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Trump Slashes Former Chief Strategist Steve Bannon; Trump Lawyers to Bannon: Cease And Desist; Nor'easter Bears Down On Atlantic Coast; Trump Dissolves Voter Fraud Commission; Rosenstein And Wray Talk Russia With Speaker Ryan; North And South Korea Speaking On Hotline. Aired 4-4:30a ET

Aired January 4, 2018 - 04:00   ET


[04:00:13] DAVE BRIGGS, CNN ANCHOR: Fast and ugly fallout between President Trump and Steve Bannon. The president's living up to his counter punch reputation after Bannon's thoughts about the president and his family went very public.

CHRISTINE ROMANS, CNN ANCHOR: The president's voter fraud commission has been decommissioned. CNN has learned the efforts to prove the unprovable has been in turmoil for months.

BRIGGS: And the first big nor'easter of the season churning up the east coast with a rough morning in store for millions of you in the northeast after snow blanketed the south. "Early Start" with reports in Washington, Seoul, South Korea and South Carolina.

Good morning everyone and welcome to "Early Start", I'm Dave Briggs.

ROMANS: And I'm Christine Romans.

BRIGGS: Good morning.

ROMANS: It is Thursday, January 4th, it's 4:00 a.m. in the east. The weather, a big story but still there is an earthquake in Washington to talk about. President Trump delivering a crushing rebuke to his Former Chief Strategist Steve Bannon. The White House releasing a stinging statement after excerpts from an upcoming book were released.

These excerpts "Bannon, calling the meeting between a Russian lawyer and the top Trump officials treasonous and unpatriotic." Bannon also reportedly told author Michael Wolf, they're going to crack down junior like an egg on national T.V.

BRIGS: The president now claiming Bannon "lost his mind" after he lost his White House job. The statement says "Steve Bannon has nothing do with me or my presidency. Now that he is on his own, Steve is learning that winning isn't easy -- as easy as I make it look. Steve had little to do with our historic victory which was delivered by the forgotten men and women of this country."

ROMANS: OK. Bannon himself responding late last night speaking on SiriusXM's Breitbart News Tonight for radio show, Bannon took it all in stride.


STEVE BANNON: The president of the United States is a great man. You know I support him day in and day out. Whether going through the country giving the Trump miracle speech or on the show or on the website, so I don't think you have to worry about that.


ROMANS: Complimenting the commander in chief. We also have new insight this morning and what is fueling President Trump's anger over the last few days. More on that in a moment, but first let's get to correspondent Jeff Zeleny. He begins our coverage from the White House.

JEFF ZELENY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Christine and Dave, an extraordinary war of words breaking out between President Trump and his former top strategist Steve Bannon all over the release of a new book coming out talking specifically about the Russian investigation.

Steve Bannon, of course, fired from his job in August but still in touch with the president accused the president's son, son-in-law and former campaign manager of treasonous behavior, unpatriotic behavior in his words. All about the 2016 meeting at Trump Tower with those three officials and a Russian lawyer.

Now, this is all coming out in new details in a book coming out later this month, "Fire and Fury: Inside the Trump White House". Now, Steve Bannon used extraordinary language here describing the president's family, describing their ambitions, their motives, the president shot back with a very harsh statement on Wednesday.

Now, in the White House briefing on Wednesday, Press Secretary Sarah Sanders, she described the book as trashy tabloid fiction. She also said the president's reaction was this.


SARA SANDERS, WHITE HOUSE PRESS SECRETARY: I think furious, disgusted would probably certainly fit when you make such outrageous claims and completely false claims against the president, his administration and his family.


ZELENY: But these explosive comments actually undermine the argument of the White House for more than a year trying to discredit and down play the Russia investigation. Steve Bannon says he believes this is all about money laundering. That's where this will ultimately go.

Now, of course, the relationship between the president and Steve Bannon has been fractured, no question. The open question is though if they will stay separated or if they will somehow rejoin forces once again.

The president, of course, so many times has been furious with some advisors only to bring them back into the fold. But this war of words, unlike anything we've seen in the first year of this Trump White House. Dave and Christine?

BRIGGS: Jeff Zeleny, thank you. Steve Bannon's flame throwing sparked a cease and desist letter from the president's lawyers last night demanding Bannon refrain from making sprigging remarks about Mr. Trump and his family. Sources tell CNN the president began the year furious and his legal team repeatedly pushing back the timeline for the end of the Russia investigation.

ROMANS: CNN reported last month some members of the president's inner circle feared he would erupt early in 2018 at the end of that probe indeed was not near. The president's rage boiling over Tuesday in a rambling 16 tweet assaults covering a range of topics including a bizarre taunting of Kim Jong-Un, aides inside the White House asking some of the president's top allies outside the White House to speak to him about the risks of those tweets present.

[04:05:09] BRIGGS: Accounts of the president's volatility come from interviews with the dozen White House officials, lawmakers and other Republicans, they paint a picture of a president who's intent on shaking up this country's political norms even as he faces crucial deadlines in the coming weeks on immigration and government funding, just to mention a few.

ROMANS: And then there is this from Michael Wolff's upcoming book, his excerpts keep coming out. There will be more today at 7:00 a.m. by the way. Ivanka Trump may have her sights set on becoming the first woman to occupy the oval office. Wolff writes Ivanka and her husband Jared Kushner made a deal when they came to Washington. That if the opportunity arose, she would be the one to run for president, Wolff does not disclose his sourcing for this anecdote.

Steve Bannon was said to be horrified when he learned about their deal. Bannon has made no secret of his distain for the couple of mocking their White house influence, he calls them Javanka. One big winner in all of this is Michael Wolff, his book already hit number one on Amazon, the publisher now speeding up the rollout plan and we'll be hearing from him. There will be another excerpt this morning, Dave, in the Hollywood reporter I think at 7:00 a.m. Eastern Time.


ROMANS: He will be interviewed on one of the big morning shows tomorrow. So, for this White House and for the political process, in Washington, there will be more revelations I think.

BRIGGS: Well, and much of this book appears to center on the concept that no one in this administration or, as the campaign as it were, thought they'd win even wanting to win. They characterize it as losing would be winning. This is everyone from the president, to Melania, to Kellyanne Conway. CNN cannot confirm any of this but it is number on Amazon in a quick second by 3:00 p.m. yesterday.

Meanwhile, the weather, a fears nor'easter making its way up the coast this morning, major cities like Philadelphia, New York and Boston could see heavy accumulation. Schools closed in all three cities and more than 28,000 flights have already been canceled for today in the U.S.

The vast majority of those along the east coast, as you might imagine, the governor of Connecticut urging drivers to stay off the roads.

ROMANS: In Boston, grocery store shelves already bare as people hunker down and after the snow comes a big chill. So cities will have to pile (ph) quickly.


MAYOR MARTY WALSH, BOSTON: On Friday night and Saturday we're going to have very cold weather below zero. So it's important for us that we get the snow off of the ground as best we can tomorrow. Because once the freeze comes in, it will be almost impossible to move the ice that will be formed.


ROMANS: The cold weather has been fatal, at least 12 cold-related deaths across the country since Tuesday. For the very latest, let's go to meteorologist Derek Van Dam in the CNN Weather Center, and what a remarkable weather system.

DEREK VAN DAM, AMS METEOROLOGIST: Yes. And what a mess it's going to create as well. It already has created some unprecedented snowfall in the southeast. Currently right now we have 15 states under some sort of winter weather advisory including a blizzard warning for Boston and parts of Long Island. New York, you are in a winter storm warning.

And I know we've had some e-mails from our colleagues in New York saying, hey, is this snow actually going to materialize here? In Central park? In New York City? Well, it's knocking on your doorstep as we speak.

So if we're going to time things out, we expect the snow to become heaviest in New York City from 7:00 a.m. through 2:00 p.m. this afternoon. And then we've shift the heavier bands across the northeast up towards Boston. And when we start getting the heavy bands, we'll also start to see the winds pick up intensity as well, 60 to 65 mile probably wind gust not out of the role of possibilities here. So that is why we have blizzard warnings in effect for many locations across the east coast.

Behind it, cold arctic air settles in. Believe it or not, Dave and Christine, temperatures overnight on Friday into Saturday morning along the east coast could potentially, if it materializes, be colder than that of the surface of planet Mars. Unbelievable.


BRIGGS: That's quite a statement there, Derek. This is what Bambogenesis looks like I guess.

DAM: You've been paying attention.

BRIGGS: All right. Thank you. We'll check with you in a bit. Here's live pictures of Hampton, Virginia, this beast is on the way up here to New York and beyond.

ROMANS: After a nice week of quality family time with their kids, everyone's a little too soon going to have some family time with their kids today.

BRIGGS: Parents are dreading that cold that came last night and school have cancelled --

ROMANS: It came.

BRIGGS: -- after a week off. Meanwhile, before it headed north east, parts of the southeast got a rare taste of snow. These people in North Charleston, South Carolina making the most of it, they did --

ROMANS: Please don't do that at home by the way. The snow -- the sledding behind the truck --

BRIGGS: Yes. And we don't recommend it.

ROMANS: I don't recommend it.

BRIGGS: Not your best idea. So, the two have been (ph) improvised sled there as you can see.

ROMANS: Check out this guy in Conway, South Carolina casually posing on top of a frozen pool.

BRIGGS: Don't recommend that either.

ROMANS: He was ready to do a live fishing. Let's get to CNN's Nick Valencia. He is in beautiful snowy Charleston, South Carolina.

[04:10:10] NICK VALENCIA, CNN CORRESPONDENT: Good morning Dave and Christine. No, you are not seeing things. This is Charleston, South Carolina a city that's more accustomed to gorgeous whether and picture a scenery certainly had a picturesque winter wonderland on Wednesday. Near records, snow fall totals about five inches fell. At one point the city saw about an inch per hour.

A lot of atypical scenes here in the city, specifically in Waterfront Park, one of the iconic fountains here, the pineapple fountain was completely frozen over. There were some hazardous conditions on the roadways as well on the way into Charleston. On I-26 we saw multiple accidents, about dozens of vehicles. Some even overturned from that severe weather.

The power company here also tells us about 11,000 people were without power. But that's just a fraction of the customers they serve, about 700,000 customers served overall.

We know that the city officials are still concerned today, Thursday, with the road conditions. There's an expectation that those roadways will remain frozen over. And if Charleston is expecting the weather to get any warmer, they're going to have to wait a couple of days. The next time, the temperature is expected to rise above 40 degrees is on Sunday. Dave, Christine?

ROMANS: All right. Nick Valencia, thank you, Nick.

President Trump dissolving ending his voter fraud commission, the reason given by the White House that too many states are refusing to participate. Now, this commission has been criticized as a misguided effort to prove the unprovable, to bolster the president's false claims that he would have won the popular vote if not for massive voter fraud.

BRIGGS: CNN has learned there has been concern about the commission inside the White House for months. One senior adviser calling it an "explicative s show" that went "off the rails". There is even concern within the administration that some of the commission's requests including asking for voter rolls crossed the legal line.

ROMANS: President Trump appointed Vice President Pence and Kansas Secretary of State Kris Kobach to lead that panel. A source close to the vice president admitted a recent lawsuit against the commission by one of the commission's own members.

Let me say it again. One of the members of the commission is suing the work of the commission and that didn't help. Kobach tells USA today disbanding the commissioner's just type (ph) "change in tactics". He insists an investigation to voter fraud will move forward despite repeated studies that show voter fraud is extremely rare.

The White House, saying, that they're going to send this over to Department of Homeland and Security for guidance and how to pursue voter fraud of the future.

BRIGGS: So the president can notch another legislative order, because he cancelled his own voter fraud.

ROMANS: That's interesting, right.

BRIGGS: All right. Ahead, the controversial chairman of the House Intel Committee will get his hands on Russia-related documents from the DOJ. Will it ease his concerns about the dossier on Candidate Trump?


[04:15:56] ROMANS: A feud over one of the many Russian investigations has been settled at the highest levels in Congress. Deputy attorney general Rod Rosenstein and FBI Director Christopher Ray met with House Speaker Paul Ryan. They talked about the investigation, the executive by the house Intel committee and its controversial chairman Devin Nunes.

BRIGGS: Then last night, Nunes reads truce of sorts with the Department of Justice over information he has been seeking on that salacious dossier about Candidate Trump. CNN's Manu Raju with the latest from Washington.

MANU RAJU, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Good morning Christine and Dave. Now, a long simmering fight between the Justice Department and the House Republican chairman of the intelligence committee Devin Nunes appears to have eased for now.

This, after Nunes and the justice department had a deal last night for Nunes to access classified DOJ (ph) news related to that dossier of allegations compiled by that British agent Christopher Steele looking at the coordination and ties to between the Trump campaign, president Trump himself and Russians.

Now that dossier, the Steele dossier has come under relentless attack from Republicans like Nunes who believe that it included a number of allegations that will push by Democrats in a way to discredit President Trump, to discredit his victory. That is something that Fusion GPS itself has pushed back on rather dramatically.

And Fusion GPS have asked the committees in which they have met with to actually release the transcript of their private interviews about the Steele dossier and all the other research they did about Trump's business, his ties to Russia. They say that there are 21 hours of transcripts that the public should see for themselves and they understand exactly what happened here.

This is something the Republicans are not agreeing to. Republican chairman Chuck Grassley for instance to the Senate Judiciary Committee said he will not agree to do that, saying that he would undercut his ongoing investigation, saying instead that Fusion GPS should come before his own committee and testify publicly. Christine and Dave?

ROMANS: All right. Manu Raju, thank you. The winner of a critical house race in Virginia will be decided today. State election officials will hold a lot draw to choose between Democrat Shelly Simonds and Republican David Yancey. The candidates names would put into little film canisters and then into a bowl. The first name drawn is the winner.

BRIGGS: Love it. The random drawing comes after a state court rejected Simonds request to reconsider a recount that resulted of the race being tied. The loser can legally ask for a second recount, but the Democrat Simonds is asking her opponent to honor the result. Yancey has not yet made that guaranteed.

ROMANS: All right, a record breaking, 22 women, now, serving in the U.S. Senate. The new high, Wednesday, when democratic Senator Tina Smith of Minnesota was sworn into office following Al Franken's resignation amid sexual harassment allegations. Now, 17 Democratic women and five Republican women are serving in the Senate.

The U.S. currently stands at 102nd place for female legislative representation, that's according to the World Bank. It falls behind countries like China, Iraq and Pakistan.

BRIGGS: Baby steps. The retirement party will have to wait, (INAUDIBLE). No grand prize winner in last night's $416 million Powerball drawing. That means Saturday nights jackpot is worth an estimated $550 million.

One person in Florida did match five numbers for a $2 million payoff. And winning numbers from win tonight's jackpot, 2, 18, 37, 39, 42 and the Powerball was 12. Wet blanket? Are you going to play on Saturday night?

ROMANS: Of course not. Of course not.

BRIGGS: All right.

ROMANS: But I just, you know, whatever. As long as you've got your 401 k funded and you've got a 5.9 plan for your kids and, fine, go out and burn your money.


ROMANS: All right, an effort to get rid of all those, tax reform, right? It's deliver the whole new set of loopholes, folks, and high tax states are scrambling to find a workaround for this. The deduction for state and local taxes is no longer unlimited. It is capped at $10,000.

If you live in New York, New Jersey, California, Illinois, you know exactly what I'm talking about. And those states are finding loopholes to let residents keep their full deduction. It gets super creative.

[04:40:08] Like letting the filers make a charitable donation in exchange for a tax credit. Donations, charities still 100 percent tax deductibles that works like this. Let's say you pay a 30 grand in local taxes state, you can only deduct 10,000 on your federal return. What about the extra 20,000? If you donate that amount to the state, you get the money back in a tax credit. Then you can fully deduct the 20 grand as a donation making up the difference.

Another way, states can change the way it taxes wages. Deductions on state income, what you make is capped, but deductions on payrolls, what your employer pays is not. So if state swaps income taxes for payroll taxes, states still get their wage tax your employer pays instead of you but keeps the full deduction and you make the same amount.

Either method will help taxpayers, but not the federal government. It will lose the billions and revenue rates by capping the self deduction. And I can guarantee you, there are some governors and there are some tax pros --

BRIGGS: We might be living in a state with one of those governors.

ROMANS: Indeed, states that are working very hard to find a way to benefit their residents, not the federal government.

BRIGGS: The politics of this tax bill are interesting. It appears to be war on the blue states. But just to get back to that real quick, so I can donate my property taxes as well as other local.

ROMANS: Whatever is the -- right. Whatever is the difference between the 10,000 that you're allowed to write off, right?

BRIGGS: Even property?

ROMANS: Let -- I think so.


ROMANS: I think it's the same level tax deduction, maybe it's just income. But what they're trying to do and they're going to do it differently in different states. They're trying to find a way, do you still pay the same amount to the state? Do you still pay the same amount? So the state is going to kind of tweak it and make it look like it's a charitable contribution that you can then write off on your federal return.

BRIGGS: I would assume you will hear from Governor Cuomo and Jerry Brown on that.

ROMANS: And I'm sure it will be challenge and the IRS is going to have to issue pages and pages. I'm still glad it's all simple than on my loopholes.

BRIGGS: Simplification, right? Where's you post card?

ROMANS: Right.

BRIGGS: Ahead, lawmakers on both sides of the aisle voicing concerns about the president taunting North Korea. And now a Yale professor warning about the president's mental health, we're live in Seoul.


[04:25:41] BRIGGS: President Trump's nuclear taunts against North Korea have revived questions about the president's authority to approve the use of nuclear weapons. He sent this tweet Tuesday threatening North Korea and touting the size of his nuclear button.

Democratic Senator Ed Markey of Massachusetts says "The cooler heads that once served as our last best hope against then unthinkable seem less reassuring with every tweet President Trump sends."

ROMANS: Senator Markey had already drafted legislation to require congressional approval before any president signs off on the nuclear -- on first use nuclear strike. A leading new Republican also raising concerns, Senator John Cornyn, the number two Republican in the Senate saying "I don't know how anybody's interest are served by escalating that rhetoric.".

But the White House keeps defending the president and saying his mental health is not a concern.


SANDERS: I think the president and the people of this country should be concerned about the mental fitness of the leader of North Korea. This is a president who's not going to coward down and he's not going to be weak and he's going to make sure that he does what he's promised to do.


BRIGGS: Politico is also reporting lawmakers concern about President Trump's mental state called Yale University psychiatry professor Dr. Bandy Lee in Capitol Hill last month for two days of briefing, she warned them about Trump saying he's going to unravel and we are seeing the signs. She also said lawmaker's level of concern about the president's dangerousness mess was surprisingly high.

ROMANS: All right, 27 minutes past the hour for the third time in two days, North Korea has spoken to South Korea on a newly reopened border hotline. For two years, that hotline has been quiet, and now they're using it again.

The South Korea reporting no sign of an imminent missile launch by North Korea, although not everyone in the region is calm. Very please to have our Will Ripley here this morning, he has reported extensively from North Korea and he's got the latest developments live from Seoul. They're talking after two years of silence really, they are at least talking.

And when you say this is meant to put a wedge is bid by the North Korean to put a wedge between South Korea and the United States, what is the view from there?

WILL RIPLEY, CNN INTERNATIONAL CORRESPONDENT: It's hard to know what North Korea wants to accomplish here, because there have been a total of five conversations on this Korean border hot line over the last two days. But the conversations have basically involved checking the line to make sure it's stable and then the north telling the south that they have nothing new to report.

Now we have heard that these discussions we're going to send around North Korea sending a delegation here to South Korea at a (ph) Pyeongchang Winter Olympics which kick off in just over a month.

This is something that North Korean officials have been discussing, not publicly but privately for a number of weeks now ever since the top United Nation's official made a visit to Pyongyang suggested that perhaps the Olympics could be an opportunity to grow the friendship between the two countries. But that hotline that is now active really hasn't netted any results yet. So it's something that we'll have to continue to watch here.

Japanese Prime Minister Shinzo Abe speaking just in the last few hours not convinced that this is a major break through. He told reporters that he believes this is the most dangerous security situation in this region since World War two and that Japan, South Korea and the United States need to continue taking measures to protect themselves against the growing threat of North Korea's nuclear program.

And keep in mind, Kim Jong-un has promised to continue testing weapons, including nuclear weapons in this New Year. Christine?

ROMANS: All right. Will Ripley, thank you for that.

Right, 29 minutes past the hour. President Trump with a forceful takedown of his former top strategist, have you ever seen a statement from the White House like this? No. He says Steve Bannon lost his mind when he lost his job. What's Bannon saying now about -- that his thoughts about Trump and his family have leaked out?