That's where 60 percent of the jobs come from, is small businesses.
CUOMO: All right. So Anthony, help me with this. Because look, Steve is smarter than I am. That's why I have him on the show, because I want to benefit from his perspective.
MOORE: Thank you.
CUOMO: But is that true, in your estimation, the way Steve is putting it out. That this is what's going to drive more jobs?
Look, Trump made his pitch yesterday. He's got a lot of these passthrough organizations that are going to be benefited by the tax code. He didn't say he was going to hire more people at his hotels and resorts. Do you think that that's a natural consequence of this?
CHAN: You've got to remember, Chris, the unemployment rate is now 4.1 percent. The Federal Reserve is already estimating the lowest it's likely to go in the next year is no lower than 3.9 percent.
CUOMO: That means you're almost a full point.
CHAN: -- point three -- let me finish; 3.3 percent economic growth in the third quarter. But guess what? You can't ignore what happened in the first quarter. Just because it grew at 3.3 percent doesn't mean that for 2017 the economy is growing at 3.5 percent. That's just not true. You've got to look at the whole year. And this year it's going to be below 2.5 percent, no matter what happens in the fourth quarter.
CUOMO: So what does that mean?
CHAN: That means that this tax package will stimulate growth, but it's not going to stimulate growth to the levels that Steven Moore is saying, 4, 5 or 6 percent. In fact, the president has one point, mentioned the number that if you pass this tax reform, the economy will grow in excess of 6 percent. That is almost literally impossible for that to happen with this tax reform package.
MOORE: Are you saying that Donald Trump is exaggerating? He never does that. Look, we're not getting 6 percent growth.
But I will say this. I do think you can -- there were so many critics a year ago that have had to eat a lot of crow who said Donald Trump can't get the economic growth rate up. Two percent. You know, some of the most esteemed, you know, economists on the left, people like Paul Krugman, Larry Summers saying that 2 percent is the top.
CUOMO: Do you both agree that Trump is responsible for the economic growth right now and the stock market right now? Anthony, do you share that, that this is because of Trump?