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Republican Tax Bill All But Passed; Congress' Next Job: Avoiding a Shutdown; No Positive Train Control at Amtrak Crash Site; World Summit on North Korea. Aired 5-5:30a ET

Aired December 20, 2017 - 05:00   ET



MIKE PENCE, VICE PRESIDENT OF THE UNITED STATES: The ayes are 51. The nays are 48. The Tax Cuts and Jobs Act is passed.


CHRISTINE ROMANS, CNN ANCHOR: Breaking this morning a major rewrite of the tax code. The Senate passed the bill early this morning just happened hours ago, folks. It gives the Republicans their first big deal of the year. It will cost them dearly, will it, in the midterms? And what does it mean for you next year?

DAVE BRIGGS, CNN ANCHOR: And a government shutdown could be days away. What's holding up lawmakers and what's most likely to happen by Friday? Good morning, everyone. Welcome to EARLY START. I'm Dave Briggs. I'm getting it together any moment now.

ROMANS: I know, gosh, I know. I'm Christine Romans. It's been a long night, folks. It has been a really long night. It is Wednesday, December 20th. It is 5:00 a.m. in the East.

And let's begin with the Republicans big tax overhaul, all but a done deal. In an early morning vote just a few hours ago, the Senate approved the final version of the bill, scoring Republicans' first significant legislative win since President Trump took office.

[05:00:05] The measure has proven vastly unpopular in almost every poll. It passed along party lines, 51-48.

BRIGGS: The approval came over the objections of Democrats on the Senate floor and protesters in the gallery.



UNIDENTIFIED MALE: The sergeant-at-arms will restore order in the gallery.


ROMANS: President Trump celebrating on Twitter moments after the vote, the United States Senate just passed the biggest in history tax cut and reform bill. Terrible individual mandate from Obamacare repealed.

BRIGGS: The president inviting Republicans to join him at the White House this afternoon to tout passage of the legislation. The only hitch that it will have to wait until the House goes through the motions of passing this bill again.


PHIL MATTINGLY, CNN CONGRESSIONAL CORRESPONDENT: Well, Christine and Dave, without any question at all, the biggest hurdle Republicans face as they tried to pass their tax overall, something that hasn't been done in 31 years, getting it through the U.S. Senate. And early on Wednesday morning, that's exactly what they did. By a vote of 51-48, along partisan lines, every Republican that was in attendance voted for their $1.5 trillion tax plan.

Now, Republicans say this is something that will benefit the middle class, that on the corporate side will completely overhaul how the code currently stands. It's something Democrats have attacked, saying that the corporate cuts are skewed heavily in the favor of business. The individual cuts they expire at a certain point aren't nearly robust enough.

Republicans say even though current polling shows that Americans don't trust this bill, aren't sure what it will actually do, they're willing to sell it.

Take a listen to how Senate Majority Leader Mitch McConnell responded to my question after the vote.

Do you believe there's a need for Republicans to go out and sell this bill given kind of how Americans are currently viewing it?

SEN. MITCH MCCONNELL (R-KY), MAJORITY LEADER: Absolutely. We're looking forward to it. My view of this, if we can't sell this to the American people, we ought to go into another line of work.

MATTINGLY: Now, guys, in an interesting wrinkle, this vote wasn't the final vote. The House still has to vote again. That's right, the House voted on Tuesday to pass the bill, 227 to 203. Another big vote. The expectation was the Senate vote would be it. It would be headed to President Trump's desk. Well, not anymore, because of the Senate budget rules, three small provisions technical corrections were pulled out of the Senate bill. That means it has to go back to the House.

Now, this isn't any type of big problem. The bill is in no danger at all. House Republicans will pass it Wednesday, probably shortly afternoon -- Christine and Dave.


ROMANS: All right, Phil. Thanks for that.

Democratic restoration boiling over leading up to that vote. Minority Leader Chuck Schumer pausing his closing arguments to scold Republicans who were talking during his remarks.


SEN. CHUCK SCHUMER (D-NY), MINORITY LEADER: Nearly 145 million middle class families under $200,000 will either get tax hikes -- can we have order, Mr. President?

UNIDENTIFIED MALE: The Senate will be in order.

SCHUMER: This is serious stuff. We believe you're messing up America. You could pay attention for a couple of minutes.


BRIGGS: Man, we need Chuck Schumer to keep us in order here on the set.

No shortage of reaction after the vote including this tweet from Virginia's Tim Kaine, the former vice presidential candidate. This secret rushed partisan tax bill in no way truly reforms the system. What we need is to reform Congress and that's what we'll do in the midterms.

ROMANS: The GOP tax bill promises big corporate tax cuts with the hopes those tax savings will create more jobs and raise wages. But if the bill passes just 14 percent of American CEOs plan to boost investment. Spending things like new equipment in factories which can lead to hiring. That's according to a survey on the Yale CEO Summit.

The bill slashes the corporate rate, offers incentives to bring foreign cash back, but companies have plenty of cash. Profits are rolling in and unemployment is at a 17-year low. So, business tax cuts don't guarantee a hiring boom. In fact, a recent survey found fewer than half of CEOs plan to ramp up hiring in the next six months. Instead, investors expect companies to help Wall Street, not Main Street, rewarding shareholders with bigger dividends and stock buybacks.

One billionaire business calls it pure fantasy that the tax bill will bring higher wages and growth. Michael Bloomberg calls the bill a trillion dollar blunder writing in an op-ed that CEOs aren't waiting on a tax cut to jump start the economy.

BRIGGS: All right. Let's bring in CNN political analyst, David Drucker, senior congressional correspondent for "The Washington Examiner".

Good to see you, sir.

ROMANS: Hi there.


BRIGGS: All right. We will get into the details of this bill, but when you take a step back, 2010, Democrats rewrite, overhaul our entire health care system with the highly unpopular bill, rushing it through. Nancy Pelosi didn't know what was in it. Seven years later, Republicans rewrite the entire tax code rushing it through even faster to give the president his huge Christmas gift.

[05:05:00] Is this the new norm?

DRUCKER: It's like deja vu all over again, right? Isn't that what they say?

Look, I think this is the political norm of the era that we're in, which is big things only happen with partisan majorities along partisan lines, and that makes it very difficult politically to sell these things because you already have and our divided political culture, our tribal political culture, half the country predisposed to oppose something both on philosophical grounds and just on oppositional grounds. If you're a Democrat, you don't trust Republicans, you don't like Republicans, you're not going to like this tax bill. Philosophically, you're going to be disinclined to like it because it's really written for a Republican by and large.

So, this is the challenge Republicans face going forward is to sell this bill to the right voters in the right places. Now, I think the bill is not the Armageddon piece of legislation that Nancy Pelosi claims. There's a lot in there that both sides have agreed on for a long time.


DRUCKER: The corporate and business reforms even if Republican cuts, the rates go deeper, it's something that Democrats and President Trump conceptually believed in.

BRIGGS: Right.

DRUCKER: On the individual side, what they have to do is convince upscale suburban voters who usually vote Republican and like tax cuts that this is going to be a tax cut for them and if you look at where the House no votes came in, about a dozen, they're from the suburban districts. Republican and swing districts that like Republican congressmen and like tax cuts and they've been very suspicious that the reforms on the individual side are not going to hit them in the wallet.

ROMANS: Well, you know, and the reforms on the individual side are temporary. They will sunset. So, that means we will be revisiting reform again, but not for the corporate side.

Let's dig a little bit into what the tax cut looks like when you look at 2018 on the individual side, you can see tax cuts across the board. That is what Paul Ryan and the president and GOP tax writers promised. These are according to the tax policy center.

Look out to 2027, they expire, and you start to see people paying actually more. Yet the business tax cuts are permanent. Overall earnings for S&P 500 companies are expected to go up like 9 percent just because of the tax they're going to get and the big banks are going to see 13 or 14 percent higher earnings because of this better tax bill.

We keep hearing this criticism that, you know, the -- the polls are showing low favorability because we're focusing on the wrong things, but what we're saying is true. This is really tilted toward corporations.

DRUCKER: Well, it is and I think part of that is the Republicans have believed for a long time that the uncertainty in the business environment has been a damper on the kind of economic growth we could experience. So, we experienced economic growth and job growth under Obama coming out of the recession, but Republicans have believed it could be much more robust, you could have better wage growth, Americans could be much more mobile. And so, now, they're going to be put to the test there.

I do think though politically, the sunset provisions aren't the problem. I think if you look at some of the individual reforms, capping state and local tax deductions, adjusting the mortgage interest deduction, claims that Americans are going to be able to fill out their taxes essentially on a postcard are going to have much less need for accountants to figure out complicated rules. I think that's going to be true for a lot of voters, but I think that there are a lot of other voters in areas of the country that aren't necessarily big fans of Trump that Republicans count on, that are not going to have that experience and even if they do to a degree, you know, it's always about what you believe.

As we learned under Obamacare, Democrats said that voters would like this once they experienced it. And even though you had a new system that protected preexisting conditions and the like, a lot of Americans didn't feel like their health care system was better and they punished Democrats because of it.

BRIGGS: Yes, I think what Paul Ryan said one way or another will be true. He said results are going to make this popular or unpopular. Results will define this bill ultimately.

David, Friday, government funding runs outs. Are we heading for a shutdown or just kicking the can down the road again?

DRUCKER: Well, my vote will be -- my vote in terms of what I think will happen, what I think will happen --

BRIGGS: Your bet.

DRUCKER: My bet, thank you, is they'll kick the can down the road because after taking a lot of votes to pass this tax bill, they're not going to want to step on their own message by shutting down the government and looking like idiots that can't govern.

So, I think they'll find a way to get it us past the holidays. It may mean they have to revisit this in January, but that's where I think we're headed.

BRIGGS: Meanwhile, there's still this -- among the Trump allies this effort to discredit the Russia investigation and Mueller as a special prosecutor and we heard Don Jr. talking to a conservative college group last night and this is what he said. Listen.


DONALD TRUMP, JR., SON OF PRESIDENT TRUMP: My father talked about a rigged system throughout the campaign and people are like oh, what are you talking about?

[05:10:01] But it is. And you're seeing it. There is, and there are people at the highest levels of government that don't want to let America be America. They don't want to let the little guy have a voice.


ROMANS: They don't want to have a little guy have a voice. What do you make of that remark?

DRUCKER: I mean, look, Don Jr. is the president's resident attack dog and he goes out and says the things that the president says anyway, but Don Jr. sort of amplifies that and he's always on the campaign trail. The administration and the president at senior levels are always complaining that the deck is stacked against them. Everybody is out to get them.

They're running the government, so if they have an issue with something, they're in a position to do something about it and they can.

BRIGGS: Well, he managed to do worse than posing with that Obama cookie, amazing that he topped that Instagram post.

David Drucker, thank you, sir. We'll see you in about 30 minutes.


ROMANS: All right. It's 11 minutes past the hour.

A Florida police officer lucky to be alive after this.


UNIDENTIFIED MALE: Whoa, whoa, whoa!


ROMANS: A suspect takes off with the officer hanging on to the car. We'll show you how it ends.


[05:15:28] BRIGGS: Confusion and contradictions in the wake of that deadly Amtrak crash in Washington state that killed three people. Officials now saying the stretch of track where the train derailed did not have Positive Train Control. That's a system that automatically slows down and stops a speeding train. The NTSB says a different safety system was in place, one that most likely would not have prevented the derailment.


BELLA DINH-ZARR, NTSB: We have confirmed that PTC was not installed on this line. Sound Transit had Centralized Traffic Control which is CTC, and this is a system that allows for dispatch direction over the train. CTC is not PTC, however. CTC cannot enforce speed restrictions on a train like PTC can.


ROMANS: Two of three people killed in the derailment have now been identified, Jim Hamre and Zack Willhoite. They were advocates for Passenger Railroad Service and members of the Rail Passenger's Association. No explanation for why the train was going 80 miles an hour in a 30-mile-an-hour zone. The NTSB says it is waiting to interview crew members who are hospitalized.

BRIGGS: Caught on body cam in South Florida, Pembroke Pines police officer John Cusack dragged for half a mile through the Century Village Retirement Community after reaching into a car to stop a suspected drunk driver.

According to authorities, the 19-year-old police veteran observed a man and a woman asleep inside a parked car along with a clear baggy containing an unknown substance.

ROMANS: After being awakened the driver identified as Thomas Cabrera gunned the engine, sped off with the officer holding on to avoid being run over. Eventually, he let go suffering serious road rash injuries to his arms and legs. He was awaiting surgery last night. Cabrera caught by police after a high speed 20 mile chase charged with attempted murder of a law enforcement officer.

The parents of a baby that grew from a human embryo frozen for nearly 25 years, they are ecstatic. Emma Wren Gibson delivered last month in Tennessee after originally being frozen as an embryo in October of 1992. 1992, she's the longest known frozen human embryo ever be born.

BRIGGS: Her parents Tina and Benjamin Gibson tried for seven years to have a baby.


TINA GIBSON, PARENT OF NEW BABY: I tear up thinking about it because it's just such a blessing. They were like well, Tina, this is a world record and I just looked at them and I was like, what? And they're like, yes, it's been frozen for 24-1/2 years. And I was like, are you kidding?

If this embryo had been born when it was supposed to have been, you know, I was like, we could have been best friends. I'm only 25.


BRIGGS: That's remarkable. Baby Emma perfectly healthy, checking in at 6 pounds, 8 ounces and 20

inches long. Previously the oldest known frozen embryo that resulted in a successful birth was 20 years old.

Congratulations to the Gibson family.

ROMANS: And the only number they really care about is how many hours of sleep they're getting into, right?

BRIGGS: Top U.S. officials raising new concern with North Korea.


H.R. MCMASTER, NATIONAL SECURITY ADVISER: If North Korea has a nuclear weapon, I mean, who are you going to try to prevent getting one?


BRIGGS: Foreign ministers from around the world are now scheduled to meet about the matter. We're live in Seoul, next.


[05:23:20] ROMANS: The U.S. and Canada prepared to map out next steps combating the growing nuclear threat in North Korea. They will host a gathering of world leaders in Vancouver next month to advance diplomatic efforts while demonstrating international solidarity condemning Pyongyang's missile testing. It comes as White House officials ramped up warnings about North Korea.

CNN's Paula Hancocks live in Seoul for us this morning.

Good morning, Paula.


Well, as you say, there has been a flurry of comments in the last 24 hours from those within the Trump administration. We heard from the national security adviser, H.R. McMaster, saying the U.S. would not tolerate a nuclear North Korea, saying quite simply that if they say yes to North Korea, then how are they going to say no to other countries, given the kind of rhetoric and threats you see from the North Korean regime?

We also heard from U.S. Secretary of State Rex Tillerson saying North Korea clearly doesn't appear to want to have negotiations at this point. He's back-pedaling he made earlier, saying the U.S. would have talks with North Korea without preconditions. Then you also have the homeland security advisor Tom Bossert when talking about cyber attacks, saying that there really was no other option short of starving the people of North Korea to death.

Now, on the back of this, you do see a flurry of military activity on the peninsula as well. Military drills between the U.S. and South Korean marines taking place yesterday in the mountain of Pyeongchang. This is where we're going to see those Winter Olympics. Authorities here saying they're doing everything to protect those Olympics from any possible attacks.

You can see the U.S. Marines, they're not quite sure why they had their tops off. I was told simply it's a marine thing -- Christine.

ROMANS: I was wondering the same thing.

[05:25:00] Looks cold, but we need to get to the bottom of that. Thanks, Paula Hancocks.

BRIGGS: All right. Breaking news, disgraced former Boston Cardinal Bernard Law has died in Rome after a long illness. Law resigned in 2002 during the church sex abuse scandal. He never faced criminal sanctions for his role allowing abuse of priests to remain the parish jobs.

The resulting coverage and multimillion dollar settlements compromising the church's moral authority. Since his forced resignation, Cardinal Law had served as arch priest in a papal basilica in Rome. He was 86 years old.

Ahead, a major tax code will be finalized today. Republicans say they're ready to sell the unpopular plan. Democrats ready to pounce in the midterms. What this all means for you, next.