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Trump Versus Bannon; Trump Ends Voter Fraud Commission; Nor'easter Bears Down; Isaiah Thomas Returns to Boston. Aired 5-5:30a ET

Aired January 4, 2018 - 05:00   ET


[05:00:00] CHRISTINE ROMANS, CNN ANCHOR: Spotify is going public and doing so in an unconventional way. "The Wall Street Journal" reports that Spotify confidentially filed for an IPO, a method known as a direct listing. That means it won't raise money as it goes public essentially cutting out a Wall Street banker broker.

Spotify's most recent valuation was nearly $20 billion, making one of the largest tech IPOs since Facebook. And if the debut goes well, that could encourage other highly valued start-ups to use direct listings.

Computer security experts have found two major flaws in virtually all smart phones and computers at risk. The flaws exist in computer chips and could allow hackers to steal. The entire memory of desktop, laptops smart phones and cloud servers.

Now, Intel and other chip makers say they are working on the issue. There's no easy fix. In fact the U.S. government warns chips need somebody replaced to completely fix the problem. Oh my.

DAVE BRIGGS, CNN ANCHOR: All right. EARLY START continues right now with the family feud live from the White House.


ROMANS: The book bombshell that has all of Washington talking; now the President counter punches and says Steve Bannon has lost his mind. What does Steve Bannon say? You'll be surprised.

BRIGGS: The president's voter fraud commission has been decommissioned. CNN has learned the effort to prove the unprovable has been in turmoil for months.

ROMANS: And the first big nor'easter of the season churning up the East Coast. Major snowfall expected in parts of the Northeast after blanketing the south, early reports this morning from Washington, and Seoul.

Good morning and welcome to EARLY START, everybody. I'm Christine Romans.

BRIGGS: I'm Dave Briggs. It's a busy news day, Thursday, January 4th. Just after 5:00 a.m. in the East.

Family feud on the front pages of all local and national pages, cockfight there in "The New York Daily News".

That's where we start with 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 came out, they quote Bannon calling the meeting between a Russian lawyer and top Trump officials treasonous and unpatriotic. Bannon also reportedly told the author Michael Wolff they're going to crack Don Jr. like an egg on national TV.

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

BRIGGS: Bannon himself finally responding late last night, speaking on Sirius XM's "Breitbart News Tonight" radio show, Bannon took it all in stride.


STEVE BANNON, FOMER WHITE HOUSE CHIEF STRATEGIST: 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 websites, so I don't think you have to worry about that.


BRIGGS: We also have new some insight on what is fuelling President Trump's anger over the last few days. More on that in a moment.

But, first, correspondent Jeff Zeleny 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.

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

ZELENY: But these explosive comments actually underline the argument of the White House for more than a year trying to discredit and downplay the Russian 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 advisers only to bring them back into the fold.

[05:05:03] But this war of words unlike anything we've seen in the first year of this Trump White House -- Dave and Christine.


ROMANS: Dave Zeleny, unlike anything we've seen in the first year, in a year we've seen lots of things we've never seen before.

And then this from the White House -- a cease and desist letter from the president's lawyers last night to Steve Bannon, demanding that he refrain from making disparaging remarks about Mr. Trump and his family. Sources tell CNN the president began the year furious at his legal team for repeatedly pushing back the timeline for the end of the Russia investigation.

BRIGGS: CNN reported last month some members of the president's inner circle feared he might erupt in 2018 if the end of the probe was not near. President's rage boiling over Tuesday in this rambling 16-tweet assault covering a wide range of topics, including the bizarre taunting of Kim Jong-un.

Aides inside the White House asking some of the president's top allies to speak to him about the risk those tweets present.

ROMANS: Accounts to the president's volatile comes from interviews of a dozen White House officials, lawmakers and other Republicans. They paint a picture of a president who is intent on shaking up the country's political norms, even as he faces crucial deadlines in the coming weeks on immigration and government funding.

BRIGGS: Then there's this from Michael Wolff's book. Ivanka Trump may have set her sights 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 the sourcing for the anecdote. Steve Bannon was said to be horrified when learned about their deal. Bannon made no secret of his disdain for the couple, mocking their White House influence with the term Javanka.

One big winner in all this is Michael Wolff. His book already hit number one on Amazon. And the publisher is now speeding up the rollout plan.

ROMANS: All right. A fierce nor'easter making its way up the coast this morning. Major cities like Philadelphia, New York, and Boston could see heavy accumulation. Schools are closed in all three of those cities and more than 2,800 flights canceled for today in the U.S., most of them along the East Coast.

The governor of Connecticut is urging drivers to stay off the roads.

BRIGGS: In Boston, grocery store shelves already bare as people hunker down there and after of the snow comes the big chill, so cities will have to plow quickly.


MAYOR MARTY WALSH, BOSTON: 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.


BRIGGS: The cold already fatal, at least 12 deaths across the country since Tuesday.

For the latest, let's go to meteorologist Derek Van Dam in the CNN Weather Center.

Derek, good morning to you. What is on the way here in New York?

DEREK VAN DAM, AMS METEOROLOGIST: Well, Dave, Christine, you know, nor'easters are really game of miles. Any shift to the east by 50 miles, it pulls the heaviest snow away from it, and across the Atlantic Ocean. If it shifts west, then we've got a whole different story in terms of snowfall totals.

But this is what we're expecting. The brass tacks from CNN weather center, three to six inches for Philadelphia; four to eight to New York City. You could experience over a foot of snow in Boston where we're expecting snowfall rates of two to three inches per hour.

Look at the storm, just deepening and strengthening across the East Coast. We talked about the term bombogenesis, that's when storms drop 24 millibars in 24 hours. This one is dropping 24 millibars in 12 hours.

We have winter storm warnings and blizzard warnings across the East Coast, covering 15 different states. Zoom it in a little bit closer. The coastal areas of Delaware and to Long Island and Massachusetts, that's where we're expecting blizzard conditions, winds gusting in excess of 60 miles per hour.

Here's the radar. Interstate 95, it's going to start to get messy within the next three hours or so right in time for morning rush hour. We expect the heaviest snowfall in New York City, between 7:00 a.m. and 2:00 p.m. Boston, a little bit later this evening.

Be careful on your drive home tonight. That's when things get very dicey.

This is the storm system. You can see it churning up the East Coast. We do expect a major wind threat with this particular storm, potentially peaking at near horizon force for many locations, especially on the backside of the system.

Look at the cold air it's going to draw in, Dave and Christine. It will be colder on the East Coast this weekend than it will be on the surface of mars, believe it or not. Back to you.

ROMANS: Well, that really puts it in perspective. Thanks so much, Derek.

Everybody, be careful out there today. It's going to be a rough one. Stay home if you can.

The Baltimore Teachers Union calling on the city to shut down all public schools because of heating problems. Those problems forced four schools to close on Wednesday. Students were dismissed early from two others.

The parents, teachers and students say heating and pipe problems are far more widespread. Officials responded to complaints at 60 schools, about one third of the district's buildings.

[05:10:02] The CEO of Baltimore schools says she will not make a knee- jerk decision to close all buildings at once.

BRIGGS: What a mess.

All right. Ahead, the president's attorneys want to silence Steve Bannon, a cease and desist letter, capping off an angry response after Bannon's harsh thoughts about the Trump family and much more went public. More next.


BRIGGS: All right. Steve Bannon's fire met with President Trump's fury.

Helping us break it all down, CNN politics reporter Tal Kopan live for us in Washington.

Good morning to you, Tal. There is awful lot to unpack here.

ROMANS: There was this little article that came out yesterday.

BRIGGS: Yes, 27 pages I think you have to do more than skim that, including the personal revelations about the president they say he didn't process information. He didn't even skim. Some say he was no more than semi-literate.

But beyond the personal, there's the legal. I know you have some legal background, and there's this notion from Michael Wolff. Quote: From Steve Bannon, the chance that Don Jr. did not walk these jumos up to his father's office in the 26th floor is zero.

What are the legal implications of that statement?

TAL KOPAN, CNN POLITICAL REPORTER: Well, look, it opens up a whole another line of questions up to what is already a sort of massively questioned meeting that happened back with Don Jr. and some of those Russian individuals. And so, you know, it's speculation on Bannon's part, but certainly, it's something that investigators on the Hill, on Mueller's team are going to look into. It opens up the individuals who were in that meeting to another round of questions even though all of them have denied any such introduction taking place.

And so, you know, I don't think alone, this is something we can say happened. But it, certainly, once again, raises questions as to whether there has been some untruths coming out of the camp about what happened in that meeting.

[05:15:05] ROMANS: We're told that the president is furious about this. You saw that remarkable statement that came from the White House yesterday. Not something that I've ever covered anything like it before where the president says Steve Bannon, his former chief strategist, had lost his mind.

Steve Bannon last night on a radio show saying that the president is a good man.


ROMANS: A good leader, you know?

What is the role of Steve Bannon, do you think, going forward for so many of these Republicans in 2018? He is someone who has really shaken up the establishment. Many people credit him -- although the president clearly doesn't -- credit him with getting the president elected to this White House. What is his role do you think going forward for Republicans here?

KOPAN: Well, look, his role has always been to sort of the opposition party. I mean, you know, "Breitbart" has gone after Republicans in power, Paul Ryan, Mitch McConnell. And so, you know, it was always sort of weird to conceive of him in the White House because once you're in there, you're sort of the establishment. Now, you are the one in control.

And so, in some ways, it's almost a realignment are where Bannon has found himself, which is sort of as an agitator, as a thinker, as someone who sort of lobs bombs in the direction of the establishment. What's just being played out is whether Donald Trump and his White House, whether they like it are not, have now found themselves in that category of establishment, at least in Steve Bannon's life.

BRIGGS: Maybe this is what he meant by establishment like blow the whole thing up. I don't know.

But what's next is the president's legal team taking action. Of they say that legal claims have been brought to light including defamation by libel and slander, and breach of his written confidentiality and non-disparagement agreement with our client.

So, first let's take the confidentiality and non-disparagement. If that's their angle, would that confirm the things said in this book? And if it's defamation, wouldn't that open all this up to discovery, making it all out in the open?

KOPAN: Yes. Well, if this becomes litigation of any sort, it's probably not going to be good for the parties involved. That's always been the thing --

BRIGGS: To anyone, right.

KOPAN: Right. And that's always been the thing with Donald Trump's threats about suing people for defamation is you're right, you actually have to prove the statements were false in a court of law. And once you do that, you open up yourself up to being proven -- to have those statements proven true. And you also have to prove things like intent. You know, it's more complicated than just saying someone said something bad about you.

ROMANS: Right.

KOPAN: So, that's why you usually don't see any follow-through in terms of the actual court cases.

Now, the confidentiality, non-disparagement agreement, this came up a little bit during the campaign and there was some question as to whether those contracts were sort of ironclad. That could be an interesting piece of litigation. But, again, any time you take this to the courts, you're sort of allowing for a realm of possibilities that if all you're trying to do is tamp something down, I'm not sure that's the route you want to go.

ROMANS: I know you cover immigration too, and there were parts of these excerpts I found really fascinating including some exchanges purported to be with Rupert Murdoch, who was talking to the president about immigration and the president had talked with a Silicon Valley CEOs. And he said, yes, they need me. They need more H-1B visas, and Murdoch was saying, no, no, no, they love Obama. You misunderstand. You might have been -- I'm paraphrasing here but you're getting played here basically.

It's sort of painting the president as not really understanding the basics of the things he's campaigned on like immigration.

KOPAN: Well, this is certainly not a flattering portrayal of the president.


KOPAN: I mean, that is absolutely certain and it is remarkable how many times you see sources, former aides sort of describing the inner workings of the White House and inner workings of the presidency in these unflattering terms. I mean, it comes out again and again, which is truly remarkable. And, you know, in some ways, the H-1B anecdote, which is, of course, visas for high school immigrants, heavily use by the tech sector, it's sort of indicative of how Trump has struggled with immigration overall. He's always been very anti-illegal immigration.

But recently, his administration has really been trying to restrict legal immigration as well, which, over the campaign, is something Donald Trump said he didn't want to touch over and over, and said he understood, as a business owner how important that legal immigration system was to running some of his businesses, which have used many of these visas. And so, it is a bit of an internal struggle, but we have seen of late much of the administration's work has been to curtail some of the giving out of H-1B visas and some of these other procedures as well.

ROMANS: And asylum for refugees --


ROMANS: -- and almost every category of immigration.

BRIGGS: All right. Tal Kopan, we want to ask you what happened to the president's voter fraud commission. See you in about 20 minutes.

ROMANS: Thank you.

All right. In an effort to get rid of the tax loopholes has delivered a new set of loopholes.

[05:20:04] High tax states scrambling to find a workaround for this, the deduction for state and local taxes is no longer unlimited. It is capped at $10,000. That will hit taxpayers in New York, New Jersey, California, Illinois. So, those states are finding loopholes to let residents keep the full deduction.

Here are some of the things they are considering. Letting filers make a charitable donation in exchange for a tax credit. Charities donations are still 100 percent deductible. So, it works like this. Let's say you pay 30 grand in local taxes, you can only deduct 10 in your federal return, so there's $20,000. If you donate the amount to the state, you get the money back in a tax credit. You can fully deduct the $20,000 as a donation, making up the difference.

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

Either way it helps taxpayers and the loser is the federal government. It will lose billions in revenue raise by capping the SALT deduction. I guarantee, in blue states, they are working overtime trying to find ways to undo what tax reform does for those blue states high tax workers.

BRIGGS: The politics of this tax bill.

Ahead, they say misery loves company. That might explain why the winless Cleveland Browns are getting a parade today. Coy Wire with the "Bleacher Report" next.


[05:25:04] BRIGGS: A lot of Cleveland in sports today.

Cleveland star Isaiah Thomas didn't play last night but he still got a standing ovation from the Boston fans.

ROMANS: Coy Wire has more in this morning's "Bleacher Report".

Hey, Coy.


The weather in Boston is cold outside by it's all warm and fuzzy inside TD Garden for Isaiah Thomas. All hugs and smiles, per usual, wherever that guy goes. The two-time all star back in Boston for the first time since that blockbuster trade swaps him to the Cavs and Kyrie Irving to the Celtics.

Still nursing that hip injury. As you mentioned, Dave, he didn't play but still got the standing ovation when they showed him on the jumbotron.


ISAIAH THOMAS, CLEVELAND CAVALIERS GUARD: I almost walk that way, in their locker room. It's -- I mean, I love this city. I love this organization.

This is -- they've given me an opportunity to be who I always wanted to be and I can't thank them enough. So, there's no hard feeling to anybody in the city or anybody in this organization. And I'm glad I'm back.


WIRE: Celtics fans had plenty to cheer about in this game. They rolled to a 102-88 victory. It's a rematch of last season's eastern conference finals. And good seeing those guys play again.

In the western conference, Steph Curry is on fire. In just two games back from his injury, he's already scored 70 points, 32 of them came last night in a last-second thriller against the Mavs. Curry burying this game-winning three pointer reminding everybody why he's the greatest shooter the game's ever seen, win 125-122.

After watching the Browns become just the second team to go 0-16 in NFL history, Cleveland fans are now going to get the chance to celebrate their perfect season. They're going have a parade on Saturday, the same day that the playoffs begin. The route is a big circle around the stadium, get it, a big O.

There's even a GoFundMe page to help the cost. And with any left over money, they're going to donate to the Greater Cleveland food bank. So, that's incredible. Fans can even register to participate and perhaps be voted queen of the perfect parade.

BRIGGS: Is that right?

WIRE: There's a lot of fun stuff. They're making good jokes.

BRIGGS: Hey, one and 31. It is no sign of things getting much better next year despite a second straight number one pick.

Coy, thank you.

WIRE: You're welcome.

ROMANS: All right. President Trump takes down his former top strategist. He says Steve Bannon lost his mind.