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Senate Passes GOP Tax Overhaul, House to Revote Today; Don Trump Jr. Floats New Conspiracy Theory about Russia Investigation. Aired 7-7:30a ET

Aired December 20, 2017 - 07:00   ET


SARAH HUCKABEE SANDERS, WHITE HOUSE PRESS SECRETARY: ... take a big hit. On the business side, he could benefit.

[07:00:05] UNIDENTIFIED FEMALE: The conductor was in the actual passenger section at the time of the accident.

UNIDENTIFIED FEMALE: All of a sudden it was just crash. And there I was, down.

UNIDENTIFIED MALE: We will find out what happened in this horrific event, and we will make sure that in the future rail safety is assured.


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

ALISYN CAMEROTA, CNN ANCHOR; Good morning, everyone. Welcome to your NEW DAY. Chris is off. Bill Weir joins me. You picked a busy day.


CAMEROTA: You do. There seems to be a lot of breaking news when you're around.

WEIR: I follow the action.

CAMEROTA: Well, you're here. We do start with breaking news for everyone.

A massive overhaul of the nation's tax code just hours away from reaching the president's desk. The Senate passing the GOP bill while you were sleeping overnight. The House is expected to follow suit in a revote today, approving a bill that has been deeply unpopular in the polls.

But those polls are not quieting the celebration at the White House. President Trump is set to hold a ceremony to sign this bill into law this afternoon. The next challenge for Republicans is avoiding a government shutdown. The funds run dry at midnight Friday.

WEIR: A lot of giddy folks in the GOP this morning.

Meanwhile, Donald Trump Jr. is trying to discredit the Russia investigation. The president's son telling a group of young conservative activists that the probe surrounding his father's campaign is being fueled by government higher-ups conspiring to block President Trump's political agenda.

CNN is covering every angle, per usual, starting with Joe Johns live at the White House.

Good morning, Joe.


The White House is pushing toward a media event later this afternoon. On Twitter, the president promised a news conference. We'll see what form that ends up taking.

The initial White House reaction to action on Capitol Hill was to start recounting all the other things the administration sees as its accomplishments over the last year. But make no mistake: this will be the first legislative victory, major legislative victory for the president this year.



JOHNS (voice-over): Senate Republicans celebrating after passing the first overhaul of the U.S. tax code in 30 years along strict party lines.

SEN. ORRIN HATCH (R), UTAH: The Democrats have said that the American will -- American people will remember this night. I hope they do.

SEN. MIKE ENZI (R), WYOMING: This country will be moving forward again.

JOHNS: The early-morning vote, which was interrupted by protesters...




JOHNS: ... coming amid fierce objections from Democrats who attacked the $1.5 trillion bill for disproportionately helping corporations and wealthy Americans. Senate Minority Leader Chuck Schumer chastising Republicans for talking in the chamber during his closing argument.

SEN. CHUCK SCHUMER (D-NY), MINORITY LEADER: 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 can pay attention for a couple of minutes. JOHNS: Ohio Democrat Sherrod Brown prompting a rebuke about decorum

from an aide to Majority Leader McConnell following this moment during the Senate debate.

SEN. SHERROD BROWN (D), OHIO: This tax cut raises -- it causes a huge budget deficit to give money to the wealthiest people in the country, creates a huge hole in the budget. And who's going to fill the hole in the budget? Not the -- not the lobbyist walking in and out of Senator McConnell's office 100 feet down the hall.

JOHNS: CNN polling shows the bill is unpopular with the majority of Americans, but Republicans remain convinced that once the legislation is enacted, public perception will improve.

SEN. MITCH MCCONNELL (R-KY), MAJORITY LEADER: If we can't sell this to the American people, we ought to go into another line of work.

JOHNS: Earlier in the day, the House also passed the tax bill with every Democrat and 12 Republicans voting "no."

REP. PAUL RYAN (R-WI), SPEAKER OF THE HOUSE: The conference report is adopted without objection. The motion to reconsider is laid upon the table.

JOHNS: But after the vote, the Senate parliamentarian found three small provisions that violated budget rules, meaning the House will have to revote on the bill later today.

SEN. BRIAN SCHATZ (D), HAWAII: To me it's emblematic of what happens when you take major legislation, conceive of it in the dark and rush it through.

JOHNS: After likely passing again in the House, the it will be sent to the desk of President Trump. He congratulated Republicans in both chambers after their votes. Due to changes in the estate taxes and the alternative minimum tax, the president is likely to benefit greatly from this bill, despite insisting otherwise.

DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: This is going to cost me a fortune, this thing. Believe me. Believe me. This is not good for me.

JOHNS: Press secretary Sarah Sanders repeating these claims Tuesday before conceding Mr. Trump could benefit.

SANDERS: In some ways, particularly on the personal side, the president will likely take a big hit. But on the business side, he could benefit.


JOHNS: Now there is one more issue lawmakers have to deal with before they leave town, and that is the spending bill to keep the government from shutting down. Several sources tell CNN the only likely scenario at this stage is yet another short-term continuing resolution.

[07:05:07] Bill and Alisyn, back to you.

CAMEROTA: OK, Joe, thank you very much.

Let's bring in our CNN political analysts John Avlon and Alex Burns to talk about all of this.

So let's just throw up first for everybody on the screen what's in this bill. Since it happened, you know, while everybody was sleeping, let's just go through a few details.

WEIR: Alisyn, the accountant.

CAMEROTA: Yes, I'm very good at numbers, as you all know. So here we go.

For the individual, it lowers most individual rates. It nearly doubles the standard deduction. That will be music to the ears of lots of people. It eliminates, though, personal exemptions. So that's -- you get the deduction in lieu of that.

It caps state and local tax deductions at $10,000.

WEIR: Right.

CAMEROTA: Which is not good news for people in California, New Jersey, New York, Connecticut.

It eliminates the health insurance mandate of Obamacare.

For corporations...

AVLON: That's big, though.

CAMEROTA: It's huge. So let's look at the corporate -- corporations. It slashes the corporate tax rate. This was the headline that Republicans have been wanting for decades. So now that's down to 21 percent from 35.

It lowers the tax burden on pass-through businesses. This one is controversial, because this is where the president, from what little we know of his tax returns, stands to benefit greatly because of his -- the way he's operating his real-estate empire, as well as Jared Kushner.

It changes how U.S. multinational corporations are taxed.

Alex, what else do we need to know?

ALEX BURNS, CNN POLITICAL ANALYST: Look, I think those are clearly the main points. What we're going to need to watch play out now on the political front is whether this gets sold as an corporate tax cut, as an economic stimulus through the form of stimulating corporate revenues and how much it gets sold effectively as a middle-class tax cut. That's an argument that we've really not heard break through so far. The polling by CNN and other outlets has indicated that people mostly don't buy that they're going to be getting a tax cut, even though many of them will.

WEIR: Right.

CAMEROTA: That's just a problem in P.R. I mean, they'll solve that.

BURNS: In some ways it's a problem in P.R., but in other ways, you know, we remember -- I remember very well, you know, the day that Obamacare passed, Democrats predicting very confidently, "This is a public relations problem. When people see the impact go through, they will change their minds."

Republicans need to explain to people what's actually going to happen to their taxes. Because there's one thing that makes people nervous about their finances, it's change.

WEIR: But by some measures, Obamacare is twice as popular as this bill. As a tax cut.

CAMEROTA: The thought -- Democrats...

WEIR: So public sentiment be damned.

CAMEROTA: But this is an interesting guide. It did take years for it to catch on. I mean, Democrats did have to wait for the popularity. So maybe this -- they're laying the seeds and the popularity of this will rise.

WEIR: But given the unpopularity, and the fact that they jammed this through in three months is a political feat for the history books.

AVLON: It is an accomplishment for Republicans who needed to put a win on the board and for whom tax cuts are always the closest thing to holy. They got it done. It's a partisan vote. They got it done in record time.

I think the problem is the president campaigned on the middle-class tax cut. This is not primarily that. This was presented as an opportunity for simplification, something God knows we need. This is not that.

This is primarily a corporate tax cut under the belief that that will finally lift wages which have been stagnant. That that will bank shot help the middle class. And it might. There are cuts for folks, but they're weighted towards the wealthy.

WEIR: As the individual cuts expire, the corporate ones do not.

AVLON: Correct. Correct. And so that's a big deal. Look, we will -- we will -- right now politics is perception. But the fact that a tax cut bill is more unpopular than tax hikes, that's a bad sign to start with. So let's see it take place. Let's hope it has the effect that's intended, and let's hope it doesn't have unintended consequences like exacerbating income inequality, because that would be bad for society.

CAMEROTA: Phil Mattingly did an interesting piece for on the behind-the-scenes machinations of how this all went down. So a couple things.

They decided that, if they were going to do this in three months, which is unheard of, and if they weren't going to have the disaster of the repeal of Obamacare, that did not go their way, they were going to have to keep members away from the press so that they couldn't express any of their own doubts to the press, which, you know, would then sort of catch fire.

And they were going to have these off-campus, off-site meetings, conferences at Fort McNair nearby and talk it through until every member was comfortable and had all of their own grievances and issues addressed. That seems to have worked.

BURNS: It sure does. And this is really sort of the first really mature legislative process that Republicans have managed since taking control of Congress in 2010. That you've never had this party actually pass major legislation that might then actually be signed into law by a Republican president up until now.

So this is a huge moment we're witnessing.

I do want to underscore the stakes of this legislative bite for Republicans. That, yes, we're less than a year into the Trump presidency. Yes, regardless of the outcome of the midterm elections, they have control -- full control of government for another year.

But as a practical matter, they have maybe eight months left to legislate before the 2018 campaign really kicks in. Maybe until the middle of next summer to get things done. So if they didn't land this and land this now, you were looking at maybe a wipeout. Maybe two years just totally wasted.

[07:10:17] AVLON: Yes. And look, and the fiscal conservative rallying cry of fiscal responsibility, of taking on the generational theft of the deficit and the debt, that -- they gave away the ghost on that. They basically waved their white flag.

WEIR: Well, Pat Toomey said, "Let's see, we'll expand it by 2.5 trillion," and then they settled for 1.5 trillion.

AVLON: I mean, that's Pat Toomey, who's you know, been a fiscal conservative warrior. That has been a mainstay of Republican orthodoxy. That has united the tribe that has helped them reach out to independents and moderates. And that -- you know, they seem to only care about that when a Democrat is in the office. That's baked in the cake now.

CAMEROTA: But now they say, "But all of the economic boon that will happen from this will wipe that out."

AVLON: No. Not with even 1.5. Even their calculations say, maybe they'll only add a trillion.

BURN: One of the big lessons of the Trump campaign -- this is not something that Pat Toomey was saying last year. But one of the big lessons of the Trump campaign: Republican voters don't care nearly as much about deficits and debt as they claim to. Donald Trump campaigned as a big spending Republican. And he was attacked in the primary for it, and Republican voters didn't care. And we know Democratic voters don't especially care about this. Independents do.

CAMEROTA: Give me eight years of my life back during the Obamacare, I mean, during President Obama when we talked about it.


WEIR: Yes. He was gnashing his teeth over the debt. Not this morning.

Let's talk about Don Jr. quickly. The president's son making headlines yesterday speaking to some conservative college students and saying this about the Russia investigation.


DON TRUMP JR., SON OF DONALD TRUMP: My father talked about a rigged system throughout the campaign. And people are, "Oh, what are you talking about?" 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.


WEIR: Sort of the deep state boogeyman that we've heard from -- of before. Gentlemen, why is this important? What do we gain from hearing that?

AVLON: Look, I think it's inside-Trump table conversation. But the fact -- for me the most chilling part isn't an allegation of a deep state, although conspiracy theories among the first family are not a good sign of stability.

It's there are a group of people who don't want America to be America. That is a really specific dog whistle that is about -- that there are folks who don't want our country to be its best. Not just that they want to somehow undermine the president, but they actually are trying to undermine this country and our fabric. And they work for the federal government that the president runs. That is a dangerous rhetoric that disrespects deeply the service of people in our government.

CAMEROTA: This is where the circular logic gives me a headache. Because if there's a deep state and the people don't want America to be America, they're -- from within, they're undermining the country. Just follow this conspiracy theory.

AVLON: Yes, yes.

CAMEROTA: These wizards behind the scenes are being operated by the Russians? That leads us back to who? It used to be the Russians. Now in the Trump conspiracy, who would be the puppeteers above these people?

BURNS: I don't know how hard you can...

CAMEROTA: Wait, I know. What am I saying? It's Hillary. It's Hillary. What am I saying?

BURNS: You know, look, I don't know how many follow-up questions Don Jr. is going to be prepared to answer on this one. But you know, the highest levels of government is a pretty specific characterization. You can't, at this point -- we're really in a different place than we were 10 months ago. You can't point to that many people who are at the highest levels of government who his dad didn't put there. So who's he talking about?

AVLON: Right. And that's part of the irony. There's only so long you can run against Washington when you run Washington. But this is also a deeper rift. I mean, if you go back into wing nuts and that era, this is an old rift back to, like, the John Birch society. That there are people at the highest levels of government trying to undermine American sovereignty. And they hate our country.

WEIR: And Joseph McCarthy.

AVLON: Absolutely.

WEIR: The Committee on un-American Activities. It's the same parlance, right?



WEIR: But the Trump -- the Trump machine works if you have an "other." You know, that foil, counterpunch. If it's not the media or it's not Hillary, it could be the deep state.

Gentlemen, thank you so much.

CAMEROTA: The Trump administration getting set to celebrate its first legislative win today. But polls show the tax plan is not popular with voters. So how will Republicans sell it to the American people? We have Congressman Sean Duffy here next.


[07:18:35] CAMEROTA: In just a few hours, the House is expected to vote again on the GOP tax plan after hitting a procedural bump in the Senate. But it is expected to pass, and the White House plans to celebrate President Trump's first major legislative win this afternoon.

Joining us now is Congressman Sean Duffy. He's a Republican from Wisconsin. He's the chairman of the Financial Services Subcommittee.

Congressman, good morning.

REP. SEAN DUFFY (R), WISCONSIN: Hey, good morning, Alisyn. Thanks for having me on. Merry Christmas. CAMEROTA: Merry Christmas to you. I know you feel you got an early

Christmas present.

DUFFY: Yes, I think America does, too. So...

CAMEROTA: That's great. So you're taking a bit of a victory lap today, other than this procedural hiccup. This is going to happen. And can you just peel back the curtain for all of the viewers today on what allowed this to happen in the space of three months? I mean, we know the failure of the Obamacare repeal. So what was different this time?

Here's what we understand. There was some sort of off-campus retreat where everybody got together and sort of got on the same page. So tell us what it looked like in the halls of Congress there.

DUFFY: I think you have to go back even further, Alisyn. So this started back in 2016 when we put out a better way, talked about tax reform and what tax reform should look like. We wanted to make it simpler and make sure it hit our corporations, because their tax rates are much (ph). And it also goes to the middle-income Americans. So that was the first process.

And then most of our attention was drawn to health care reform. That wasn't very successful. And our second agenda item was going to be tax reform. So once health failed, the Ways and Means Committee, that's the tax writing committee, they had been working all year on tax reform. It just that it came to light for everybody as tax reform -- health care reform was over.

But yes, you know, we wanted to get a different environment. So to talk about what we want to do on tax reform, we wanted to get off the Hill. We wanted to go to a different location. And sometimes venue can be helpful.

But listen, a three-month process and America is going to be able to read the different bills in the House and the Senate and now the conference committee. It has been an open and transparent process. I think it's going to benefit every single American family, especially lower income American families.

CAMEROTA: Well, look, obviously, Democrats don't think it was a transparent process. They think that a lot of this was done in the cover of the night. They think that they weren't invited into the process. But listen, you guys won.

Here's the problem. The latest polls. When you said Americans have had a chance to read it, they don't like what they have read thus far. The latest poll out yesterday morning shows that 55 percent of Americans oppose what they see in this bill. They don't like it. So why have you guys done such a lousy job of selling it to Americans and how are you going to change that?

DUFFY: Well, if you listen to the Hill and you listen to a lot of media sources, they'll go, "Oh, my God, this is tax breaks for the rich and does nothing for middle-income Americans." If that was true we would have real problems and those poll numbers would be right. That's not the truth.

If you actually look back to Ronald Reagan in the Eighties when he passed tax reform, it had lower approval ratings than this package.

But the truth is, when people start to see they have more money in their paychecks because of tax reform, and they see the economy grow, they're going to love it.

So, look, what does the Democrat Party saw about tax reform? Well, it didn't come to pass. What Republicans were saying actually happened for me and my family. I got more money.

So I think in the long run, because more money goes to families and you're going to see better economic growth, this is going to be a winner for America but also for those of us who voted for tax reform.

CAMEROTA: I mean, the truth also is, Congressman, that corporations do get a huge benefit, arguably the biggest benefit from this by having their tax rate lowered so much.

You seem to be putting a lot of faith or stock, I should say, in the goodwill of corporations, that there's going to be a trickle-down effect. And that hasn't always been true. And I'm not sure what you're pinning your faith on, because even CEOs haven't said that they're going to spread this around to higher wages of their workers.

DUFFY: Well, I'll point to a couple of basic facts. I think it's a good point, Alisyn, but I would disagree with you in the sense that even Barack Obama, not a trickle-down economics guy, not a conservative, he said that 35 percent corporate rate was too high. He thought we should have gotten to 25 percent. We're at 21 percent. So we're not far off, even, where Barack Obama was.

When you see American corporations that pack up and leave and go to other countries because of tax rates, we might go, that's not a big deal. But they take jobs from American families away from them when they leave.

And so I want to make sure that though the average rate in the industrialized world might be just below 20 percent, when we go to 21 percent with our corporate rate, American families win. When American businesses compete, that means jobs and better salaries for the American people.

Now, I can't specifically point to what CEO is going to do what. All I know is when they have more money, and they can bring that money home, they'll reinvest. They'll innovate; they'll create in our economy, which means our families prosper.

CAMEROTA: Hopefully. I mean, hopefully, they'll do that. But the truth is, hold on, Congressman. The truth is they've been sitting on record profits. They're sitting on cash right now. They're flush with cash. Our big corporations, they're not cash-strapped. And they haven't been raising wages. And they haven't been necessarily investing into this. I mean, there was this moment where Gary Cohn, who's one of the top

White House economic advisors, he was at this conference of CEOs, and they were asked point-blank, "What are you going to do with your tax cut, with all of your profits?" And he expected them to say just what you're saying. And they didn't. Watch this moment. Watch this moment.


JOHN BUSSEY: If the tax reform bill goes through, do you plan to increase your company's investment, your company's investment, capital investment? Just a show of hands. The tax reform goes through?

GARY COHN: Why aren't the other hands up? Why aren't the other hands up?


CAMEROTA: I'm sure you probably can't see that, but there was a smattering of half-hearted hands about reinvesting in the company and capital investments. And you heard Gary Cohn there, like, why aren't other hands gone up? Is it possible you're giving corporations too much credit in what they're going to do with these -- all their money?

DUFFY: Well, Barack -- Barack Obama and I are giving corporations credit together, a bipartisan move, because we do think they're reinvesting. And just look at history, Alisyn. Whether it was JFK with tax reform, Ronald Reagan or George Bush, you saw economic growth that happened in America. And you saw that...

CAMEROTA: Hold on, hold on, Congressman. That's not true.

DUFFY: It is true.

CAMEROTA: As you well know, listen, I think the Bushes will tell a different story. It's not true that every time you lower taxes, the economy booms. It's just not true.

Sometimes when you raise taxes, the economy booms, as it did with Clinton. And as you know, George H.W. Bush had to raise taxes, because there were problems from having lower taxes. It doesn't always work the way you're saying.

[07:25:00] DUFFY: Alisyn, I'm going to throw something to your viewers, because they're smart viewers. They've probably heard of things called inversions where American companies buy a small foreign company and then move their headquarters overseas because of taxes. And I hear Democrats talking about what China is eating our lunch in a massive debt. We are losing in a global competition.

How does an American company compete when our company pays 35 percent on tax and an Irish company pay 12 percent in taxes? Their profits are eaten up. They can't reinvest it. And if you think that you can compete and win -- I know it's just you asking me questions -- but if viewers think that you can compete and win when you're paying three times as much in taxes, we're going to lose in America. I want to make us competitive again. This has to be the best home for

capital in the world. We're the smartest, brightest, hardest working people. But if you can't invest capital and keep more of it in America, you're going to go somewhere else. And we've seen that happen.

Let's make sure money comes back and is reinvested here. And I think this is going to be a good thing.

And listen, you made the point well: we're staking our future on this. And I think that history dictates and this economy has dictated that you lower regulation, you let people spend more of their money as opposed to bureaucrats in Washington where I am right now. We do better as a country and families do better. So I think this is going to work.

CAMEROTA: OK. A couple of more questions. Have you read the entire 120-page bill?

DUFFY: So I've read -- I can't say every word. I've read wide swaths of it and summaries on others.

CAMEROTA: Yes, I don't blame you. Listen, I know that this has all happened so fast. I mean, and I know that this is dense stuff. But will you get a chance to read all 120 pages of it?

DUFFY: Listen, it's a small task. Some of it gets complicated. So I've got to go and make sure I understand how this is working. This is why some summaries and conversations are helpful, because tax code is complicated.

But that's an unfair assessment. When you look at, you know, things that happened behind closed doors, if you do look at Obamacare, Nancy Pelosi wrote it. And you had to pass it to find out what's in it.

CAMEROTA: And that's the same thing that's happening, Congressman. It sounds eerily similar. By the way, my producer just old me 520 pages. So that's the same thing. You guys are saying the same thing. You guys are saying -- hold on -- to the American public, "You're really going to like this after we pass it. You don't like it what you've seen so far but let us pass it and then you'll find out exactly what it's going to mean."

DUFFY: So but -- Obamacare, they actually brought the bill to the floor and members saw it as it went to the floor. That's why Nancy Pelosi said we have to pass it so you can find out what's in it. There was a four-day hearing in the House Ways and Means Committee. Four days, all day long over a month ago. The bill has been out there for a long time.

CAMEROTA: I understand, but you still haven't been able to read all of it.

DUFFY: But to say that this hasn't been out there, the American people can't analyze it, if you wanted to read it or your viewers wanted to read the whole text word for word and not big swaths and certain summaries of others, you could do that.

CAMEROTA: Right. But you haven't done that.

DUFFY: Listen. Wait. Alisyn, you said that this bill was done under the cover of darkness. We're talking about the process. The process has been going on for well over a month. You've been -- I watch your show. You've been talking about the different specifics of our bill for over a month. So how could it be behind closed doors?

CAMEROTA: I hear you. I'm saying Democrats say that. Not I. I know what you said. Democrats say they felt cut out.

DUFFY: I watch your show and you've talked about it, and you guys have talked about it for over the month. So you had to have the details of our plan to do that, which you have.

CAMEROTA: I appreciate that plug. But I'm telling you that Democrats like Joe Manchin said that they felt cut out, that they wanted to be a part of it. They felt they could deliver bipartisan things.

But anyway, my point is -- is that you said you haven't even had a chance to read the whole thing so how do you expect Americans to have done that?

DUFFY: So hold on a second. There's -- there's parts of the bill that I can read and understand. Listen, tax code is very, very complicated. As we're dealing with international companies. And so on some of those more complicated portions, I read some summaries so I make sure I understand it.

And unless you're a tax expert, some of the stuff gets to be very, very deep. And that's why I've chosen to deal with the legislation the way I have. But the point is, this is different than the thousands of paid bills that come out on that floor and voted on day one. And it was done through the leaders, Nancy Pelosi, as opposed to ours which has gone to regular orders.

So anyway, I think the process has been open. And we should be able to get Joe Manchin. That would be great to get Joe Manchin. But sometimes there's a resist movement going on in America. People, you know, don't want to give Donald Trump a win even though it will help the American people. And so a lot of Democrats, because their base will go after them if they work with Republicans, I'm seeing it all the time right now, they don't want to get involved in the conversation.

CAMEROTA: I hear you. But I don't think that that was -- that wasn't Joe Manchin's position.

DUFFY: I agree with you.

CAMEROTA: I understand, Congressman. We always appreciate you coming on and sharing your perspective and your position. It's really helpful to get it. Congressman Sean Duffy, thank you very much.

DUFFY: Thanks, Alisyn. Have a good morning. CAMEROTA: You too. So we fact check in real-time here.