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Trump Lashes Out At Judge; Flynn Breaking The Law; Outline Of Tax Cut Proposals; Interview with Rep. Hakeem Jeffries; Senate Briefing on North Korea; Interview with Sen. John Barrasso; Freedom Caucus Supports Amendment. Aired 1-1:30p ET

Aired April 26, 2017 - 13:00   ET

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


[13:00:00] WOLF BLITZER, CNN ANCHOR: Hello, I'm Wolf Blitzer. It's 1:00 p.m. here in Washington. Wherever you're watching from around the world, thanks very much for joining us.

Up first, the biggest tax cut and largest tax reform in the history of our country. That's a quote. That's how President Trump's treasury secretary describes the proposals he'll unveil later this hour.

Steve Mnuchin and the national economic director, Gary Cohen, will be in the White House briefing room shortly, you're looking at live pictures right now, to outline the president's tax cut goals. We're going to bring that to you live.

The proposals call for cutting the business tax rate to, what, 15 percent. It would provide relief for middle income taxpayers. It would simplify the tax code by reducing the number of brackets from seven to three.

Earlier today, Secretary Mnuchin was asked how the administration will pay for this plan.

(BEGIN VIDEO CLIP)

STEVE MNUCHIN, TREASURY SECRETARY: The president and I and others in the administration fundamentally think we can get to three percent sustained economic growth. That's very achievable. Tax reform is critical to it. Regulatory reform is critical to it.

I think you should know, we've been working very hard on the president's executive orders, and we are focused on creating economic growth.

UNIDENTIFIED MALE: And you've said that growth would pay for the plan?

MNUCHIN: Absolutely.

(END VIDEO CLIP)

BLITZER: For the record, many economists doubt whether growth alone will pay for these tax proposals. The White House tax plan is just one of the stories we're following right now. President Trump lashes out at another federal judge, this time over so-called sanctuary cities.

And the Trump administration faces the fallout over concerns that former national security adviser, Michael Flynn, may have broken the law.

Let's bring in our Senior White House Correspondent Jeff Zeleny, our CNN Money Correspondent Cristina Alesci and our Justice Correspondent Pamela Brown.

Jeff, fill us in, first of all, on the latest -- the latest judge to incur the president's wrath and the ruling the judge issued.

JEFF ZELENY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Wolf, there were very strong words, indeed, from the president about the latest setback for him in a legal setting. He's been signing executive orders now, particularly this week as he heads into his final 100 days -- his first 100 days.

And he received a setback last evening on the sanctuary city executive order that he signed just five days after taking office. And that was an executive order to essentially penalize cities who shield illegal immigrants, undocumented immigrants, you know, from immigration laws.

But the president reacted very harshly to that ruling last evening, you know, as we've seen him do time and time again going against the judge in particular. Now, this was a judge who's from the state of California from the U.S. district court there.

But this president going aggressively after him and vowing to take this all the way to the Supreme Court where he said he would win.

But Wolf, what it is it's another example of the limits of presidential power presidential authority here. The president has now gotten three examples of that, all on his immigration agenda.

BLITZER: And, as you know, the White House last night put out a scathing statement in response to this federal judge's ruling.

Among other things, it said this. Once again, a single district judge has ignored federal immigration law to set a new immigration policy for the entire country. This case is yet one more example of egregious overreach by a single unelected district judge.

Today's ruling undermines faith in our legal system and raises serious questions about circuit shopping.

Here's what the president said just a little while ago.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Were you surprised by the ninth circuit ruling?

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I'm never surprised by the ninth circuit. As I said, we'll see them in the Supreme Court.

(END VIDEO CLIP)

BLITZER: See them in the Supreme Court he said.

All right, Jeff, this has become a pattern, the president --

ZELENY: Right.

BLITZER: -- attacking a federal judge over a ruling he disagrees with. But what does it say about his respect for the judiciary?

ZELENY: Wolf, we've seen this time and time again. I mean, the president has always used his sharp words. Back when his travel ban was blocked a couple different times, he used very harsh words against the judge, in a particular there.

Now, it's not that you can't, sort of, raise objections. But the personal nature of doing this, he called -- you know, he didn't call him out by name necessarily but he stopped just short of that. So, it does, of course, send a chill throughout judges elsewhere.

And one of the president's biggest accomplishment, his nominee to the Supreme Court, actually said that he was troubled by this at the time. Of course, that was the president's ruling on the travel ban that he spoke so aggressively and sharply, some would say so disrespectfully, against a federal judge.

But, Wolf, the President is speaking to his base. He is speaking to the fact that -- you know, that -- you know, that a lot of his supporters do not like all this legislative from the -- from the bench there. So, that's who he's talking to.

[13:05:03] The bigger question is, will he be successful in challenging this? That remains an open question. That travel ban, of course, still blocked -- Wolf.

BLITZER: Yes, it certainly is. All right, another legal setback for the president.

Pamela, the leaders, Republican and Democratic leaders, of the House Oversight Committee, they've now suggested that the president's former national security adviser, Michael Flynn, may have broken the law by not disclosing financial payments he received from Russian interests and Turkish interests. This is clearly another potential setback for the Trump administration.

PAMELA BROWN, CNN JUSTICE CORRESPONDENT: Absolutely. And it seems like it's a cloud that just won't go away for the White House. And as you heard there from a top Republican there in the House Oversight Committee, saying -- yesterday, Jason Chaffetz saying that it is likely Michael Flynn, President Trump's former national security adviser, broke the law.

And this is after he looked at some classified documents. He said he saw no proof that he asked for permission from the State Department or the Pentagon to receive the payments from these foreign governments from Turkey and Russia. And they claim that he didn't disclose these payments.

More than half a million dollars for lobbying activities for Turkey that went to Michael Flynn's firm. And $45,000 from Russia for a speaking engagement at RTTV which is considered by the U.S. government a propaganda arm for Putin and Russia.

And so, you heard both Jason Chaffetz and Congressman Cummings come out and say this could be a felony punishable up to five years in jail.

Now, the White House clearly trying to distance itself, Wolf, from this, saying, look, you know, we were asked to turn over documents. We don't have the documents they need. This happened before he became the national security adviser. But it's worth noting that Mike Pence, the Vice President, oversaw the transition.

And so, there is some onus on the transition to be able to vet the people coming into the White House. And just one final note from Michael Flynn's lawyer, he did weigh into this and said that, look, he followed the rules when it came to the Russia payment.

He said he asked for permission from DIA, the agency that he worked for, and that he kept them apprised of what was going on before and after the trip. So, the lawyer saying he complied with the law in that case at least, Wolf.

BLITZER: Yes, there's another big issue, Christina, developing this hour. We're going hear this hour from the treasury secretary, the head of the National Economic Council. They're going to outline at least some broad plans for major tax cuts.

CRISTINA ALESCI, CNN MONEY CORRESPONDENT: I like what you said which is broad plans because what we're hearing is we're not going to have the level of specifics to determine whether or not President Trump is making good on his campaign promise to help the middle class.

Here's what we do know in broad strokes. President Trump wants to simplify the tax code. He wants to take seven brackets down to three brackets.

He wants to eliminate the alternative minimum tax. That is a tax that's meant to make sure the wealthy pay their fair share of taxes but it has increasingly punished the middle class. And he wants to eliminate most itemized deductions.

All of that is very broad strokes. We need more details. And it's very much consistent with what we've heard on the campaign trail. And, at that time, when I was reporting on it, what I heard was, broadly speaking, this will help the very wealthy, the top one percent. That's the conclusion that many economists came to at the time.

And, right now, that's all we have to really go off of. Now, what is clear is that his plan is a boon for corporate America. We're talking about massive tax cuts that will cost $4 trillion over a 10-year period. That is -- that's why Wallstreet has been so excited about this plan.

But, again, it's unclear whether or not this will actually benefit the middle class.

BLITZER: It's broad plans and we're going to have live coverage of the details coming up right at, we believe, the bottom of the hour here on CNN. We'll have live coverage of these tax plans that are about to be introduced. A significant moment indeed.

All right, guys, thanks very much. Pamela and Christiane.

The president has to tell his tax cut plans to Congress, of course. And that could be a tough sell.

Democratic Congressman Hakeem Jeffries of New York is joining us from Capitol Hill. Congressman, thanks for joining us.

REP. HAKEEM JEFFRIES (D), NEW YORK: Thanks for having me, Wolf.

BLITZER: All right, you're on the Budget Committee. What's your reaction to what you've heard so far about the president's tax proposals, his recommendations to cut taxes?

JEFFRIES: Well, this tax proposal, as far as we can understand from the details presented so far, is really just a gift to corporate America and will not have anything meaningful to help improve the conditions of working families, middle class folks and those who aspire to be part of the middle class here in the United States of America. And that's problematic.

BLITZER: But you've suggested there should be no tax reform at all until the president actually releases his income tax returns. It doesn't look like he's going to do that anytime soon.

[13:10:00] So, what does that mean? You wouldn't -- let's say he does come in with some major tax reform, tax cuts for the middle class or lower income taxpayers, for that matter. You wouldn't support that if he didn't release his tax returns?

JEFFRIES: Well, I think a reasonable first step, Wolf, is for the president to do what every other president since Gerald Ford has done and disclose his tax reforms for review by the American people, so we can determine what conflicts of interest may potentially exist. How his proposed tax reform plan may actually benefit him, as opposed to benefiting the people of the United States of America.

This shouldn't be a controversial issue. Most Americans, Democrats, Republicans, people on the left and people on the right, believe that this president should disclose his tax returns, generally as a matter of transparency.

But when you are trying to propose one of the biggest tax reforms in the history of the country, they say it may be the biggest, it seems reasonable that he first disclose his tax reforms --

BLITZER: Yes, but --

JEFFRIES: -- for review by the American people.

BLITZER: -- don't hold your breath for the release of those income tax returns. As you know, he's basically said, you know, the election is over. He's not going to do it.

The deadline meanwhile, Friday night deadline, is fast approaching on a spending bill to keep the government running. The administration says the president would be willing to sign a bill that didn't include startup money to get the border wall with Mexico going.

From your perspective, does that clear the way for an agreement? Do you believe the president actually went ahead and blinked?

JEFFRIES: He certainly blinked. It doesn't clear the way. It's a step in the right direction because the president understood that there was no support. Uniform Democratic opposition to spending a dime of taxpayer money for a wall that he claimed would be paid for by Mexico and will not do anything to improve our border security.

And there were Republicans, particularly many, Wolf, along the border states, who weren't interested in paying for that border wall either. There's still some issues that we've got to work through. We've got to make sure that we fully fund the subsidies for the Affordable Care Act to make sure that 7 million people don't lose access to their health care coverage. And a whole host of other things that need to be addressed over the next few days.

BLITZER: We're just getting word on the House Freedom Caucus, these are conservative Republicans in the House of Representatives. They've now taken what's described as an official position supporting an amendment on health care reform, repealing and replacing the Affordable Care Act, Obamacare.

It means that many of them, most of them would vote yes in favor of the legislation. The draft amendment, as described here, would allow states to seek waivers to weaken several Obamacare insurance reforms, including the benefits insurers must cover and the ban on carriers charging more, based on a person's health background.

It looks like they're getting closer and closer to that magic number. I think they need 216 in the House right now, given some of the vacancies to get that passed. How does it look to you?

JEFFRIES: Well, the first version of the Affordable Care Act was going to kick 24 million people off of their insurance. It was going to increase costs, increase premiums, increase deductibles and impose an age tax that would hurt people between the age of 50 and 64.

Trumpcare 2.0 seems to be doubling and tripling down on the most egregious of the first version in order to get support from the Freedom Caucus. That's problematic. Including by essentially enabling states to deny the protection of people with preexisting conditions. That would be inhumane and unconscionable, Wolf. And the likelihood is that the more Freedom Caucus members that you add, the number of moderates who are Republicans and others will drop off and they're still not going to be able to get to their 216 number.

BLITZER: Very quickly, I want to get your reaction to the latest criticism from the White House. This federal district court judge who has now blocked the attorney general, the Justice Department's recommendations that federal funding for so-called sanctuary cities, like San Francisco or Los Angeles or New York City. That federal funding grants be blocked unless they cooperate with the Justice Department, with the Department of Homeland Security on providing information on any of the undocumented immigrants that might be picked up in these cities. What's your reaction to this?

JEFFRIES: Well, Donald Trump has, you know, challenged the legitimacy of the independent press, challenged the legitimacy of the national security apparatus, challenged the legitimacy of federal judge after federal judge, not recognizing that we have a separate and coequal branch of government. The independence judiciary is important to democracy.

With respect to this particular decision. It was a clear-cut decision anchored in the United States Constitution that the executive, the president, doesn't have the power to threaten or withhold funding in order to accomplish a public policy objective. That has to happen through the legislative process, Wolf.

And I'm hopeful that we can deal with the issue, generally, of improving border security without demonizing cities like New York City that regularly send $25 billion more to the federal government than we get back in return.

[13:15:00] BLITZER: Do you think that cities like New York, Los Angeles, San Francisco, others, there are dozens of other cities, so- called sanctuary cities, have a responsibility to pay attention to federal law?

JEFFRIES: We certainly have a responsibility to act consistent with federal law when it's humane. But also to do the right thing on behalf of the constituents that people in the city of New York, Los Angeles, San Francisco, are charged to protecting. And by penalizing and forcing cities like New York to enforce draconian aspects of the law in ways that would target undocumented families, not felons, is not consistent with protecting the safety and well-being of the people of New York City, of these other places. And that's why I'm pleased that the federal court so far has declared that what Trump is trying to do through his executive order is unconstitutional and is wrong.

BLITZER: All right, we'll see what the courts decide when it moves up. The president, as you heard him say earlier, he'll see these federal district court judges at the United States Supreme Court.

Congressman Hakeem Jeffries of New York, thanks for joining us.

JEFFRIES: Thanks so much, Wolf. BLITZER: Coming up, the U.S. military says there's new activity at North Korea's nuclear testing site. The news could be part of today's rare classified White House briefing on North Korea with the full U.S. Senate. Wyoming Senator John Barrasso, he will be there later this afternoon at the White House, together with maybe 99 other U.S. senators. Right now he's here in our studio. We'll discuss. We'll get a preview with him.

And take a look at these live pictures coming in from the White House Briefing Room. Coming up shortly, the top members of the president's economic team will lay out details of what they call the biggest tax cut proposals in American history.

Stay with us.

(COMMERCIAL BREAK)

[13:21:09] BLITZER: It's day 97 of the Trump presidency. Take a look at the live pictures coming from inside the White House Briefing Room. In minutes you'll see the Treasury secretary, Steve Mnuchin, and the national economic director, Gary Cohen, they'll be briefing reporters and all of us, in fact, on the details of the president's new tax plan. They'll also take questions. We'll have live coverage, once again, of that.

In about 90 minutes or so, the full U.S. Senate will be over at the White House for a security briefing on North Korea. It's an unusual place for the meeting, especially since the president hasn't officially confirmed he'll be there. He will drop by -- the White House says he will drop by, but national security advisers will be briefing the members of the Senate on a classified basis. The president will make an appearance we are now told.

The briefing comes as pieces of a controversial U.S. missile defense system are being rolled into place in South Korea with word that it should be operational in the coming days. Meanwhile, a U.S. defense official now says the military has observed what's described as significant activity at a North Korean nuclear testing site. And the country flexed its military muscle this week saying it conducted its largest ever artillery drill with Kim Jong-un watching.

Let's discuss North Korea much more with my next guest, Republican Senator John Barrasso of Wyoming. He's a member of the Foreign Relations Committee.

Senator, thanks very much for joining us.

SEN. JOHN BARRASSO (R), FOREIGN RELATIONS COMMITTEE: Thanks for having me, Wolf.

BLITZER: You're going over to the White House for this briefing.

BARRASSO: Yes.

BLITZER: What have you been told? I know it's a classified session. National security advisers will be briefing. The president will make an appearance. What's the urgency of doing this at the White House? Usually these briefings are held in the Senate.

BARRASSO: Well, I think it shows how consequential what's happening now in North Korea is in terms of their escalation. North Korea, for years, has been called the land of lousy options. And we have to do something now because we have just seen this incredible advance in North Korea's capacity, as well as their belligerence. You know, what they say or not say isn't as important to me as what they can do or not do, and they're getting to a point with the improved missiles, improved nuclear weapons that we know that they have and improved capacity to deliver that weaponry is something that we just cannot continue with this strategic patience of the last eight years, which is why we're where we are right now.

BLITZER: You were just in China. Is the Chinese government helping the United States deal with this nuclear crisis?

BARRASSO: Well, I think for a peaceful resolution, it's important that they do because --

BLITZER: Are they?

BARRASSO: They -- I met with the number two, three, and four leaders in China specifically on this issue. The president of China had just gotten back from his visit to Mar-a-Lago with President Trump. They seemed very optimistic and encouraged by that meeting between the two presidents. I believe they are going to be even more engaged. They say they have limited control over the dictator in North Korea, but they have more than we do. Eighty-five percent of the economy of North Korea is connected in terms of trade with China. So I think it's important that they take a more active role. There is more they can do and they need to do it.

BLITZER: Because a lot of analysts have suggested, I wonder if you agree with this theory, that a lot of the U.S. military maneuvers right now along the Korean peninsula, sending that aircraft carrier strike force there, a nuclear powered submarine with dozens of tomahawk cruise missiles, the exercises going on with Japan and South Korea, the military exercise, more designed to influence China than to deal with North Korea, for that matter, to convince China this is a crisis, you guys got to help out.

BARRASSO: Well, and I think it's doing it with specific -- they watch the globe. And when they see what the United States was able to do in Syria with the pinpoint accuracy of the 59 directed missiles into that air base, when they see the mother of all bombs that was done in Afghanistan, they see we have a global capacity that they might not have realized we had before --

[13:25:03] BLITZER: You're talking about the Chinese or the North Koreans?

BARRASSO: The Chinese -- both. Both. And they know now we have a commitment to use it.

So we want to work in a collaborative way with China. They have the influence through their trade relationships with North Korea. But it's not in China's best interests for North Korea to have the nuclear weaponry that close to that long border between China and North Korea.

BLITZER: But you know the downside. You've been to that region, I'm sure --

BARRASSO: Many times.

BLITZER: You've been to the Korean Peninsula. You've been along the DMZ. If the U.S. were to launch some sort of tomahawk cruise missile strike or a mother of all, you know, battles bomb against North Korea, they have an enormous conventional -- they have nuclear bombs too, but they have a conventional capability along the demilitarized zone that could hit 30 miles south, 20 or 25 million people who live in the capital of Seoul. That's something the Afghani opposition doesn't have or the Syrian regime of Bashar al Assad doesn't have. The U.S. launches a military strike, it would be a disaster in the entire region.

BARRASSO: Which is why, as I started, I said a peaceful solution is what's necessary. China needs to be heavily engaged in that. I'm very encouraged by what President Trump and President Xi have done working together. But what we're showing is, there is U.S. strength, there is U.S. commitment and capacity to use that strength if necessary with a new president in the White House, a. As we take a look at this peaceful solution with China engaged and, obviously, more sanctions. But for sanctions to be effective, China has to be involved, as well. And an enforcement of those sanctions will additionally help.

BLITZER: Very quickly, on this news that we're getting, the House Freedom Caucus, apparently now most of those members getting ready to vote in favor of some sort of compromise, an amendment that the president presumably likes. Let's say it gets the 216 votes on the floor of the House. You know the U.S. Senate. There are a whole bunch of moderate Republicans who aren't necessarily going to go along with it. What happens in the Senate?

BARRASSO: Well, it would come to the Senate. There would be an open amendment process. People would bring up amendments to vote. But I am committed, as a physician, to long-term solutions for the health care of the American people. And it's not just good enough to me to repeal Obamacare. There were reasons when I was practicing medicine I thought we needed to do health care reform. So we have to get actually to a better system that was in place even before Obamacare was passed. You have that commitment from all of the members of the United States Senate to provide health care that is much more affordable under Obamacare. As you know, the costs have skyrocketed. The choices have gone down. In my home state of Wyoming, there's only one insurance carrier selling on the exchanges. It's not a choice. It's not a marketplace. It's a monopoly. People deserve better.

BLITZER: Senator, thanks very much for joining us.

BARRASSO: Thanks for having me.

BLITZER: Senator John Barrasso of the beautiful state of Wyoming.

BARRASSO: Thank you. BLITZER: Coming up, the White House set to unveil what they're calling the biggest tax cuts in American history. We have details of the president's proposals. That's coming up next.

(COMMERCIAL BREAK)