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Steve Bannon Says Trump Tower Meeting was Treasonous and Unpatriotic; Trump Taunts Kim Jong-Un on Nuclear Button Size; White House Officials Talk Budget with Top Lawmakers; Aired 9-9:30a ET

Aired January 3, 2018 - 09:00   ET


[09:00:13] POPPY HARLOW, CNN ANCHOR: Good morning, everyone. I'm Poppy Harlow.

JOHN BERMAN, CNN ANCHOR: And I'm John Berman. This morning one question haunting the White House. Who is going to tell the president he doesn't have an actual button, not to launch a nuclear war at least. That is one question. The more important one might be about the value of bragging about buttons, button size and button performance when discussing nuclear war.

HARLOW: That's a good point. And it's all because of this. The president wrote, "Someone should tell North Korean dictator Kim Jong- un," that Trump also has a, quote, "nuclear button," and a, quote -- and, quote, "It is much bigger and more powerful than his, and my button works."

Seriously, the words of the president. But just shaping up to be a big morning because one of the men closest to the president, his former chief strategist, calls out that infamous Trump Tower meeting with the president's son, Don Junior, and the Russians, calling it treasonous and unpatriotic.

This is according to the "Guardian." They got their hands on the new Steve Bannon book. It also says, quote, "Even if you thought this was not treasonous or unpatriotic or bad, expletive, "and I happen to think that it is all of that, you should have called the FBI immediately."

Our Joe Johns is at the White House with all of it.

Good morning, Joe.

JOE JOHNS, CNN SENIOR WASHINGTON CORRESPONDENT: Good morning, Poppy. One tweet from the president this morning on Iran, a theme he handled yesterday. Yesterday very busy, of course. Two tweets on North Korea, a total of 16 tweets on a variety of topics. The president going after, among other things, the Palestinians. And that's something we want to focus on right now.

The president threatened to withdraw funding from the Palestinians if they did not return to the negotiating table, the peace talk table indicating, in his view, "We give hundreds of millions of dollars to the Palestinians," and ending up with a question, "Why should we continue to make these payments?" The Palestinians, of course, responding very curtly indicating they

cannot be blackmailed. That's what they said.

Today the president is going to have a lot to talk about as he sits down to lunch with the vice president, his secretary of State, his secretary of Defense. Now all of these issues on the table and we'll be watching the president's Twitter feed.

Back to you.

BERMAN: Indeed we will. Joe Johns at the White House. A busy and perhaps contentious morning there. Thank you, Joe.

Meanwhile a contentious meeting, a crucial meeting, we should say, on Capitol Hill with a little more than two weeks until a possible government shutdown. Some key White House officials will sit down with bipartisan congressional leaders to discuss things.

HARLOW: Suzanne Malveaux is on the Hill for us. Good morning.

SUZANNE MALVEAUX, CNN NATIONAL CORRESPONDENT: Good morning. Well, that is an urgent deadline. They are definitely trying to meet January 19th to fund the government. The president dispatching two top aides this after, the Budget director Mick Mulvaney, as well as Marc Short, his legislative aide, to sit down with Democratic and Republican leadership, Nancy Pelosi, Chuck Schumer, Paul Ryan and Mitch McConnell, of course.

On the Republican side and the president's emphasis it is on making this deal behind the scenes to raise the budget cap, the spending cap for domestic and military programs. But if you talk to Democrats it's something completely different. What they are hoping on doing is leveraging what they have, and they do have some leverage here on the Senate side, they need that super majority, they need those Democrats to get onboard to tying that with the fate of the Dreamers.

What they want is some sort of protection, when the DACA legislation expires. That's in March. And they would like to see that tied to the budget. President Trump so far said there has to be a border wall to accompany that. Democrats and Republicans, various caucuses and coalitions are looking for some sort of compromise, some security measures, national security measures in addition to working with those Dreamers to make sure they're not deported as part of this budget deal, that, John, Poppy, should let -- you know, that aides to these lawmakers say they are willing to kick the can down the road once again, and perhaps approve a short-term stop gap measure to fund the government beyond that January 19th deadline while they work out this negotiation.

BERMAN: You know, Suzanne, a season of change in the Senate today. Two new senators will be sworn in.

MALVEAUX: That's right. This is going to happen at noon. Vice President Mike Pence will be part of the swearing in. The first one, as we know, very historic, Alabama, Doug Jones who won against Roy Moore, a very controversial Republican figure, really changing the face and also the makeup of the Senate. A very slim majority of Republicans, 51-49 now.

Solidly on the Democratic side in terms of voting on health care, abortion, gay rights, gun control, those type of things. So don't really expect there's going to be very much changed there, but certainly making it hard for Republicans to push forward their legislation.

[09:05:03] We're told that vice president -- former Vice President Joe Biden will be there. He was instrumental in really trying to get Doug Jones over the finish line, and he did.

And then also Lieutenant Governor Tina Smith replacing Minnesota Senator Al Franken over the controversy over the alleged groping incidence, really shedding some light and also portraying a very strong message against sexual harassment in Congress.

BERMAN: Suzanne Malveaux for us on Capitol Hill. Suzanne, thank you so much.

We are following all sorts of breaking news and headlines, including what Poppy mentioned at the top of the show, Steve Bannon speaking to author Michael Wolf. Michael Wolf has got a new book coming out. And they were talking about that meeting at Trump Tower in 2016 in the spring there between Donald Trump, Jr., and Russians, promising dirt on Hillary Clinton.


BERMAN: Steve Bannon said this, "Even if you thought that this was not treasonous or unpatriotic or bad," blank, except he didn't say blank, and Bannon said, "I happen to think it's all of that, you should have called the FBI immediately."

HARLOW: That is one of the remarkable quotes, there are many more.


HARLOW: That we've just learned about in the past few moments.

With us now to discuss, Errol Louis, our political commentator, Amie Parnes, our political analyst, and Caitlin Huey-Burns, a national political reporter for RealClearPolitics.

Nice to have you all here.

Errol, to you, he also went on to say -- aside from calling that meeting treasonous and unpatriotic, they're going to crack Don Junior like an egg on national television, and then he talked about just the bad judgment of the campaign to hold this meeting with three senior guys, Manafort, Kushner, Don Junior in Trump Tower with no lawyers.

ERROL LOUIS, CNN POLITICAL COMMENTATOR: Well, it's an extraordinary statement coming from Steve Bannon. I would have to say, though, Steve Bannon's status as a political analyst and his insight has been considerably tarnished after the debacle in Alabama, so with that important caveat aside, it's really important kind of information coming from inside the Trump camp.

At the time he was not peripheral. He was not a coffee boy. He was supposed to be on top of all of this stuff, and certainly was aware of it. And so with the internecine fighting that we know was always going on between the Kushners and Bannon factions, Reince Priebus sort of circling around, if that now bursts into view in this sense, the Mueller investigation, the congressional committees, they cannot overlook that. They cannot unhear this once it's been said.

BERMAN: One note on the timing. Steve Bannon didn't come onto the campaign as a campaign chair until August. This meeting happened earlier in the spring, you know, after Corey Lewandowski, around Paul Manafort during that whole period right there. What Bannon may have learned about it ultimately past that, we don't know.

And I apologize to all of you. This just broke as we were coming on air. I was looking at all of your faces as we're reading this and you had the same reaction we did. Steve Bannon said this, Amie, this undercuts in some ways the arguments that we heard from some Republican loyalist to the president, oh that there's nothing there. Steve Bannon is saying that this meeting was treasonous and unpatriotic.

At a minimum then, isn't the type of thing worthy of investigation?

AMIE PARNES, CNN POLITICAL ANALYST: Well, yes, and I think a lot of people are thinking that. I mean, you have Papadopoulos, you have all these things happening, you have further indictments coming out, I think, from the Mueller investigation. So I think all of this is like another big drop in the water, and I think it's very meaningful, I think, that this is coming from someone like Steve Bannon.

I do think that, you know, he does have a point of view on this. He does know what's happening behind the scenes, and so he -- this is a meaningful moment.

HARLOW: Let me read you some more and this is my first read of half of this as well. Bannon also said to Michael Wolf for this new book -- he talked about money laundering, and he said, "You realize where this is going. This is all about money laundering." And then he goes on to say, "It goes through the Deutsch Bank and the Kushner blank. The Kushner bank is greasy. They're going to go right through that. They're going to roll these two guys up and say play me or trade me."

What -- why is he saying this and why is saying it now if he's still such a Trump loyalist?

PARNES: I'm not convinced that he is necessarily a Trump loyalist when it comes to the family. Remember during the Alabama Senate race when he was campaigning for Roy Moore and he took a big dig at Ivanka Trump saying there was a special place for people who --

HARLOW: A little different, though. PARNES: This is very different but, you know, the investigations are

still going on even if Steve Bannon wasn't on the campaign at that time he's certainly going to raise a lot of questions that Democrats and Republicans on the committees will want to know before they wrap this up.

BERMAN: And again, one question is, will Steve Bannon get his phone calls returned from the president now? Who knows?

PARNES: He still talks to him, though, about eight times since he left.

HARLOW: That was before 8:50 this morning.

BERMAN: That was before this.


LEWIS: I'd love to hear the next conversation.

BERMAN: Yes. Yes. This one is unusual. All right, guys, let's move on to the other sort of earth-shattering, shaking news, which is what the president is saying about nuclear war, bragging about button size and button performance.

[09:10:08] James Clapper, former director of National Intelligence, thinks that the kind of statements the president is making are dangerous. Listen.


JAMES CLAPPER, FORMER DIRECTOR OF NATIONAL INTELLIGENCE: An untold death and destruction here, and to me it's very disturbing. No one in the White House knows what is Kim Jong-un's ignition point, where one of these tweets is going to set him off and he's going to hit that button.


BERMAN: So, Errol, that's the question. Is this a serious cause for concern? Does this make America less safe?

LEWIS: I would have to say yes, not simply on the authority, somebody like James Clapper which is considerable, but just everything we know about this. We know that the Chinese contrary to what was widely touted by the president, does not have full control over North Korea. It is not like simply their client state.

What we know as well is that this dictator in North Korea may have learned from the examples of Saddam Hussein and of Muammar Gadhafi. They gave up weapons of mass destruction, they ended up captured and executed. He has been boxed in, this dictator in North Korea. He is only a few miles from the South Korean border. He can wreck devastation there. He can reach parts of the United States with missiles. This is simply not a time for the kind of crude taunts, the schoolyard

foolishness that's coming out of the White House. Everyone should be very, very concerned about it.

HARLOW: So on the flipside of that one person not concerned about it, who does not have the credentials, I should note, at the frontier of James Clapper, is Michael Flynn, Jr., the son of the former and disgraced and now, you know, pled guilty to lying to the FBI, National Security adviser Michael Flynn. But here's what he wrote on Twitter overnight. "This is why Trump was elected. A no BS leader, not afraid to stand up for his country."

So, Amie, to you, I mean, any resonance there at least among the most ardent of the president's supporters?

PARNES: I mean, a lot of people think that he is speaking truth to power and this is what Trump does. But I have been hearing from a lot of Republicans, you know, when he says -- anytime he says something like rocket man or fire and the fury, it really gets them angry. They're really upset. They want to reign him in when he does this. They feel like it's not good for the country. I mean, these are conservatives who are really upset about it and they don't think that it's good for the nation or the world.

BERMAN: And this is what you report, even among Trump supporters, and you've spoken to them back in Michigan.


BERMAN: Even though they like the president, they like what he does, what he stands for, they would rather he didn't say this kind of stuff on Twitter?

HARLOW: To a person. To a person, yes.

BERMAN: And Caitlin, one of the discussions that this has brought up yet again is the issue of the president's mental stability. I am saying this because other people are saying it. Peter Wehner who worked in the Bush White House 41 and 43 and now writes for "The New York Times," he wrote this, "Mr. Trump's recent Twitter storm, interviews are more evidence for watching an American president psychologically, emotionally and cognitively decompose. It's rather alarming to watch and the president is not well."

So you're hearing that from the like of Peter Wehner, a fierce Trump critic. Does this resonate anywhere beyond that? Anywhere beyond the people who are not fierce Trump critics?

CAITLIN HUEY-BURNS, NATIONAL POLITICS REPORTER, REALCLEARPOLITICS: Well, I think it resonates, you know, around different community centers, right? National security community, Republicans on Capitol Hill who are dealing with this, especially since, you know, as the situation escalates, we don't have a clear-cut plan from Donald Trump. Right?

We have seen him talk about fire and fury, we've seen him stand up in front of the U.N. and talk about rocket man, then we've seen statements from the White House which are more -- much more tempered, talking about diplomatic routes. So whether, you know, this is a good cop-bad cop kind of situation, we've talked about before, whether this is intentionally trying to not set a clear path and motion is also a question we've talked about before. But I do think this resonates beyond the regular sorts, beyond the critics, because it is a situation that is becoming increasingly -- it's escalating.

HARLOW: Yes, certainly, now the talks between the two countries, it comes right in the middle of that.

Thank you all very much.

BERMAN: Thanks for playing, guys.

HARLOW: We appreciate it. Now you can go and read that article, and see what we're talking about.

All right. The hotline is open after a year -- really more -- of escalating tension. North Korea and South Korea established contact for 20 minutes over the phone. We're going to have the latest on that.

BERMAN: Plus fighting back. The research firm behind the Russian dossier claims what it calls mendacious conspiracy theories, and calls for the full release of its testimony to Congress.

And millions facing a monster storm moving up the East Coast. They may look pretty, but it's not fun, trust me.



JOHN BERMAN, CNN ANCHOR: Overnight, a long dormant hotline between North and South Korea sprung to life and there's hopes for maybe a thaw in relations.

POPPY HARLOW, CNN ANCHOR: Pyongyang's interest in the upcoming winter games in just a few weeks appears to be what prompted not one, but two direct communications with the South overnight.

Our Alexandra Field has the story from Beijing. Look, this is the first time in a few years at least that this communication line has been open. What was gained from that?

ALEXANDRA FIELD, CNN INTERNATIONAL CORRESPONDENT: Hey, Poppy and John. Look, it certainly sounds like a big deal because it has been two years that this phone line has been dormant. And South Korean officials say that they have been calling North Korea every day, twice a day for two years to no answer.

Finally, today the phone rang. So, what do they make of this? Well, it depends on what North Korea does next, but it turns out that Kim Jong-un himself gave the order to make the phone call and right on schedule, South Korea got a phone call from North Korea. There was a 20-minute conversation between the two sides.

Again, the first time this has happened in two years. We are told that the two sides discussed technical issues concerning the communication itself, and then there was a follow-up call later in the day, and North Korea also initiated that call.

The follow-up call was essentially about saying that business for the day had been done. So, not much there. South Korean officials say that there was no talk of future talks between the two sides or of North Korea's participation in the winter Olympics, which will be hosted by South Korea next month.

But that is the thought that did precipitate this call, at least. We know that on New Year's Day, Kim Jong-un made his New Year's Day speech, announced that he wanted a North Korean delegation to go to these games.

[09:20:09] The South Korean side has been extremely receptive to that idea. The South Korean president sees this as an opportunity to promote peace on the Peninsula, and in fact, South Korea had reached out saying that they should set a date for high-level discussions on this issue for January 9th.

North Korea has not yet responded to that idea. But look, Poppy, John, they did take a first step today in at least initiating those two phone calls to South Korea. You just can't count on North Korea at this point to continue to follow-up. We will see.

BERMAN: It's not nothing, we just don't know how much it is just yet. Alexandra Field for us. Thanks so much.

Also, this morning, Palestinian officials firing back after President Trump threatened to cut aid. This is what the Palestinians are saying, "Jerusalem is not for sale. We will not be blackmailed." A Palestinian negotiator went even further saying that the president has disqualified himself as a go between, between Palestinians and Israelis.

HARLOW: So, Israel is responding and they say that President Trump's statement puts the Palestinians on notice. Oren Liebermann joins us in Jerusalem. Look, it sounds like it just puts the Palestinians -- takes them off the bargaining table completely?

OREN LIEBERMANN, CNN CORRESPONDENT: In a sense this is a continuation of the process we've seen over the last few after weeks after President Donald Trump recognized Jerusalem as the capital of Israel, that in a sense was one nail in the coffin. The Palestinians said, look, the U.S. is no longer an honest broker in Israeli-Palestinian negotiations and we reject anything the U.S. puts on the table in terms of a peace process.

Remember Trump insists he's still working on some sort of process, but it's mysterious we have not learned anything about it. As a continuation of that, the Palestinian response to Trump's threat to cut off aid was fury and anger coming from Palestinian leaders who say this is one more step of Trump moving towards the Israeli position and moving it away from Palestinians after there were quite a number of meetings before a few weeks ago.

So again, that sentiment that the Palestinians are being held hostage, that's a sentiment we've heard from Palestinian leaders. One leader said it's not the Palestinians who will be most affected, it will be the Israelis if the U.S. cuts aid. Here's what he had to say.


MUSTAFA BARGHOUTI, FOUNDER, PALESTINIAN NATIONAL INITIATIVE: President Trump is threatening to cut the aid, he can cut the aid. By the way, most of the American aid to Palestinians is benefiting the Israelis because it is --


BARGHOUTI: Because it's mainly funding security coordination between Palestinians and the Israelis. If he wants to take it away, let him take it away.


LIEBERMANN: There is not a position that is commonly held among Palestinian leaders because of how much U.S. aid comes here. According to U.S. Aid, it's $616 million as of 2016, and that doesn't include some $370 million that goes to the U.N. agency in charge of helping Palestinian refugees.

That touches every aspect of Palestinian society. It would affect nearly every aspect as well. John and Poppy, perhaps no surprise here, Israel's ministers held this decision and welcoming it, and saying perhaps the Palestinians will realize if they refuse to negotiate, the offers don't get better. They only get worse.

HARLOW: All right. Oren Liebermann for us continuing to follow this in Jerusalem. Thank you very much.

To Iran now, where seventh day of protests are under way. These are pro-government demonstrators rallying. Something different than we have over the last six days. U.N. Ambassador Nikki Haley is also calling for an emergency U.N. Security Council meeting over all of this.

BERMAN: President Trump issued a new show of support for the anti- government protesters. This morning, he wrote, "Such respect for the people of Iran as they try to take back their (inaudible) government. You will see great support from the United States at the appropriate time."

Our Nick Paton Walsh following these developments for us this morning. Nick, what's the latest?

NICK PATON WALSH, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, interestingly enough, we've heard the first assessment from Iran's hardline Republican guard as to how many people they say took to the streets in this past week against the government. They say actually there was never more than 15,000 people out on the streets at one time.

That's according to the head of the Republican Guard, (inaudible). They also say that one singular protest got larger than 1,500 people, and the fact the Republican Guard used to repress some of the more violent disturbances.

Rouhani actually put out in three different provinces (inaudible) many of the deaths, 21 actually in over a week in fact occurred. But today the pictures you are seeing are about the government making sure its voice is heard.

Reminding the world and those inside Iran that they have adequate support to get people out on the streets. Remember, moderate President Hassan Rouhani was recently just reelected, a pretty comfortable margin, inaugurated back in August.

There were enough people out there who don't want to see change and that allows them to flood the streets in their own way as well. We should point out too, you know, a bit of a reality check here, continued unrest, and instability is not likely suddenly overnight to find the moderate government, President Rouhani, replaced by something even more moderate.

The hardliners have made it clear they are waiting in the wings as we heard from the comments today from the Republican Guard about how big the numbers really got. They are casting it as quite a small demonstration (inaudible).

[09:25:12] The hardliners are still pointing at America as being behind fermenting this, and the continued tweets from Donald Trump adding to those Iranian hardliner claims that this is a U.S. conspiracy to some degree.

Despite the fact that much of the information on the ground suggests this is a ground swell of angry youth that are angry at food prices and perhaps a political repression, but today it's about the pro- government voice being heard.

We are perhaps seeing the opposition (inaudible) to some degree, but it really isn't clear. No one expected this to happen to this degree and nobody wants to predict where we go in the days ahead. Back to you.

BERMAN: All right. Nick Paton Walsh, watching this for us. Nick, keep an eye on it for us. Thank you so much.

The founders of the firm responsible for the so-called Trump and Russia dossier are pushing back against Republican critics. They now want their congressional testimony released to the public. Why?