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House and Senate Republicans Continue to Work on Reconciliation Deal for Tax Reform; Omarosa Removed from White House; Republican Lawmakers Raise Concerns of Political Bias in Russia Investigation; Key Details of GOP Tax Plan Revealed; Interview with Republican Senator Ron Johnson of Wisconsin. Aired 8-8:30a ET

Aired December 14, 2017 - 08:00   ET

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


[08:00:00] DARIUS MAYFIELD, TRUMP SUPPORTER: I mean, listen, as bad as it may be to say, I have heard those things. I've probably said things, not like that, but I've heard things that are worse.

MIKE BRINDOCK, NON-SUPPORTER OF TRUMP: Maybe one or two, I would think about it differently, but not when 15 people come out against Donald Trump. I think that they are telling the truth.

(END VIDEO CLIP)

CHRIS CUOMO, CNN ANCHOR: So what did you get from this one?

ALISYN CAMEROTA, CNN ANCHOR: I always get fresh perspectives from hearing their perspectives, and what I always come away with is that you cannot put people in a box. You can't just think you know somebody because they are from Alabama or because they voted for Donald Trump or because they are a black man, or whatever. Everybody has a much more interesting tapestry of thoughts. It's not just straight down the line of what conventional wisdom would dictate, and I think that they all sort of show that.

CUOMO: I always are struck by the disconnect between what they say they believe and what they know about what they believe.

CAMEROTA: Meaning that they had heard that tape before.

CUOMO: Yes, I voted for Trump, and with that tape, I think there should be an investigation. Then why did you vote for him?

CAMEROTA: Some of them regret their vote. And so tomorrow we will talk about that and what made them now regret their vote.

CUOMO: We will look forward to that.

CAMEROTA: Meanwhile, good morning, everyone. Welcome to your NEW DAY. It's Thursday, December 14th, 8:00 in the east. President Trump's first legislative win is moving closer to the finish line. House and Senate Republicans strike a deal on a tax plan that economists say mostly benefits corporations and the wealthy. They are pushing for a vote next week, hoping to get the president's signature before Christmas. But a vast majority of Americans disapprove of the plan.

CUOMO: Roy Moore ain't gone. The election is over according to the secretary of state and the voters, but he is saying he will not concede. And this is leading to finger-pointing inside the White House. Moore is saying that he will wait until all the votes are in.

And there was big, big testimony on Capitol Hill from the number two man at the Justice Department on the issue of whether or not the Russia investigation is fair and whether or not he thinks there is reason to fire special prosecutor Bob Mueller.

We have it all. Let's bring in CNN political analyst David Gregory and A.B. Stoddard, associate editor of Real Clear Politics. David Gregory, the tax bill looms largest, signature achievement before the first year is up. Is that enough motivation to get it done regardless of the details?

DAVID GREGORY, CNN POLITICAL ANALYST: I think so. I think for Republican leaders they're looking at a promise mad made has to be a promise kept on a major element of the Republican agenda. This is an area where the president who is trying to tout the success of the economy on his watch as being purely his doing and a stock market that is surging into a new year, and I think a lot of expectation around those gains, particularly in the stock market, has been on the expectation of tax reform. So I think there is a short-term goal here of a political win at the expense of who it hurts, whether it really does shaft the middle class over time, whether it adds to the deficits, what Janet Yellen was concerned about as well. I think they're going to look at that and say there's a short term gain here to be had.

CAMEROTA: A.B., here's some of the latest public opinion polls which are not good for this tax plan. At the moment 55 percent of respondents disapprove, or 26 percent approve. And then if you dive in a little bit deeper it asks if a candidate supports this are you more likely to vote for them in the future or less likely? Forty- three percent less likely. Who do you think the public has not -- who doesn't like a tax cut? Why hasn't the public warmed to this one?

A.B. STODDARD, ASSOCIATE EDITOR, REAL CLEAR POLITICS: That's an interesting question, Alisyn. I think they have been looking at the assessments of the House bill passed a while back and the Senate Bill that was different, but sizing up with the promise -- compared to the promise of President Trump that this would be a middle class miracle, people are not buying it.

And so this is really a difficult political problem for Republicans going into the midterm elections that once the mindset of something like this is crystalized and cemented, sometimes it's hard for people to change their minds even if they see a little more cash coming their way in their paycheck. And so they're really going to have to make a major push in the months to come to try and sell this.

As Chris had his deep dive with the experts last hour, Republicans really are gambling on this kind of sufficient boost of growth that they expect to trickle down. We have seen skeptics on both sides of the aisle says that it is not going to pay for itself. It's going to raise the deficit. It's going to have to be paid for later, and that not, it is not going to provide, quote, tremendous benefit to the middle class, which is what President Trump was saying as late as last week.

And so this is a really difficult issue. Republicans absolutely believe they had to pass this for their survival, as David said, but that doesn't mean that they are going to have voters rushing out to protect them in the midterm elections for passing it.

[08:05:01] CUOMO: It's interesting the president was just tweeting about this, and is leaning heavily on what we would call the anticipation affect, that the stock market is up in anticipation of this. The irony of course is that the president, when he was running and before, used to say don't look at the stock market as an indicator of main street. That doesn't affect people's wages in the middle class. Now singing a different turn. Also, good to have you on board saying that everybody wants a tax cut. Remember when you said you didn't?

CAMEROTA: No, I said I don't need one. If it's for the good of the country and it's for schools and roads, then OK, I don't need one. But I think everybody wants one.

CUOMO: Yes, that's what I said originally. Thank you, it's good to have you. Chris Cuomo, I will be here all week.

(LAUGHTER)

CUOMO: So let's look at the details of what is in the plan now that they've married the two bills. Let's put up a graphic that we have on. The headline is that it's hard to argue that the middle class gets more goodies than the top tier, and that's important because it was supposed to be geared toward the middle class. The top rate has been brought down a little bit. Why? To make up for the state and local tax deduction issue, what they are calling SALT. They have capped it at $10,000.

So the big hitters, states like New York and California, are going to take a hit on what they can deduct from their taxes so they lowered the top rate a little bit to accommodate them. Similarly with the AMT and the estate tax, they have made it more accommodative for the rich. They were going to get rid of it altogether, and that would have been a huge boon to people like Trump. So it's still in there and it is done in a way that is a little bit more favorable than it used to be.

They have also kept in stuff that does matter to the middle class, the mortgage tax, the deductibility is in there. The level has been raised to $750,000. They are letting students deduct their tuition cost, so there's some stuff in there for them as well. So David, when you look at the details, does it help or does it hurt?

GREGORY: Again, I think it helps in a political calculation in the short and maybe medium, term. What did we hear from the central bank yesterday, from Janet Yellen, that the economy is doing very well and it's true across the globe and that those increases, the progress of our economy is in sync with economies around the world. That's very important. Stock market is up at record highs.

So I think people take that in and say, yes, things are going well. It's true if you look at the public opinion surveys, this thing has been battered. People don't really understand what the impacts are, what they are going to be over time. They hear, you know, they are taking away the individual mandate, that it hurts the poor and the middle class, only benefits for so long before being hurt, and I think that does impact how it's viewed over time.

I think the best way to understand this is they went on a course, Republicans did, said we are going to reform the tax code, and they are going to do it. And there's a lot of their own principles that they are setting aside here, including the concern over the debt based on a promise of what it's going to mean down the line. But I don't think defeat has ever been an option here. This is one area where the president is going to ride them throughout the process to claim a victory.

CAMEROTA: A.B., next topic. You might be one of the people that thought the Alabama Senate race ended Tuesday night with Doug Jones' win, but you would be mistaken according to Roy Moore, who says that we are still in a struggle for civilization over this. Let me play for you his lack of concession speech.

(BEGIN VIDEO CLIP)

ROY MOORE, (R) FORMER ALABAMA SENATE CANDIDATE: We are, indeed, in a struggle to preserve our republic, our civilization and our religion, and to set free a suffering humanity, and the battle rages on. In this race we have not received the final count to include military and provisional ballots. This has been a very close race and we are awaiting certification by the secretary of state.

(END VIDEO CLIP)

CAMEROTA: Somehow this gets stranger after the race.

(LAUGHTER)

STODDARD: Well, Roy Moore might be making another video in a few days with his horse Sassy, and it could a lot stranger, Alisyn. But this is really a bizarre situation for him to be making these claims since the questions about the military and provisional ballots have already been asked of the secretary of state on CNN. He voted for Roy Moore and he has basically made the case that they are not going to make the difference. We can wait a few more days. He can keep talking about this race as a spiritual battle to save civilization, but Doug Jones is going to prepare to become the next senator from Alabama.

CUOMO: All right, so another thing that the president chose to tweet about this morning was saying goodbye to Omarosa for her service. "I wish you continued success." David Gregory, there is controversy about whether or not she resigned or was fired, whether she was escorted out, whether she was angry, whether she wanted to try to talk to Trump and he wouldn't talk to her.

CAMEROTA: In his house.

CUOMO: So here's what she said this morning on "Good Morning America" about it.

(BEGIN VIDEO CLIP)

[08:10:00] OMAROSA MANIGAULT-NEWMAN, FORMER WHITE HOUSE POLITICAL AIDE: When I have a chance to tell my story, Michael, quite a story to tell. As the only African-American woman in this White House, as a senior staff and assistant to the president, I have seen things that made me uncomfortable, that have upset me, that have affected me deeply and emotionally, that has affected my community and my people. And when I can tell my story, it is a profound story that I know the world will want to hear.

(END VIDEO CLIP)

CUOMO: A little bit of that Trump hype --

CAMEROTA: I smell a book.

CUOMO: Coming soon.

GREGORY: Yes, the White House reality TV show ethics in the White House. She is probably in good company. I think there are a lot of people who agree who didn't work for the president who have seen a lot of things that have made them uncomfortable.

But it's an allusion to a story that may go deeper and may create new controversy. What the president has already got is a lot of his own making, and I think this Roy Moore story and the reckoning in Alabama is one that is going to travel and create real questions about what the impact is on Trump and his party in 2018, whether he has the kind of staying power that he demonstrated in the presidential election or whether Roy Moore was just so fatally flawed that it's a more localized question. But I still that that's the big reckoning here today and moving into the future beyond Omarosa.

CAMEROTA: How much will the chain of command be disrupted with Omarosa out, A.B.?

CUOMO: Are you serious?

CAMEROTA: No. Of course I'm not serious. I don't even know what she did. Nobody can even tell anyone what her job description was. April Ryan reported she made $180,000 a year, obviously taxpayer money, but people are unclear on what she did in the White House other than sort of cause high drama.

STODDARD: The stories about General Kelly's reshuffling of the West Wing and reorganizing a new structure there months ago indicated that no one knew what she did, and it has obviously taken him a long time to sort that out. I turn to Maggie Haberman who is the expert to Donald Trump above all else, and she basically has made the case several times that he has a very difficult time letting people go who has been close, loyal allies. And so that's why I think we saw a goodbye tweet, and it sounds like from the story that they did not have a formal goodbye in person, which is why she was running around the residence setting off alarms.

CAMEROTA: On that note, I mean -- there's not much more to say, A.B., thank you, David Gregory, thank you.

So now to this story. Deputy Attorney General Rod Rosenstein defending Robert Mueller and the Russia investigation. He told a House committee that there is no cause to fire the counsel. Rosenstein also pushing back on suggestions that the investigation is biased. CNN's Jessica Schneider is live in Washington with more. Jessica, what have you learned?

JESSICA SCHNEIDER, CNN CORRESPONDENT: Alisyn, Rosenstein was unwavering in his support of the special counsel and his team throughout that hours long contentious hearing where Republicans repeatedly alleged political bias. Of course their pointing to anti- Trump text messages between FBI agent Peter Strzok and FBI lawyer Lisa Page during the election and the primaries.

The Justice Department, they released hundreds of those messages this week. Two were from March, 2016, and they show Lisa Page, the FBI attorney, saying this, saying "God, Trump is a loathsome human." Strzok then responds "Yet he may win." There was another text that has Page saying "OMG he's an idiot," to which Peter Strzok responds "He's awful."

So because of that Republicans want a second special counsel appointed to investigate since Strzok was on the Russia probe until he was removed this summer when those text messages were revealed. And he did play a leading role in the Hillary Clinton e-mail server investigation. But Rod Rosenstein is now saying that the inspector general's investigation on all that is sufficient for now, and he said Robert Mueller himself will not be fired.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Have you seen good cause to fire special counsel Mueller?

ROD ROSENSTEIN, DEPUTY ATTORNEY GENERAL: No. We recognize we have employees with political opinions, and it's our responsibility to make sure those opinions do not influence their actions. And so I believe that Director Mueller understands that and that he is running that office appropriately.

(END VIDEO CLIP)

SCHNEIDER: However, Rosenstein's explanation, it has done little to placate Republicans. In fact the number two Republican in the Senate, John Cornyn, he called last night for special counsel Mueller to clean house of people on his team who have been politically active or even those who have made comments critical of the president. Chris and Alisyn?

CUOMO: And yet, you could see yesterday how hard the Republicans were working, certain ones on that panel, to get Rosenstein to add some fuel to the fire that there are concerns about the investigation. He was not giving them any. Jessica, thank you very much.

So President Trump made a big promise on tax reform. He said it would be a giant tax cut for the middle class. Is he keeping his promise? The facts, next.

(COMMERCIAL BREAK)

[08:18:37] CAMEROTA: The GOP racing to get its tax bill passed as soon as next week. House and Senate Republicans have hammered out a deal, but what's in it?

CNN chief business correspondent Christine Romans is here with the details.

What did you see?

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESONDENT: This is moving at warp speed. Those details are important. They've hammered out some compromises and some of the biggest changes help corporations and the wealthy, one reason you saw record highs in the Dow yesterday.

Here's what we know: the top individual rate slashed to 37 percent and that's lower than in both bills. It is a concession to top earners in high tax states who are losing their state and local tax break.

On mortgage interest, the compromise means right in the middle, filers can deduct interest up to $750,000, that's three times by the way the typical home value in America, and the corporate rate is cut to 21 percent here. Both bills had promised 20 percent, 20 percent, but cutting the rate to 21 percent that actually raises $100 billion in revenue and that helps to pay for the tax cuts.

And GOP argues lower corporate taxes will help every day Americans, but there's no guarantee that will add jobs or wages, at least not right away.

Now, President Trump's closing argument is that this bill is a giant middle class tax cut, but it's less than advertised. We will need to see the final bill to know for sure, but in the past versions, middle class tax cuts are modest and have a short shelf life. In fact, for Americans making the median income, 81 percent get a tax cut in 2019, but by the year 2027, only 14 percent still have that tax cut and a fourth of people pay more.

[08:20:06] Now, a bright spot here -- they worked out a lot of these deductions. The final bill is a tax break for medical expenses, very important for a lot of families. It also retains education reductions for student loans, for grad school, grad students and teacher spending. It also, of course, repeals Obamacare's individual mandate and that is something that could be a sticking point for some senators, although it looks, guys, that there is -- a failure is not a option for the GOP on this one.

CUOMO: The gift of fact. Thank you, Christine Romans. Appreciate it very much.

So, can they get this done? There's other big news to discuss, so let's bring in Republican Senator Ron Johnson of Wisconsin.

If I don't speak to you before, merry Christmas to you and your family. Thanks for coming on NEW DAY.

SEN. RON JOHNSON (R), WISCONSIN: Merry Christmas to you and your listeners as well. Good morning.

CUOMO: All right. So, a couple of items to tick through and then we got to get after it on taxes. The first one, listening to Rosenstein yesterday, did he alleviate any concerns that you had about how they will treat people with political activity within the ranks of the FBI or as part of the Russia investigation, and any concerns about whether or not the probe is being handled the right way and Mueller is doing his job the right way?

JOHNSON: Now, to a certain extent he alleviated some of my concerns and I still have concerns dating back to the FBI investigation of the Clinton e-mail scandal. I mean, the fact that -- and I can't pronounce the guy's name, but the one FBI agent --

CUOMO: Strzok?

JOHNSON: Yes, the one FBI agent was really in charge of those interviews where -- you know, that investigation of the Clinton e-mail scandal was not really meant to uncover the truth and lead to prosecution but was meant to cover-up and exonerate from stand point. I mean, you bring in the conspirators and you don't interview them under oath and you let them destroy evidence off of their computers.

So, there was some real politicization I think of that investigation, I think that has a carry over effect, the hangover affect in terms of, you know, people's concern about the Mueller investigation as well. So, there's something going on in the FBI, and there has been a politicization of it, and James Comey was being investigated for Hatch Act violation, we're trying to get the unredacted testimony of his deputies from the office of special counsel, can't get that.

It would be a whole lot easier if the FBI and Justice Department would turn over the records to Congress so we could do our legitimate oversight work.

CUOMO: Well, you got an inspector general who's looking into it as Rosenstein outlined, and that's a person that is totally independent without any political agenda. So, we'll see what they rise.

How about within your party, the mood after the Moore election?

JOHNSON: Well, you know, from my standpoint, I think what that election basically said is the voters of Alabama did not want to be represented in the United States by a man who in his 30s was trolling shopping malls and was trying to pick up girls in their teens. So, I don't think it says a whole lot more than that. Probably a good thing he was not elected. Obviously, we would have liked to have had a Republican and I think Alabamans would have liked to have a Republican senator from their state, it would help us pass additional pro-growth measures, but it is what it is.

CUOMO: If we are going principle over party, does that shed light on whether or not there should be an investigation of the allegations into the president of the United States for sexual assault.

JOHNSON: Well, if you want to bring up the president of the United States, let's go back to Bill Clinton.

CUOMO: Why? He is not president anymore.

JOHNSON: Because, I had very young daughters --

CUOMO: He was impeached.

JOHNSON: Chris, I had very young daughters during that phase, and the fact that he was not held accountable, any other CEO --

CUOMO: He was impeached.

JOHNSON: Yes, but he was not convicted, he wasn't thrown out of office and he did not have -- he really did not have the grace to resign from that office, and I think that has had spillover affects and really has resulted in a lot of the irreconcilable behavior we are seeing here today.

CUOMO: So, you're saying that because you don't like how the Clinton situation was handled, you're going to go easy on Trump. Is that what I just heard?

JOHNSON: No, listen, Trump's problems were vetted during the campaign.

CUOMO: Were they?

JOHNSON: They were, yes, they absolutely were. All of these allegations were understood during the campaign and the American people elected Trump, so just like President Obama, he's the duly elected president of the United States. I'm going to do everything I can to help him achieve his goals of keeping this nation safe and secure and more prosperous.

CUOMO: So, no, you do not endorse any investigation of the allegations against President Trump even though more women have come forward?

JOHNSON: Something during his presidency, absolutely we have to provide oversight, and prior to that, the voters spoke.

CUOMO: Even though the accusers of bill Clinton was before the president of the United States? You missed that.

JOHNSON: No, Monica Lewinsky was his intern in the White House.

CUOMO: That was completely vetted, it was consensual, and he was impeached.

JOHNSON: I know. And Democrats refused to convict him and shove him out of office which I think was very unfortunate.

CUOMO: All right. Let's get after it on taxes, Senator.

This was sold as being best for the middle class. Every objective analysis would say it is good for members of the middle class, at least early on, and then the analysis gets subjective, but it's not best for the middle class.

[08:25:05] Is that acceptable to you?

JOHNSON: Well, again, that's subjective statement right there.

From my standpoint, tax reform has also been involved economic growth and the fact that globally, American business tax system is not competitive, not even close. Every other most of the developed nations have dramatically lowered their taxation levels on business, and so we are uncompetitive. So, if we are going to realize the full potential of the American economy, we have to first and foremost make sure our businesses, both pass-throughs and C-corps are competitive, this tax reform absolutely does that.

And, Chris, when you have such low unemployment, you have more robust economic growth. We have had tepid growth of 2 percent. Since World War II, our economy has achieved over 3 percent on average. It's a huge difference and that type of robust economic growth is definitely going to push up wages. I see it in Wisconsin every day.

CUOMO: Well, we don't know it's definite. We know the growth rate is up and the stock market is up. We do know that unemployment is down. But all of those are factors that led Alan Greenspan to say you don't need a tax cut right now because you are already growing robustly, so what you really did was give a gift to corporations, 60 percent of the tax benefits under objective analysis go to the top tier, their cuts are permanent, the cuts for individuals are temporary. It seems to show a preference.

JOHNSON: First of all, I would credit a lot of the robust economic growth right now to the deregulation that is occurring right now, or at least the pause in the regulatory overreach of the federal government. That's given businesses an awful lot of certainty, and the next thing we need to do to keep that economic activity robust is having competitive taxes for our businesses, for our businesses in the U.S. So, that's the second component.

Next, I think we have to address our labor force. We have to stop incentivizing people not to work and we have to get people off the sidelines and we have a very low labor participation. So, you have a robust economy, wages are driven up, that's going to entice people off the sidelines. That will be the third ingredient with immigration reform, because right now in Wisconsin, there's not enough workers to fill the jobs in manufacturing, for example.

So regulatory relief, this pro-growth tax reform, combined with welfare reform and immigration reform. I think those will be three primary ingredients to keep this economy growing robustly.

CUOMO: Well, the idea that you are at almost full employment, any idea that you have a lot of people not working, you know, that's going to take a little more explanation, right, Senator? You have everybody working basically who can, and do you really believe the space, the difference in the workforce is about people who are malingers.

JOHNSON: What I'm saying is people have not been incentivized to come off the sidelines probably because wages have not grown the way they should, although it's certainly beginning to happen.

CUOMO: Why haven't the wages grown?

JOHNSON: Because we have not had the robust economic growth.

CUOMO: Because the corporations makes decisions for themselves. You had the CEOs tell Gary Cohn, I'm not going to hire people because you cut my taxes. And you didn't get rid of the loopholes in the tax code for the corporations. You just give them a cut. So, why would they do anything for the workers if they don't have to?

JOHNSON: If you've been watching this debate, I have been really pushing for the benefits of pass-through entities so they can remain competitive globally, as well as domestically. Those are the owner operated businesses, the bedrock of so many communities.

CUOMO: Right.

JOHNSON: Those are the folks I've been fighting for to make sure that as we make C-corps competitive globally, which we must do, which will -- your previous guest, your liberal guest even admitted that this is a pro-growth taxes and as we make C-corps more competitive, we can't leave the pass-throughs behind --

CUOMO: Anthony Chen is no liberal, by the way. He's an investor banker.

JOHNSON: He seems liberal to me.

CUOMO: And he is an economist.

JOHNSON: Less conservative, let's put it that way.

But again, the bottom line, I was advocating for those pass-through businesses so they compete globally and that they compete domestically against C-corps. I think my efforts paid off and we certainly closed a gap and I was very pleased about the result.

CUOMO: We will see if it changes wages and hiring, but what we know for sure is that even with pass-thoughs, the majority of income goes to the top 1 percent. So, that's who is benefiting from that. Whether it benefits for everybody else is a maybe and not a certainty.

JOHNSON: The top 1 percent pay about 38 percent of the total income taxes, 25 percent of the total tax burden. The bottom 60 pay 2 percent of the income tax, about 15 percent of the total tax burden. So, if you are going to make your business tax system more competitive, lower the rates, that's going to benefit the people that pay the tax. One percent pay 38 percent of the income tax and that's where a lot of the tax benefits are going to go, but the economic benefits are going to go throughout the economy and they're really going to benefit the middle income Americans.

CUOMO: All right. And let's see what happens with the final bill and the loopholes because that will show you have an interest in having corporations pay their fair share.

Senator, I love the debate with you, I love testing your positions. Thank you for coming on. Again, have a merry Christmas.

JOHNSON: Merry Christmas. Same to you.

CUOMO: Alisyn?

CAMEROTA: Well, a peculiar remark by a female congressman who says that women in Congress actually invite sexual harassment by their choice of clothing. A fellow lawmaker is going to weigh in next.