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Tax Plan Approved; Shutdown Looms; U.N. Showdown Over Jerusalem; Shots Fired At DMZ. Aired 5:30-6a ET

Aired December 21, 2017 - 05:30   ET


[05:30:00] CHRISTINE ROMANS, CNN ANCHOR: This is what victory looks like. Republicans celebrate passage of a historic tax overhaul. The party might be short if the GOP can't approve a spending plan to keep the government open by tomorrow night.


DONALD TRUMP, PRESIDENT OF THE UNITED STATES: We're watching those votes. Let them vote against us, we'll save a lot. We don't care.


DAVE BRIGGS, CNN ANCHOR: President Trump with a veiled threat to world leaders as the U.N. prepares for a showdown vote over Jerusalem.

ROMANS: And how do you pick a winner in a tied election? Wait until you hear how Virginia will determine balance of power in the bellwether state.

Welcome back to EARLY START. I'm Christine Romans.

BRIGGS: And, I'm Dave Briggs. Thirty minutes past the hour.

You know, Democrats have been celebrating, too. They think they have the political talking point on this tax bill. Not so sure about that. We'll discuss it straight ahead.

But we start with the major victory for the Republicans delivering on tax cuts, killing the Obamacare individual mandate, and opening up drilling in ANWR, all in one move. The GOP tax bill now awaits the president's signature.

But in touting the bill as a huge tax cut, the president reveals a hidden agenda all along.


TRUMP: The individual mandate is being repealed. So in this bill not only do we have massive tax cuts and tax reform, we have essentially repealed Obamacare.

We didn't want to bring it up. I told people specifically, be quiet with the fake news media because I don't want them talking too much about it because I didn't know how people would -- but now that it's approved I can say the individual mandate has been repealed. (END VIDEO CLIP)

ROMANS: It is important to note Obamacare has not been repealed, the individual mandate has been repealed. A broader effort to kill Obamacare failed earlier this year.

Now it is true the tax bill may destabilize Obamacare by reducing the incentive for young, healthy people to buy insurance.

The Congressional Budget Office says that by repealing just the individual mandate will likely raise premiums to help cover older, sicker people. But it will also save the government money as people drop out of the subsidized Obamacare marketplaces.

BRIGGS: Now, by admitting the tax bill was a vehicle for hurting Obamacare, the president may have also handed Democrats a powerful talking point for 2018.

None of that got in the way of the Republicans' huge celebration yesterday.


REP. PAUL RYAN (R-WI), SPEAKER OF THE HOUSE: Something this profound could not have been done without exquisite presidential leadership.

SEN. MITCH MCCONNELL (R-KY), SENATE MAJORITY LEADER: This has been a year of extraordinary accomplishment for the Trump administration.

SEN. ORRIN HATCH (R), UTAH: And we're going to make this the greatest presidency that we've seen not only in generations but maybe, ever.

MIKE PENCE, VICE PRESIDENT OF THE UNITED STATES: President Donald Trump delivered a great victory for the American people.

TRUMP: We're all friends. I mean, I look at these people -- it's like we're warriors together.


ROMANS: Now the focus shifts to funding the government. Money for that runs out tomorrow.

Let's bring in "CNN POLITICS" reporter Tal Kopan, live for us in Washington. Good morning.

BRIGGS: Good morning.

ROMANS: I guess we've got to play -- let's play the Pence. Let's play the --

BRIGGS: Mike Pence.

ROMANS: The vice president -- just a lovefest yesterday -- listen.

(BEGIN VIDEO CLIP) PENCE: I'm deeply humbled as your vice president to be able to be here. Because of your leadership, Mr. President, and because of the strong support of the leadership in the Congress of the United States, you're delivering on that middle-class miracle. Because of your determination, because of your leadership, the forgotten men and women of America are forgotten no more and we are making America great again.


BRIGGS: That's just a small sampling. We only have 30 more minutes in the show or we'd play the whole thing.

ROMANS: This was an example of exquisite leadership, as the speaker of the house said yesterday. This is the way to get to Donald Trump's heart.

My question is with this synergy between these Republicans and their president will they get more done, like funding the government and moving into more legislative ambitions next year?

TAL KOPAN, REPORTER, CNN POLITICS: I guess we'll see, Christine. I mean, that body language in that clip is -- there's a -- there's a lot going on in that -- in that clip you guys just played.

BRIGGS: There's a lot going on.

KOPAN: It reminded me of "THE APPRENTICE," that's for sure.

You know, it's really hard to say what Republicans are going to be able to get done next year, you know. Certainly, getting tax reform done helps a great deal.

As far as we know, Paul Ryan was almost singularly obsessed with this over the past few months. I mean, this was his baby, his masterpiece -- whatever you want to call it.

ROMANS: But the fact -- remember, this is why he got into politics, right.


ROMANS: I mean --


ROMANS: -- for the past 25 years.

KOPAN: Right. So, you know -- so this does -- it's over the hurdle in one sense. But keep in mind, part of the -- part of the only reason this made it across the finish line is because Republicans had so much time accomplishing -- or so much difficulty accomplishing anything else that they thought well, we have to get this done by the end of the year.

There are a lot of lawmakers who don't like pieces of this bill still but decided to sort of vote for the whole overall package in the interest of at least doing something that they think is better than nothing.

And so, next year -- you know, the relationship with Democrats aren't any better. There are very few things you can do with this 50-vote procedural mechanism that Republicans have been using. You know, there are a lot of complicating factors.

[05:35:10] But there's no doubt that part of why -- you mentioned government funding -- part of why Republicans just want to wrap up and get out of town is they want to bask in this moment. They want to go talk to their constituents, having a victory under their belt. And it could give them some confidence going into the new year.

ROMANS: But do you guys think -- do you guys know -- do you think that now they own the economy because they have said this is going to really explode -- this is going to be rocket fuel on the economy --

BRIGGS: A very healthy economy.

ROMANS: Yes, an already healthy economy. But they also now really do own Obamacare. They own health care.

I mean, now, don't you have to --

BRIGGS: Yes, but --

ROMANS: -- go out there with legislative fixes? You can't just kill the individual mandate and then let it --

BRIGGS: True, but per the economy point, 2016, Tal, one of the big problems for Democrats is they had no economic message. Going into 2018, will they have any economic message?

KOPAN: I think that you're going to see fine-tuning of that, you know, over the next several months as they sort of test out those messages. I mean, they should if they want to win. They're going to have to have some message to voters as to why to vote for them as opposed to just sort of running against something.

It's difficult to win an election as just being not the other guy --

BRIGGS: Right.

KOPAN: -- so they're going to have to test these out.

I think a lot of this is going to come down to what voters are feeling at the end of the day. Tax cuts are very esoteric. Corporations may be loving this. They do a lot more financial analysis than the average American does on their own finances, I think, on a regular basis.

Are Americans going to notice a few more dollars in their paycheck every period?

ROMANS: I think -- yes. I think it's going to be something like $18 a paycheck or something for the people who make between $46,000 and $86,000.

BRIGGS: A week.

ROMANS: That middle -- that middle -- yes, yes.

BRIGGS: And that's $1,000 a year.

ROMANS: But, you know -- and there were -- and there were these P.R. moves by these companies overnight -- Comcast, AT&T, Boeing, and others saying we're going to -- we're going to spend that money. We're going to raise our minimum wage, or we're going to give people $1,000 bonuses.

That doesn't look to be replicated across corporate America; it's five or six instances, but that helps the sales job.

KOPAN: Absolutely, that looks good. It gives them a talking point. You already see Republicans using that to push back on everyone who said that it wasn't going to happen. That corporations were going to keep the profits.

This is something that's going to have to play out, you know. If -- as you said, Republicans, to a certain extent, already owned the economy and the impact on people's lives because they control all three levers in Washington. But now, they really do because now they've actually changed something.

And so, you know, the way voters feel in November is going to be dispositive on how they vote. And so for better or worse, Republicans are going to have to sell this thing and hope that it has the effects that they sort of aspire it to.

BRIGGS: Of course, tomorrow night, government funding runs out. The gleaming dome behind you -- will the lights be out come tomorrow night or on?

KOPAN: I guess we're going to have to find out, to a certain extent.

You know, I've been on Capitol Hill almost every day for the past month and you talk to lawmakers, you talk to fellow reporters, you talk to staff. No one really knows how we get out of this.

And part of the problem here is that just like a lot of legislation, as you start to say can we do this, can we do that, you start to lose pieces of the coalition. And so, the easiest option would be to just buy yourself three or four weeks.

But the problem is there's a bunch of defense hawks who are very concerned about the military continuing to be strung along with these temporary budgets and so, you may not even have the support for that.

Right now, we're sitting at two days until funding runs out. The Senate takes a while, procedurally, to get through this. Democrats are not inclined to help Republicans if they look like they're flailing to get this done. So there's a lot of complicating factors. Everyone wants to go home. Like I said, they want to go talk to their constituents. You can smell the punt in the air but no one really knows how we're going to get there.

BRIGGS: You can smell the punt in the air. Very good.

ROMANS: She's got a way with words. All right, Tal, thank you so much.

KOPAN: Thank you.

BRIGGS: All right.

The top Democrat on the Senate Intelligence Committee says firing Special Counsel Robert Mueller would cross a red line. That warning to President Trump from Mark Warner of Virginia. He's calling on Congress to respond with significant consequences if the president does try to neutralize the special counsel.


SEN. MARK WARNER (D), VIRGINIA: Any attempt by this president to remove Special Counsel Mueller from his position or shut down the investigation would be a gross abuse of power and a flagrant violation of Executive Branch responsibilities and authorities.


ROMANS: White House counsel Ty Cobb telling CNN no consideration is being given to firing Mueller.

He adds, "If the media is going to continue to ask for responses for every absurd and baseless rumor, attention-seeking partisans will continue to spread them."

Mueller is facing a growing number of Republicans who claim there is an anti-Trump bias in his Russia investigation.

[05:40:04] BRIGGS: Speaking of Virginia, another twist in the Virginia House race leaving the balance of power in limbo. Now it basically comes down to the luck of the draw.

A recount had given Democrat Shelly Simonds the victory by one vote over Republican David Yancey, but a three-judge panel has now declared one more valid vote for Yancey. So now, the final tally is a tie with 11,608 votes each.

ROMANS: Virginia law says in the event of a tie the election board will determine the winner by lot. The Board of Elections process involves printing the candidate's names onto equal-sized sheets of paper and then putting them into a container. The first name drawn will be declared the winner, and the loser could then petition for another recount.

A victory for the Democrat would split control of the House of Delegates. A win for the Republican would mean the GOP maintains the majority.

BRIGGS: Just remember this when someone tells you your vote doesn't matter next time around.

ROMANS: It does.

BRIGGS: It does.

Ahead, shots fired in the DMZ. South Korea opens fire after soldiers from the North pursue a defector. We're live in Seoul.


[05:45:30] ROMANS: This morning, the U.N. General Assembly votes on a resolution rejecting President Trump's decision to recognize Jerusalem as the capital of Israel, and the administration says it will remember which countries oppose the U.S. position.

America's U.N. Ambassador Nikki Haley writing her fellow ambassadors to say she and the president will be carefully monitoring their votes and taking them personally.

BRIGGS: That follows this tweet from Haley on Tuesday. "When we make a decision at the will of the American people about where to locate our embassy we don't expect those we've helped to target us. The U.S. will be taking names."

President Trump pushing it a step further, warning financial assistance to nations could be cut off if they vote against the U.S. position.


TRUMP: We're watching those votes. Let them vote against us, we'll save a lot. We don't care.

But this isn't like it used to be where they could vote against you and then you pay them hundreds of millions of dollars and nobody knows what they're doing. And we're not going to be taken advantage of any longer.


BRIGGS: Boy, will this be a fascinating vote today.

Let's go live to Jerusalem and bring in CNN's Oren Liebermann. Oren, good morning to you.

Any hint as to how this vote might go?

OREN LIEBERMANN, CNN JERUSALEM CORRESPONDENT: Well, the expectation is very much that this resolution will pass with an overwhelming majority. That is, despite President Donald Trump's threat about foreign assistance and Nikki Haley saying the U.S. will be taking names. And that's because there's been a similar vote in recent days at the 183-member United Nations General Assembly. Just a couple of days ago they voted on Palestinian self-determination and that vote passed 176 in favor and only seven against or abstaining. And this vote is expected to go much the same way.

And with even the moderate Arab states who have a pretty good relationship with President Trump, voting in favor of this resolution to nullify President Trump's recognition of Jerusalem as the capital of Israel.

Now, it is a non-binding resolution. That means even if it passes unanimously it doesn't actually change U.S. foreign policy. It simply shows that the U.S. very much stands alone on this, especially on the position of Jerusalem, which is only supposed to be decided in final status negotiations. Of course, Israel's standing with the U.S. there.

So will President Trump's threat change anything and will he carry through on that threat? Well, we're not going to go as far as to make a prediction on that but it will certainly be interesting to see what follows and what statements follow this vote.

But again, it's supposed to pass with an overwhelming majority. It will be very interesting to watch who decides to abstain, and if any more countries decide to abstain in light of President Trump's threats there.

BRIGGS: Yes, it will be interesting to watch the president's Twitter account as well, won't it?

Oren Liebermann live for us, thanks.

Moments ago, even before the vote, Israeli Prime Minister Benjamin Netanyahu said Israel flatly rejects the results of today's vote, calling the U.N. a "house of lies."

ROMANS: Gunfire along the DMZ. It started when a North Korean soldier fled across the demilitarized zone toward the South. Later, when North Korean soldiers appeared in the DMZ searching for the defector, the South Korean military says its troops opened fire as a warning to the North Koreans.

CNN international correspondent Paula Hancocks joins us live from Seoul with more.

This might be one of the most tense places in the world. When you hear there's gunfire at the DMZ it is concerning.


Now, it wasn't direct military confrontation but the fact that you have this gunfire even happening is a cause -- a concern when it is a time of great tension here on the Korean Peninsula. So what we know about this defection so far. The military here is telling us that this was a young defector. A young, low-ranking soldier, his late teens, maybe early twenties.

He was carrying a firearm as he came across the border but there were no shots fired at that point. An hour and a half later the South Korean military fired 20 warning shots as they saw North Korean soldiers approaching the demarcation line clearly looking for that soldier.

And then shortly afterwards, they say that they heard shots from North Korea but they didn't land in South Korea. So obviously, a very tense time.

But it's also very interesting because just last month there was another North Korean soldier who defected in a very dramatic fashion across the DMZ in a hail of bullets. At multiple times he was hit by his former comrades, critically injured, but did survive.

So the question is why are there so many North Korean soldiers taking this very deadly risk? It is a very dangerous route -- a route that's very rarely taken in the past as it is so heavily militarized on both sides -- North and South Korean soldiers -- and it is very heavily mined as well. So the question is why is this increasing?

[05:50:05] ROMANS: All right, Paula. Thank you so much for that in Seoul for us this morning.

BRIGGS: All right.

Breaking overnight, more than a dozen people hurt in Australia when a car plowed into pedestrians outside of Melbourne's iconic Flinders Street Railway Station. Two adults and a young child with a head injury have been taken to the hospital in serious condition.

Police have the driver and another person under arrest. They say the action was deliberate but not terror-related.

ROMANS: And an update on another breaking story this morning.

Officials in the Philippines say about 200 people have been rescued after a ferry capsized off the east coast of Luzon Island about 20 miles east of Manila. That's a significant portion of the 251 passengers aboard. They also say four bodies have, so far, been recovered.

The Philippine Coast Guard coordinated with the military asking all vessels in the area to help in this rescue.

All right, the tax bill has passed. Wall Street -- now why wouldn't Wall Street just go crazy and close higher? I know why.

BRIGGS: Do you?

ROMANS: It closed lower on the tax bill and it's a funny little reason. I'll tell you why. (COMMERCIAL BREAK)

[05:55:32] BRIGGS: Carolina Panthers owner Jerry Richardson has serious allegations of sexual misconduct against him but yesterday, his star Q.B. came to his defense.

ROMANS: Andy Scholes has the story in this morning's "Bleacher Report." Hey, Andy.


You know, Panthers' owner Jerry Richardson, in a statement released on Sunday, said he was going to be selling the team after this season. This after "Sports Illustrated" detailed accusations of sexual and racial misconduct in the workplace.

But yesterday, his quarterback Cam Newton said Richardson should be considered innocent until proven guilty.


CAM NEWTON, QUARTERBACK, CAROLINA PANTHERS: Everything that I've heard were allegations and nothing was actually proven, you know. It's just another person's word versus the other person's word.

But needless to say, man, I still think extremely highly of Mr. Richardson and I take sexual assault extremely serious. You know, just having a lot of allegations thrown at a person -- you know, I don't think that's fair.


SCHOLES: The NFL has opened up an investigation into the allegations against Richardson.

All right. Palm Beach Gardens police announcing yesterday that Venus Williams will not face criminal charges after being involved in a fatal car accident back in June. Police say Venus was not at fault because a car cut her off causing her stop in the intersection.

Seventy-eight-year-old Jerome Barson died in the crash. His estate has filed a wrongful death lawsuit against Williams.

All right. Houston Rockets' 14-game winning streak coming to an end last night at the hands of Lonzo Ball and the Lakers.

But it was L.A.'s other rookie dominating this game. Kyle Kuzma going all for a career-high 38 points, hitting seven three's in this one.

James Harden did score 51 in the 122-116 loss. Chris Paul also left this game late with a thigh injury. The first game of the season that the Rockets have lost with both Harden and Paul on the court.

And in other ball news, guys, LaVar Ball telling ESPN that he's going to create a new league for young basketball players that don't want to go to college and be one and done, so they can all get together an play as opposed to having to go overseas like his other two sons are doing. It will be interesting to see if that league ever pans out.

BRIGGS: All right. We'll have Chris Cuomo get him on the line and set up an interview --

SCHOLES: Yes, right.

BRIGGS: -- to preview that league.

Thank you, my friend.

SCHOLES: All right.

ROMANS: All right, 57 minutes past the hour.

Let's get a check on "CNN Money Stream." It is that time of the morning.

Global stock markets today lower following Wall Street. The Nasdaq composite closed flat after some big-name tech stocks fell.

OK, so there's an old saying in markets. Buy on the rumor, sell on the news.

Hopes for tax reform had rocketed the stock market higher. The Dow and the S&P 500 then closed slightly lower when it really happened after Congress approved corporate tax cuts.

With six trading days left the Dow, alone, is up 25 percent this year. It has hit milestone after milestone, now fewer than 300 points from its next big round number, 25,000.

The tax bill was supposed to put tax preparers out of business, remember, but they're working overtime right now.

Some provisions start January one and there are a few things you could do right now to lower your tax bill for 2018, especially if you live in a high-tax state like New York, New Jersey, California, Illinois.

Try prepaying your property taxes. Next year, the deduction is capped at 10 grand so if you can, pay now to get 2017's better tax break. It's different in every single municipality so you're going to have to do some homework here and you don't have much time to do it.

Also, deferring the income you can for 2018 for lower tax rates. Paying expenses that will no longer be tax-free -- those miscellaneous business expenses. And, make charitable donations right now. If your tax rate falls, your deduction will be less valuable.

But talk to an accountant and do your homework.

BRIGGS: So, no postcards?

ROMANS: No postcards.

Thanks for joining us. I'm Christine Romans.

BRIGGS: And I'm Dave Briggs. "NEW DAY" starts right now. We'll see you tomorrow.


TRUMP: It's always a lot of fun when you win.

SEN. CHUCK SCHUMER (D-NY), SENATE MINORITY LEADER: There are only two places where America's popping champagne, the White House and the corporate boardrooms.

HATCH: You're one heck of a leader. This bill could not have passed without you.

TRUMP: The individual mandate is being repealed. That means Obamacare is being repealed.

REP. NANCY PELOSI (D-CA), HOUSE MINORITY LEADER: It isn't up to us to keep the government open. It's up to them. They have the votes.

UNIDENTIFIED MALE: I don't think anybody is advocating for a shutdown right now. We think that Congress will do the right thing.

WARNER: To remove Special Counsel Mueller would be a gross abuse of power.

REP. JIM JORDAN (R), OHIO: Most of Mueller's team is anti-Trump. What concerns me is the intent to carry out a plan to disrupt the elections.

UNIDENTIFIED MALE: The willingness to just torch the whole FBI building to advance this narrative is very troubling.