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White House Mulls $100 Billion Tax Cut for Wealthy; Trump Willing to Shut Down Government over Border Security; Senators Grill Trump Administration About Family Reunifications; More Hot, Dry, Windy Weather Coming in California as Fires Rage. Aired 11:30-12p ET

Aired July 31, 2018 - 11:30   ET

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


[11:30:00] KATE BOLDUAN, CNN ANCHOR: With me now, Molly Ball, CNN political analyst, national political correspondent for "Time," and Phil Mattingly, CNN congressional correspondent.

Who knew it was so easy to get tax cuts through? Forget the benefits or non-benefits of a cap-gains tax cut. Going around Congress, it was so easy. What was all the fighting about? How is this going to go over on the Hill, Phil?

PHIL MATTINGLY, CNN CONGRESSIONAL CORRESPONDENT: As the forefathers always said, if you can skip the filibuster, skip the filibuster.

(CROSSTALK)

MATTINGLY: What's interesting is this has been pushed by conservatives for a long period of time.

BOLDUAN: Yes.

MATTINGLY: One of the primary backers of this idea is one Larry Kudlow, who owns a prominent place in the White House economic team. I think when you listen to what Steve Mnuchin said about this in the past, what he told the "New York Times," there's a recognition this might be dicey on the regulatory side.

(CROSSTALK)

BOLDUAN: There's a reason it's not been done.

MATTINGLY: Right. If you go back to the H.W. Bush administration, they did a legal analysis of this, decided they couldn't do it. Other people, the Justice Department, the Office of Legal Counsel put out a policy notice saying they didn't think they could do it. There's been shifts in laws based on Supreme Court findings since then that might open the door. But are they willing to push this? One thing I heard from my tax friends on the right is, even if this is challenged on the legal side, even if it's defeated on the legal side, just the short- term burst --

BOLDUAN: Wow.

MATTINGLY: -- of the asset sales might have a boost in the economy that would be effective on growth and might, for a short time, might be worth it.

BOLDUAN: That might be the whole ball game.

MATTINGLY: I guess the bottom line is Congress isn't going do it any time soon. They can't do it in the Senate. They're not doing more tax reform. They've already got a huge package done. You figure out ways you can do this. This is an idea. Will they pursue it? As you said, we will see.

BOLDUAN: We'll see.

Molly, is this just a trial balloon?

MOLLY BALL, CNN POLITICAL ANALYST: It could be. They obviously are saying they are considering this, not that they are necessarily going to do it. Haven't figured that out yet. As Phil said, might wind up in court if they were to do so.

But on the political end of things, I read this as the administration trying to send a positive message to the business community and to conservatives -- to fiscal conservatives. Both of those groups have been highly unsettled by the tariffs and are looking for something from the administration to mollify them, to placate them. So this would be something that would sort of say to them, we haven't forgotten about you. Some free traders are worried these tariffs actually could have a very negative economic affect in the near term. The administration looking to tell them that it is still on their side. And the flip side is that Democrats think this goes perfectly with their message that the tax reform bill of last year was a giveaway to the rich.

One reason previous administrations didn't do this was because of the legal authority. Another reason is that when you give a big tax cut, you take away a bunch of government revenue. That increases the deficit. We have seen this administration, this Congress not being particularly concerned about the deficit and debt. That would also be an effect of this.

BOLDUAN: It's hard to find a deficit hawk on Capitol Hill anymore. Let's just be honest.

Let's talk about -- there are two strategies when it comes to a possible government shutdown in September. The president yesterday said, if I don't get border security -- and there's been talk for years and years and years -- if I don't get the wall, I would have no problem doing a shutdown. Republican leaders seem to be trucking along with their fingers in their ears, going la, la, la, because they don't seem to be going along with it at all.

MATTINGLY: On Capitol Hill, there's the actual strategy, the one that Republicans and Democrats are pursuing when it comes to the spending bill. Then there's other strategy, which is whatever the president is thinking at any given moment. I'm not knocking the president on this in the sense that, this is a key policy priority for him. He has made clear he wants to fight about this. The reality, the people on Capitol Hill -- Republicans on Capitol Hill understand is that fight is coming. All they are asking right now is, let's have it in December. You want the shutdown fight, you want to fight over funding for the wall, we do it in December. In the meantime, pass as many appropriations bills as possible.

The interesting part about the process is the reason the spending and appropriations process is working on Capitol Hill is because of President Trump's threat back in March to veto any future giant spending bill. He is the reason things are working on Capitol Hill. They are working on a bipartisan basis. Leaders are saying, we know the fight is coming. Please wait until after the election. Please wait until after the election.

BOLDUAN: Please. Donald Trump getting in his own way. That's so interesting.

Molly, the "Wall Street Journal" has this -- this is what the editorial board was writing about and wondering if Donald Trump cares if Republicans lose control of the House in November. With this kind of key line, "Mr. Trump may not welcome a Democratic House, but he also might not fear it as long as Republicans keep the Senate. More than even most Republicans, Mr. Trump always needs a foil. And Speaker Nancy Pelosi would be from central political casting."

What do you think of that?

[11:35:00] BALL: I don't think Donald Trump wants to lose the House. I don't think Republicans want to lose the House. There's a growing sense that it may be inevitable, no matter what they do. There's also a sense that while Trump is an asset on the campaign trail for most Republican Senators and Senate challengers, because they are in states he won, he is not necessarily an asset for a lot of candidates in tricky House districts. Republicans very much want him to keep his attention on the Senate, keep his focus on the Senate, and not pay so much attention to the House where a lot of those candidates don't actually want him to come campaign for them. Trump doesn't like to lose. I don't think there's any three-dimensional chess going on where he has made the strategic assessment and decided he prefers to lose the House. I don't think that's the case. But given it may be inevitable, there may be a silver lining, I think, it what "The Journal" is saying.

BOLDUAN: Again, I will say, I don't play chess and I don't play three-dimensional chess well at all. We will stick with checkers.

Great to see you, Phil.

Great to see you, Molly.

Thank you.

Coming up, lawmakers on Capitol Hill are grilling administration officials -- we are looking live at the hearing right now -- over the president's zero-tolerance policy at the border that still has hundreds of immigrant children separated from their families despite the deadline of last week. One Senator saying the administration is turning these kids into orphans. What's next? That's next. (COMMERCIAL BREAK)

[11:40:58] BOLDUAN: Right now on Capitol Hill -- you are taking a live look at Capitol Hill -- lawmakers are grilling administration officials about the federal government's efforts to reunite families separated at the border due to the president's zero-tolerance policy.

Democratic Senator Dianne Feinstein saying during the hearing that the policy may now have permanently split up families. Listen.

(BEGIN VIDEO CLIP)

SEN. DIANNE FEINSTEIN, (D), CALIFORNIA: So it's not an exaggeration to say that the policies of President Trump and Attorney General Jeff Sessions may essentially orphan hundreds of immigrant children.

(END VIDEO CLIP)

BOLDUAN: The president sees it differently, tweeting this: "A highly respected federal judge today stated that the Trump administration gets great credit for reuniting illegal families."

What the president did leave out is what else the judge said. The criticism, this, "" The government is at fault for losing several hundred parents in the process., and that's where we go next."

Here is the latest that we know. The government says it reunited more than 1,400 families with kids age 5 and older. About 711 children taken from their parents are still in government custody. And 431 of those are children whose parents have already been deported, the government acknowledges.

Joining me to discuss is Lee Gelernt, the deputy director and lead attorney with the ACLU, who is leading the lawsuit over the separations at the border.

Lee, thank you for coming in again.

LEE GELERNT, ATTORNEY & DEPUTY DIRECTOR, ACLU: Thanks for having me.

BOLDUAN: OK. The government says, as of last week, that the deadline was met in their view. You say what?

GELERNT: The deadline was not met. The reason they're saying the deadline was met is because they took out all the kids they couldn't reunite. Of course, the deadline is met if you only say that they need to reunite those kids who they have reunited. That's what they did. They self-defined who they are going to reunite and said we met the deadline. What about all those parents who have been deported without their kids? They need to be reunited.

BOLDUAN: When you look at those -- the latest numbers, it's more than 700 children are in government custody. The government says the families were ineligible to be reunified for various reasons.

GELERNT: Yes. BOLDUAN: What happens to the 711 kids?

GELERNT: Right. The judge has made absolutely clear he wants them reunited. What he has said is by Thursday, we need to get --

(CROSSTALK)

BOLDUAN: This Thursday?

GELERNT: This Thursday. The government needs to give them a plan about what information they will give us to help track down those families who have been deported. The government is not doing it on their own. The judge recognizes that.

BOLDUAN: The judge is -- is it on the government? How are they going to track parents down that have been deported?

GELERNT: You know what's unfortunate? The government doesn't have a plan. The government shifted the responsibility to us and NGOs to find these parents. We will do it because the government is not. What we need is information from the government, any relative the government may know about, any last-known address, something to help us.

BOLDUAN: Are you confident you are going to be able to reunite these kids?

GELERNT: I'm hopeful. I'm hopeful. We will see. We're not going to give up. We have NGOs all over this country and abroad who are going to be looking for these parents. We hope the government will do the right thing and give us any information they may have that will help us --

(CROSSTALK)

BOLDUAN: Do you think they won't. Do you think they are not going to provide the information --

(CROSSTALK)

BOLDUAN: -- to providing the information?

GELERNT: They're saying they don't want to be on a time table. The judge said, no, no, no, you need to be on a timetable. The judge said I will give you credit so far. He is, by no means, letting them off the hook for these others. Just to be clear, the judge -- the same judge said this policy is brutal, offensive and unconstitutional. The parent has -- the government has lost track of parents. What I think the judge is really saying is, I'm going to keep encouraging you to keep this process going but, by no means, is he suggesting the government is off the hook or what they did was at all acceptable in separating these children.

BOLDUAN: Let me play for you -- this hearing is ongoing on Capitol Hill with government officials about this. One ICE official was speaking to Chuck Grassley. I want -- I will listen for the first time with you, what he says about these family reunification centers. Listen to this.

(BEGIN VIDEO CLIP)

[11:45:14] MATTHEW ALBENCE, EXECUTIVE ASSOCIATE DIRECTOR OF ENFORCEMENT AND REMOVAL OPERATIONS, ICE: With regard to the FRCs, I think the best way to describe them is to be more like a summer camp. These individuals have access to 24/7 food and water. They have educational opportunities. They have recreational opportunities, both structured as well as unstructured. There's basketball courts, there's exercise classes, there's soccer fields that we put in there. They have extensive medical, dental and mental health opportunities.

(END VIDEO CLIP)

BOLDUAN: What's your reaction to that?

GELERNT: I'm shocked by that. To begin with, the facilities are not that good. Let's just assume that they are palaces. The trauma is being caused by separating little kids from their parents. The entire medical community has overwhelmingly come out and said, you take a little child from their parent, it doesn't matter where you put them, they are causing trauma, and it may be lifetime trauma from being separated from their parents. Interestingly, they tried to say that in court, oh, judge, you should visit some of the facilities. The judge shut them down. He said, look, it doesn't matter what the facilities look like, the trauma is from separating the child from the parent. Every night, the child is going to sleep thinking, am I going to see my parents again. It doesn't matter whether they are in palaces. They certainly are not palaces. That's a shocking statement.

BOLDUAN: I had the head of the American Academy for Pediatrics on. The doctor said, this equates to child abuse, what's been seen.

You are going back to court. Is the fight over? It seems that the government says we have done what we can. Is the fight over now, Lee?

GELERNT: No, it's absolutely not. The judge has made it crystal clear. He got us on the phone early Monday morning to say, I want a plan to find these missing parents. He is calling them missing parents. The other thing is we want specific information about the parents who the government claims have criminal convictions. The judge made it clear, unless it's a very serious criminal conviction --

(CROSSTALK)

BOLDUAN: There's another bit I wanted to ask about. The government -- one of the government officials was asked, and said parents that did return to home countries without their child did so after being provided an opportunity to have that child accompany them on the way home. The parents declined the offer. I think this was open a call with reporters. Do you dispute that?

GELERNT: We absolutely dispute that. We need to talk to the parents.

(CROSSTALK) GELERNT: It's always possible that a few parents fully understood their rights and said, no, I'm going to leave my child behind. From what we know, it's absolutely clear the parents have not understood their rights, thought their child was coming with them or just didn't understand they were leaving their child behind. The way the government is presenting the choices to these parents is so misleading and coercive. We absolutely dispute that.

BOLDUAN: Another deadline this Thursday. We'll check back in.

GELERNT: Right. Thanks for having me.

BOLDUAN: Thank you. We really appreciate it. Thanks for coming in.

And the saga continues.

Coming up, firefighters in California could use some help themselves from the weather as they try to contain more than a dozen wildfires. It looks like they're not going to get any help any time soon. It is just growing bigger, wider and more deadly. Is there any end in sight? What they're doing to keep up with it. We will take you there live for an update. That's next.

(COMMERCIAL BREAK)

[11:53:03] BOLDUAN: It is the last thing people in fire-ravaged California need right now, a forecast that calls for more hot, more dry, more windy weather. But that's exactly what's expected for the rest of the week as the deadly Carr wildfire rages into its second week. It now covers an area about the size of Denver. The view from space gives you an idea of just how huge this thing really is. And 17 large fires are burning in the state right now. But the Carr Fire is what's worrying officials most. So big and intense that it's creating its own weather system. Those are some live pictures from Redding, California.

That is where Dan Simon is for us now.

Dan, you've been there on the front lines watching all this. What are you seeing today?

DAN SIMON, CNN CORRESPONDENT: Well, Kate, I have to say, after days of very grim news, firefighters appear to be turning a corner. This fire is now 27 percent contained, and it seems to be burning away from populated areas. Now, that does not mean that the threat is over, but it does mean that thousands of people can start returning to their neighborhoods. We saw a community meeting last night. Obviously, a lot of anxious folks, but a lot has to happen in order for that recovery to occur. You have to clear the streets of debris. You got to get the power back on. You got to clean out all the downed power lines. In the meantime, you do have these 17 major wildfires burning across California. As you can imagine, resources are stretched so thin. And this is just the beginning, really, of wildfire season, the peak of it is in late August and September.

Kate, let me show you where we are. We're in the Lake Redding Estates neighborhood. This is one of the many streets that's been leveled. Every time you look at this, it takes your breath away. You have about five or so houses here that have been completely leveled. You see all this charred debris. As you can imagine, the cleanup is just going to be immense.

Kate, we'll send it back to you.

BOLDUAN: Oh, my god. Just look at that. Absolutely leveled. Ashes everywhere.

Have you met any of the residents of that neighborhood yet?

[11:55:01] SIMON: We have. We see them, you know, in evacuation shelters. We see them out and about throughout the community. They're not letting people in here yet. Only journalists can get in here, and of course, all the firefighters and crews. At this point, it's too unsafe -- Kate?

BOLDUAN: Absolutely.

Dan, thank you so much for being there. Long road ahead for everybody in that neighborhood and so many more. Appreciate it.

Coming up, it's the first big test for Special Counsel Robert Mueller. The president's former campaign chairman in court. Day one of Paul Manafort's trial under way right now. The very latest from the courtroom coming up.

(COMMERCIAL BREAK)