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EARLY START

HR McMaster Out, John Bolton In; Senate Passes $1.3 Trillion Spending Bill; Gloves Off Between Trump and Biden?; 4:30-5a ET

Aired March 23, 2018 - 04:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


[04:30:38] DAVE BRIGGS, CNN ANCHOR: President Trump now has his third National Security adviser in fewer than 500 days. The latest shakeup brings in John Bolton at a critical time ahead of talks with North Korea.

(BEGIN VIDEO CLIP)

ANDERSON COOPER, CNN HOST: If Melania Trump was watching this, what would you want her to know?

(END VIDEO CLIP)

CHRISTINE ROMANS, CNN ANCHOR: An exclusive CNN interview with former "Playboy" model Karen McDougal. She says her affair with the president lasted nearly a year and he offered to pay her for it.

BRIGGS: And breaking the Senate votes overnight to fund the government through September. One senator threatened to stop it all over his biggest concern -- the name of a nature preserve.

ROMANS: And a trade war is here. China says overnight it will respond to the new Trump tariffs. The move sent the Dow and the Asian markets plummeting in the latest headache for President Trump.

(BEGIN VIDEO CLIP)

CHARLIE KIRK, FOUNDER, TURNING POINT USA: What advice would you give to the 25-year-old Donald Trump knowing what you know today?

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Don't run for president.

(END VIDEO CLIP)

ROMANS: Welcome back to EARLY START. I'm Christine Romans. That's at the forum for millennials yesterday.

BRIGGS: Melania might have some other advice to a 25-year-old Donald Trump. Ponder that.

I'm Dave Briggs. It's 4:31 Eastern Time. Thanks for being here.

In a move as predictable as it was haphazardly rolled out, National Security adviser HR McMaster is out, John Bolton is in. The former U.N. ambassador will be the new National Security adviser effective April 9th.

For the second time in as many weeks the president announced a major personnel change on Twitter. And it comes just one week after he adamantly denied stories about pending staff shakeups.

(BEGIN VIDEO CLIP)

TRUMP: So there'll always be change, but very -- it was a very false story. It was very -- a very exaggerated --

UNIDENTIFIED REPORTER: Do you have (INAUDIBLE) Bolton, sir?

TRUMP: A very exaggerated and false story.

(END VIDEO CLIP)

ROMANS: White House officials tell us the president's sudden announcement was unexpected. One official saying the president was eager to get ahead of other news. Perhaps that includes Karen McDougal's exclusive CNN interview last night about her alleged affair with Mr. Trump.

As for Bolton, the president once again turning to a supporter from FOX News. Someone more likely to share his views than to challenge them.

BRIGGS: Bolton was on FOX less than an hour after the announcement, going to president's stance on a matter of frustration to him -- the White House leaks.

(BEGIN VIDEO CLIP)

JOHN BOLTON, INCOMING NATIONAL SECURITY ADVISER: It's completely unacceptable. You cannot conduct diplomacy. You cannot expect other foreign leaders to be candid and open in their conversations with the president if some munchkin in the executive branch decides they're going to leak the talking points or the transcript or any -- or any other aspect of it.

(END VIDEO CLIP)

BRIGGS: Bolton says he looks forward to addressing complex challenges and that any past comments at odds with the president including fiercely supporting the Iraq war even now are behind him.

CNN's Jeff Zeleny has more from the White House.

JEFF ZELENY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Christine and Dave, President Trump starting a Friday morning with another staff shakeup. Last evening, the president naming a new National Security adviser, John Bolton. The former U.S. ambassador to the United Nations in the Bush administration, now a FOX News contributor. He will be coming in as National Security adviser, of course replacing General HR McMaster, a 34-year military veteran who was brought in a year ago to right the ship after the firing of the first National Security adviser, Michael Flynn. This has been in the works, but it came much quicker than people

thought it would. In fact officials here at the White House last week, the White House press secretary stood and said there would be no change in the National Security adviser role.

(BEGIN VIDEO CLIP)

UNIDENTIFIED REPORTER: Has the president spoken directly to either McMaster, Carson, Shulkin, to tell them that their jobs are in fact safe?

SARAH HUCKABEE SANDERS, WHITE HOUSE PRESS SECRETARY: I spoke directly to the president last night. He asked me to pass that message along to General McMaster.

(END VIDEO CLIP)

ZELENY: The question here now is what does it mean for foreign policy? General McMaster was leading the charge in setting up those negotiating talks between the U.S. and South Korea, of course, over the North Korea nuclear program. So having someone who has a much harder line view will certainly change the shape of the talks and could indeed interrupt them.

We'll have to see how that goes. But no question we're seeing a pattern here as the president certainly reshapes his foreign policy teams, his economic team and others. We'll see what that brings forth today when the president meets with his Defense Secretary James Mattis.

[04:35:01] This is a key development. Secretary Mattis of course now essentially standing alone after Secretary of State Rex Tillerson out of the picture. General McMaster out of the picture. So that relationship is so critical with all the challenges on the foreign policy front -- Christine and Dave.

ROMANS: All right. Jeff, thanks.

All right. McMaster out, Bolton in. But wait, there is more. Another major personnel shift Thursday President Trump's lead personal attorney on the Russia probe also resigned. John Dowd's disagreements with the president intensifying in recent weeks as the president ramped up his personal attacks against Special Counsel Robert Mueller. A source tells us over the past few days, the president had complained privately about Dowd believing he was falling short.

BRIGGS: In a statement to CNN, Dowd says he loves the president and wishes him well. Here's former White House chief strategist Steve Bannon's take on the president overhauling his legal team.

(BEGIN VIDEO CLIP)

STEVE BANNON, FORMER WHITE HOUSE CHIEF STRATEGIST: John Dowd is a good man and I think that's why essentially more aggressive attorneys got brought in than are now -- you know, I think President Trump is going to war. I think it's very obvious he's going to go to war on this.

(END VIDEO CLIP)

BRIGGS: Going to the mattresses, the Godfather might say. Earlier this week, the president hired another veteran Washington attorney Joe DiGenova to publicly defend him and challenge the special counsel.

ROMANS: Now to a CNN exclusive. Explosive claims from former "Playboy" model Karen McDougal in the affair she claimed she had with Donald Trump. The alleged affair came to light shortly before the 2016 election. McDougal tells CNN she traveled to meet Trump and he would reimburse her for the flights. And she claims one time he offered her money for more than just expenses.

(BEGIN VIDEO CLIP)

KAREN MCDOUGAL, FORMER PLAYBOY MODEL, CLAIMS HAD AN AFFAIR WITH PRESIDENT TRUMP: After we had been intimate, he tried to pay me. And I actually did not take that.

COOPER: Did he actually try to hand you money?

MCDOUGAL: He did. He did and I said -- I mean, I just had this look of -- I don't know. Just -- I don't even know how to describe it, the look on my face must have been so sad because I have never been offered money like that before, number one. But number two, I thought, does he think that I'm in this for money or why I'm here tonight or is this a normal thing? I didn't know but I looked at him and I said, that's not me. I'm not that kind of girl. And he said oh, and he said, you're really special. And I was, like, thank you.

(END VIDEO CLIP)

BRIGGS: McDougal says her relationship with Trump was consensual, loving, and claims he sometimes compared her to his own daughter.

(BEGIN VIDEO CLIP)

MCDOUGAL: He's very proud of Ivanka, as he should be. I mean, she is a brilliant woman, she's beautiful. She's -- that's his daughter and he should be proud of her. He said, I was beautiful like her and, you know, you're a smart girl. And there's been a lot of comparing. But there was some -- yes, I heard a lot about her.

(END VIDEO CLIP)

BRIGGS: Anderson Cooper asked McDougal about First Lady Melania Trump. That's when the former Playmate got emotional.

(BEGIN VIDEO CLIP)

COOPER: If Melania Trump is watching this, what would you want her to know?

MCDOUGAL: That's a tough one.

COOPER: Or say to her?

MCDOUGAL: Yes. What can you say except I'm sorry? I'm sorry. I wouldn't want it done to me. I'm sorry.

(END VIDEO CLIP)

ROMANS: A spokeswoman for the first lady did not respond to our request for a comment. The White House has said the president denies the affair. No further comments tonight from the president on Twitter or otherwise.

ROMANS: Just days ago McDougal filed a lawsuit against American Media, the publisher of the "National Enquirer." She sold the rights to her story to American Media which is run by a close friend of the president. Now McDougal says they bought it to bury -- bought her story to bury her story.

BRIGGS: Yes. Catch and kill.

ROMANS: In order to protect the president. We should note Stormy Daniels' "60 Minutes" interview also conducted by Anderson Cooper, that airs this Sunday.

BRIGGS: So be nervous if you work in the White House.

Breaking overnight. The U.S. Senate passing a $1.3 trillion spending plan keeping the government funded through the end of September. Before the early morning 65-32 vote, Republican Senator Bob Corker expressing frustration with this process that forced yet another late, late-night on Capitol Hill.

(BEGIN VIDEO CLIP)

SEN. BOB CORKER (R), TENNESSEE: This is ridiculous. It's juvenile. This is a juvenile process that we go through every time we do one of these. I would respectfully ask our leader who's been dealing with a lot today, and I'm glad that he has the job that he has and I don't, but could you explain to us what has occurred over the last -- 11 hours that keeps us here voting on a bill that we all know is going to pass regardless of how we vote on it.

SEN. MITCH MCCONNELL (R), MAJORITY LEADER: I would say to my good friend from Tennessee, by the way, I'm very sorry, he's decided to leave the Senate given how much he's obviously enjoyed it today.

(LAUGHTER)

MCCONNELL: I'm going to say after a long and intense day of such discussions with several of our members who had legitimate concerns, I'm relieved rather than depressed that we might be able to actually finish tonight.

(END VIDEO CLIP)

[04:40:08] BRIGGS: One of those members McConnell referred to is a Republican senator who threatened to shut down the government over the renaming of a nature preserve. Believe it or not.

More now from Capitol Phil Mattingly.

PHIL MATTINGLY, CNN CONGRESSIONAL CORRESPONDENT: Dave and Christine, about 28 hours after lawmakers unveiled the more than 2300-page spending bill, $1.3 trillion, major increases for both defense spending and non-defense domestic spending, it was passed and cleared and sent to the president's desk.

A major accomplishment for lawmakers who've really been careening from budget crisis to budget crisis for what seems like years.

[04:10:03] Now the government is funded through September. But not without a little bit of drama first and what that drama be? Well, Senator Rand Paul like he did in February had some objections, didn't like the process, clearly didn't like the policy, but he ended up coming in line before Senator Jim Risch, the Idaho senator, the junior senator from the state. His problem? The name of a nature preserve. In fact, a name that was from one of his former adversaries when he was the state's Senate majority leader, the governor of Idaho at the time.

Senator Risch was so upset about his one-time rival getting the preserve named after him that he almost short circuited the entire process. Now he wasn't going to stop the bill, but he certainly was willing to string it out a lot longer, potentially until Saturday morning after the government shutdown deadline. Eventually he acquiesced.

It was one of those moments where you sit there looking at the Senate floor, the senators, the chamber itself, and wonder, what on earth is actually happening right now? Turns out political rivalries, guys, they are very real. The bottom line is, the spending bill, $1.3 trillion, is now clear for the president's signature. Doesn't have the $25 billion that President Trump wanted in wall funding. It does have $1.6 billion in border security that will lead to more fencing along the border. So that's somewhat of a win for him.

But when you talk to lawmakers on both sides, they say two things. One, everyone agrees this wasn't a pretty process. No one is exactly happy with how it ended. But they also agree that this was a compromise and one that was needed to try and clean up a process that for months if not years has been severely problematic -- Dave and Christine.

ROMANS: All right. Phil, thank you.

China is not afraid of a trade war. The country could slap $3 billion in tariffs on U.S. imports. It's planning a 25 percent tax on American pork and recycled aluminum. Also a 15 percent tax on fruit, nuts, wine, steel pipes and 120 other products from the U.S. The tariffs will take effect maybe next month after the public weighs in.

China says the move is a direct response to President Trump's decision to impose tariffs on steel and aluminum imports and it comes hours after new additional tariffs, yesterday's tariffs on about $50 billion worth of Chinese imports. The president warned this is the first of many.

Peter Navarro, the director of the Office of Trade and Manufacturing Policy was on "ERIN BURNETT OUTFRONT."

(BEGIN VIDEO CLIP)

PETER NAVARRO, DIRECTOR, OFFICE OF TRADE AND MANUFACTURING POLICY: By basically cracking down on China's IP theft and force technology transfer, the outlook now of American corporations that have been stolen from by the Chinese and going to China under really burdensome and unfair conditions are brighter today than they were yesterday.

(END VIDEO CLIP)

ROMANS: That's the view from the White House. The view from Wall Street? The very companies you're talking about, their shares fell. The Dow plunged more than 700 points in response. The biggest losers all have significant exposure to China. That's Caterpillar, 3M and Boeing.

Asian markets fell 3 percent to 4 percent. A very big move for one day here. And yet overnight, a contradictory move by President Trump showing that he is willing to dodge a trade war with some allies. Trump is suspending steel and aluminum tariffs on imports from the EU and six other countries while they discuss ways to reduce excess production capacity.

BRIGGS: Rex Tillerson delivering a heartfelt goodbye to State Department workers and bidding a not-so-fond farewell to Washington. The secretary appealing to the staff he led for barely a year to maintain their integrity above all.

(BEGIN VIDEO CLIP)

REX TILLERSON, OUTGOING SECRETARY OF STATE: This can be a very mean- spirited town.

(LAUGHTER AND APPLAUSE)

TILLERSON: But you don't have to choose to participate in that.

(APPLAUSE)

TILLERSON: Each of us get to choose the person we want to be and the way we want to be treated, and the way we will treat others.

(END VIDEO CLIP)

BRIGGS: President Trump fired Tillerson as secretary of State last week. Tillerson officially leaves his post at the end of next week. A not-so-veiled shot you think at the president?

ROMANS: No.

BRIGGS: Any tone he has set?

ROMANS: His take on the do unto others adage is something a lot of people are talking about yesterday, I'm sure.

BRIGGS: Yes.

[04:45:01] ROMANS: All right. Tensions rise after police shoot and kill an unarmed black man in his grandmother's backyard. Protesters block thousands from getting into an NBA game. Hear the powerful message on the court from the Kings' owner.

(COMMERCIAL BREAK)

[04:50:11] BRIGGS: 4:50 Eastern Time. Protests erupting in Sacramento, California, four days after police gunned down an unarmed black man in his grandmother's backyard. Demonstrators marching into Sacramento City Hall and later on to an interstate highway, demanding the arrest of officers who shot and killed Stephon Clark. Police said the officers believed Clark had a gun but investigators who say they did not find a weapon, only a cell phone.

Protesters also blocked the entrance at Golden One Center where the Sacramento Kings and Atlanta Hawks were about to play. Most ticket holders were not able to get inside. The game was played in front of a largely empty arena. Some fans expressed outrage online. The Sacramento Kings' owner took to the court with this message.

(BEGIN VIDEO CLIP)

VIVEK RANADIVE, OWNER, SACRAMENTO KINGS: We here at the Kings recognize that we have a big platform. It's a privilege, but it's also a responsibility. It's a responsibility that we take very seriously. We recognize that it's not just business as usual and we are going to work really hard to bring everybody together to make the world a better place starting with our own community.

(END VIDEO CLIP)

BRIGGS: Leadership. Crowds dispersing as the night wore on. Police made no arrests.

ROMANS: All right. Who wouldn't want to see a fight between Joe Biden and President Trump? Ben Sasse -- Senator Sasse says it's like your uncles fight in the backyard on Thanksgiving. They'll both be up for it.

(COMMERCIAL BREAK)

[04:56:23] ROMANS: Two senators having some old-fashioned fun after a snow day in Washington. Democratic Senator Cory Booker tweeting, "Aaron Burr and Alexander Hamilton had theirs. Republican Senator Jeff Flake and I are having our version of snowball duel. Who gets hit most buys others' staff pizza." And true to their word, there they are, hurling snowballs.

BRIGGS: Their duel a bit more civil than the one playing out between President Trump and former Vice President Joe Biden.

Here's CNN's Jeanne Moos. (BEGIN VIDEOTAPE)

JEANNE MOOS, CNN SPECIAL CORRESPONDENT (voice-over): For a minute, Joe Biden sounded almost like Donald Trump?

JOE BIDEN, FORMER VICE PRESIDENT: I said if we were in high school I'd taken him behind the gym and beat the hell out of him.

MOOS: It was a return to --

UNIDENTIFIED MALE: Towel snapping trash talk.

MOOS: That then Vice President Biden started back during the campaign.

(On camera): Ladies and gentlemen, in this corner, Joe "the body blow" Biden.

BIDEN: No, I wish we were in high school. I could take him behind the gym. That's what I wish.

MOOS: And in this corner, Donald "the devastator" Trump.

TRUMP: And he said I'd like to take him behind the gym. I dream of that.

MOOS (voice-over): Who needs a weigh-in when now President Trump is weighing in on Twitter. "Crazy Joe Biden is trying to act like a tough guy. He would go down fast and hard crying all the way. Don't threaten people, Joe."

Some salivated at the thought of a brawl. "I'm down for Trump versus Biden pay-per-view fight. That money could build the wall." For others, it conjured up images of "Grumpy Old Men."

UNIDENTIFIED MALE: Are you crazy?

MOOS: But at least no one is envisioning a frozen fist fight. Tweeted Republican Senator Ben Sasse about Biden and Trump, "Both of our crazy uncles are fist fighting in the backyard."

UNIDENTIFIED FEMALE: This is such a dude response. If women ruled the world, this would not be what we're getting like.

UNIDENTIFIED FEMALE: I know.

TRUMP: Mr. Tough Guy.

MOOS: Commenters kept posting GIFs of the imaginary combat. And check out the size of the president's gloved hands in this poster. Like his career in wrestling, a Trump-Biden rumble is hot air.

TRUMP: You know what you do with Biden? You go like this.

MOOS: Jeanne Moos, CNN.

TRUMP: And he'd fall over.

MOOS: New York.

(END VIDEOTAPE)

ROMANS: Thanks, Jeanne. Let's get a check on "CNN Money" this morning. It's not so fun. Stocks are selling off around the world. Asian markets plunged 3 percent to 4 percent overnight. It's a big one-day move. The Dow dropped more than 700 points yesterday. That's the fifth biggest point decline in history. Percentage wise not even near the top, however.

Futures down again this morning. But a recent survey of fund managers says the number one risk to the market is a trade war. Inflation had been number one for over a year, but now we are really concerned about a trade war in markets. It comes after a 24-hour tit-for-tat in which China warned it will slap $3 billion in tariffs on U.S. goods because the president slapped tariffs on steel and aluminum. And that announced another $50 billion worth of tariffs on Chinese goods.

There were long lines yesterday for opening arguments in the case of the U.S. versus AT&T. The anti-trust trial of the decade. The government argued that an AT&T and Time Warner merger would lead to higher prices. About 45 cents per subscriber per month. AT&T said the deal is needed to allow the company to keep up with Facebook, Google, and the tech giants which are -- which it claims are, quote, "running away with the industry."

The CEOs of AT&T and Time Warner were in attendance as well as the DOJ's anti-trust chief. The trial is expected to last six to eight weeks. It reconvenes on Monday. Time Warner of course the parent of CNN. A lot of folks watching that case.

BRIGGS: It's hugely impactful.

All right. EARLY START continues right now. John Bolton is in, HR McMaster is out. What does it mean for our national security?