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EARLY START

Senate GOP in Deal Making Mode; Trump Cracks About "Pocahontas" at Navajo Event; The Free Press Strikes Back; Pope Francis Meeting with Aung San Suu Kyi; Prince Harry Knew Markle Was "The One". Aired 4:30-5a ET

Aired November 28, 2017 - 04:30   ET

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


[04:30:16] CHRISTINE ROMANS, CNN ANCHOR: Senate Republican brass looking to clear up a big hurdle today with their tax plan. Can leadership give certain senators what they want without losing support elsewhere?

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Although we have a representative in Congress who they say was here a long time ago, they call her Pocahontas.

(END VIDEO CLIP)

DAVE BRIGGS, CNN ANCHOR: Stunning remark from the president in front of Native American heroes. His racially insensitive crack once again creates controversy that distracts from his political agenda.

ROMANS: And a real coup by a real news organization. An activist poses as a rape victim just strengthened the case for an accused child molester. "The Washington Post" refuses to fall for scam and turns the tables. That was really something.

Welcome back to EARLY START. I'm Christine Romans.

BRIGGS: Yes, that.

And I'm Dave Briggs. Thirty minutes past the hour.

We start this morning with Republican leadership in deal-making mode as the party tries to desperately pass a tax bill. The Senate Budget Committee meets to consider it this afternoon and they face a problem. Nearly a dozen Republican senators have voiced various concerns with the proposal and two of them, Ron Johnson and Bob Corker, among the 12 Republicans on the Budget Committee.

If GOP leaders cannot bring Johnson and Corker on board, they may choose to postpone today's vote to avoid a public failure.

ROMANS: To that end, President Trump will join Republican senators for lunch today right before that budget committee meeting, satisfying all the Republican's concerns with his tax bill, potentially a very tight needle to thread. And they've only $80 billion to work with and still stay below the there $1.5 trillion, that would let them pass this bill without a single Democratic vote.

Our coverage starts this morning with Phil Mattingly on Capitol Hill.

(BEGIN VIDEOTAPE)

PHIL MATTINGLY, CNN CONGRESSIONAL CORRESPONDENT: Christine and Dave, you can stop me if you've heard this before, but Republicans don't have the votes for a major legislative initiative, and a major legislative initiative that they want done as soon as the end of this week. That means Republican leaders right now are scrambling.

Here's kind of the baseline right now that they're working with. There are at least a half dozen of senators who still have major problems with their tax overhaul proposal. Now, if it you talk to GOP leadership aides, they believe that by the end of this week, they'll be able to get the votes they need to move this forward.

Remember, they have 52 Republican senators in the chamber. They can only afford to lose two and still pass a vote. There's one down, what some of the major issues right now are. You have people like Senator Ron Johnson, Senator Steve Daines. Their issue is when it comes to pass-through entities, essentially business entities that pay their taxes through the individual side. Now, both the House and Senate bill tried to address this issue, a major cut in the rate as it currently stands.

Johnson and Daines say it doesn't go far enough. They're looking for changes I'm told are being made.

Then you have what you could commonly refer to as the deficit caucus, people like James Lankford, Bob Corker, Jeff Flake, individuals who are concerned about how much this tax proposal will add to the deficit in the long-term.

Now, guys, it goes even further than that. You have Senator Susan Collins of Maine. She's made very clear that the inclusion of the repeal of the individual mandate, from Obamacare, that's problematic. She also wants the state and local tax deduction to at least be somewhat added back in. Currently, it's repealed in the Senate bill.

Take a look at what the House bill has. That's probably where this is going to end up. There's a compromise there for property taxes cap at $10,000. Aides tell me that's where they might end up in the end.

And then, of course, you have Senator John McCain, obviously, the famous thumbs down that killed the health care bill. Well, Senate leaders don't really know where he stands on this, voted against the '01 and '03 Bush tax cuts, clearly a deficit hawk, but as always has concerns about the process.

Here's kind of the bottom line. Republican leaders need to move quickly and the things that they need to do are kind of contradictory. They need to add money for some senators, as other senators raised deficit concerns. How they figure out a way to square those issues right and the next couple of days is going to be crucial as to whether or not this has a future. Do you want to know where the first thing is going to be? This

afternoon. The Senate Budget Committee. They're scheduled to mark up the tax proposal before it goes to the Senate floor.

Who's on that committee? Senator Ron Johnson, Senator Bob Corker. Republicans on that committee hold a one-seat advantage. If either of those senators vote against it, the bill will go down.

So, stay tuned -- Dave and Christine.

(END VIDEOTAPE)

ROMANS: All right. Thank you. Republican leaders say failure is not an option on this. They are facing a familiar struggle here, answering concerns of some members without losing support of others. There are two major concerns, deficit and the fate of past-through businesses. Pass-through businesses, the latter worries Senators Ron Johnson and Steve Daines. Both want bigger tax cuts for so called pass-through entities.

Pass-throughs can be small businesses, and they can also be larger firms with many employees, but all pay taxes through the individual tax rate, not the corporate rate. And now, the Senate bill allows pass-throughs to deduct 17.4 percent from their taxable income.

[04:35:02] But there's a problem. It means the highest earners pay more than the proposed 20 percent corporate rate.

Senator Johnson says this favors corporations over small business. He wants to increase the deduction. But that will cost serious money and runs counter to what the deficit hawks want. The deficit is a difference, of course, between how much the government takes in and how much it spends. The current Senate bill adds $1.4 trillion to the deficit over ten years.

The GOP says economic growth will eventually pay for all this. But Senator Bob Corker among others worries that may not be the case. He wants to include a provision to raise taxes if revenue falls short. So far, independent estimates show this bill does not hit the GOP target growth.

BRIGGS: All right. The latest insensitive remark from President Trump coming in stunning fashion. At an Oval Office event Monday honoring elderly Navajo code talkers who used their tribal language during World War II to transmit unbreakable messages. The president choosing that moment to make a wise crack, referencing his nickname for Senator Elizabeth Warren.

(BEGIN VIDEO CLIP)

TRUMP: You were here long before any of us were here. Although we have a representative in Congress who they say was here a long time ago. They call her Pocahontas. But you know what? I like you, because you are special.

(END VIDEO CLIP) ROMANS: The term is considered by many to be a racial slur. It seemed to catch the Navajo veterans off-guard, prompting polite smiles and silence. Perhaps even worse, the scene played out in front of a portrait of Andrew Jackson. He is the president who signed into law the Indian Removal Act of 1830 that allowed the federal government to remove Native Americans from their land and led to the death of thousands. Something that would be known as the Trail of Tears.

Senator Warren blasted the president last night on CNN.

(BEGIN VIDEO CLIP)

SEN. ELIZABETH WARREN (D), MASSACHUSETTS: I really couldn't believe it. President Trump couldn't even make it through a ceremony to honor these men without throwing in a racial slur. You know? He thinks that somehow he's going to shut me up with that. And it's just not going to happen. It didn't work in the past. It's not going to work in the future.

(END VIDEO CLIP)

BRIGGS: White House Press Secretary Sarah Sanders says the use of Pocahontas was not a racial slur and that certainly was not the president's intent to use one. The president's comment was roundly denounced by Native American groups.

ROMANS: All right. Thirty-seven minutes past the hour.

"The Washington Post" says it was the target of a sting operation apparently run by the conservative activist group Project Veritas. "The Post" reports that a woman approached it weeks ago. She falsely claims that Alabama Republican Senate candidate Roy Moore impregnated her in 1992 when she was just 15 years old.

BRIGGS: In a series of interviews, "The Post" says she repeatedly pressed reporters for their opinions and assurances that revealing her alleged experience with Moore would end his campaign. "Post" reporters confronted the woman with inconsistencies of her story and a printout of an online fund-raising campaign that seemed to tie her to Project Veritas.

(BEGIN VIDEO CLIP)

"WASHINGTON POST" REPORTER: I want you to know that this is being recorded and video recorded. So, if there's anything you want to say about why you're here and how you came to be sitting here, I really would like to know that story as well.

UNIDENTIFIED FEMALE: I mean, I --

"WASHINGTON POST" REPORTER: I mean, we're planning to write a story about this, so this is probably a good opportunity if you want to explain a little bit more, and about all this.

UNIDENTIFIED FEMALE: I mean, I really don't -- I mean, I told you already that I wasn't even sure about if I wanted to go through with the story at all.

"WASHINGTON POST" REPORTER: Yes.

UNIDENTIFIED FEMALE: You know?

"WASHINGTON POST" REPORTER: Yes.

UNIDENTIFIED FEMALE: So, I mean I think I probably just want to cancel and not go through with it.

(END VIDEO CLIP)

ROMANS: So, that woman insisted she was not working with any group that targets journalists but on Monday morning, "Washington Post" reporters saw her walking into the New York offices of Project Veritas which has a history of using deception to attack mainstream media organizations, including CNN.

BRIGGS: "The Post" never ran a story based on the woman's claims and a tactic that should be familiar to the Veritas founder, James O'Keefe, "The Washington Post" confronted him on the street, asking if he knew a woman who claimed to be a victim of Roy Moore.

(BEGIN VIDEO CLIP)

"WASHINGTON POST" REPORTER: Does Jaime Phillips work for Project Veritas? Did you guys send her to pose as a victim of Roy Moore to "The Washington Post"?

JAMES O'KEEFE, PROJECT VERITAS FOUNDER: I'm 15 minutes late to this meeting. So, I got to -- I got to run. But I will -- we'll get in touch with you. OK?

(END VIDEO CLIP)

ROMANS: So, late Monday, O'Keefe did post undercover videos purporting to expose "The Washington Post" quote hidden agenda. But the under cover conversations with "The Post" national security reporter, they contain no damaging revelations.

[04:40:07] CNN has not verified the authenticity of those videos. In fact, it was mostly sort of an explainer of how newspapers work. How there's editorial board that is independent from the news gathering operation and how the editorial board can write in favor or against certain issues and -- it's just like journalism 101. This is how it works.

BRIGGS: "The Washington Post" is known for its fact checking. That's what it's known for. In fact, they fact check the president's false and misleading statements in these nine, 10 months, and check that out.

ROMANS: I think on average of five a day or something. Is that right?

BRIGGS: It's an astounding number. We'll get it for you and share it later.

Ahead, what does Prince Harry think his mother, Princess Diana, would have said about this royal engagement?

(BEGIN VIDEO CLIP)

PRINCE HARRY, BRITISH PRINCE: With everything else that's going on, I'm sure --

MEGHAN MARKLE, ACTRESS: She's with us.

PRINCE HARRY: I'm sure she's with us, yes, jumping up and down somewhere else.

(END VIDEO CLIP)

BRIGGS: Harry and Meghan Markle discussed the pros and cons of the spring wedding and a story the world needed. That's ahead on EARLY START.

(COMMERCIAL BREAK)

[04:45:45] ROMANS: A surprise 11th hour entry in the Alabama Senate race. Retired Marine Colonel Lee Busby launching a long shot write-in campaign, with just two weeks left to the special election. Busby once served as a top aide to then-General John Kelly, now President Trump's chief of staff. Busby telling "The Washington Post" he thinks the sexual impropriety allegations against Roy Moore have created an opening for centrist candidate like him.

BRIGGS: Busby says what he lacks in campaign structure, he'll make up by spreading the word on social media and mainstream media as well. He will join "NEW DAY" this morning during the 8:00 hour. Meantime, Roy Moore himself remains on the defensive. He vowed Monday to keep fighting in the final weeks of the race. Tempers also starting to boil over in and around the Moore campaign.

ROMANS: Two people got physical with the news crew outside the event last night. And this was not a hostile camera crew. This was FOX News. FOX identifies the two who got physical as Tony Goolsby, a DeKalb County coordinator for the Moore campaign, and Derwood Reagan (ph) of the DeKalb GOP.

Also of note, the White House now says President Trump will not travel to Alabama to campaign for Roy Moore.

BRIGGS: The Justice Department is urging a federal judge to throw out a lawsuit that seeks to block President Trump's pick for the acting director of the Consumer Financial Protection Bureau. Justice officials claim the lawsuit filed by Leandra English grossly misstates the status quo. English is Richard Cordray's handpicked successor at the CFPB. Cordray, an Obama appointee, resigned as director last week.

ROMANS: White House budget chief Mulvaney is President Trump's pick to run the financial watchdog agency. He and Leandra English both showed up to work for Monday, both sent emails to bureau staffers signed acting director. English offering her appreciation for the employees, Mulvaney ordering everyone to disregard her instruction.

BRIGGS: Despite past harsh comments about the CFPB, Mulvaney says not to be alarmed if he's in charge.

(BEGIN VIDEO CLIP)

MICK MULVANEY, TRUMP-APPOINTED CHIEF OF CFPB: This agency will stay open. Rumors that I'm going to set the place on fire or blow it up or lock the doors are completely false. I'm a member of the executive branch of government. We intended to execute the laws of the United States.

(END VIDEO CLIP)

BRIGGS: Then, Mulvaney declared an immediate 30-day freeze on hiring in all new rules, regulations and guidance.

ROMANS: There's a lot of questions this morning about the ongoing open investigations. What happens to open investigations there right now with that freeze. So, we shall see.

BRIGGS: All right. It is official, Cyber Monday is the largest online sales day in history. How much did Americans spend? We'll fill you in on CNN "Money Stream", next.

(COMMERCIAL BREAK)

[04:52:49] BRIGGS: At the top of the hour, Pope Francis is scheduled to meet with Myanmar's de facto leader Aung San Suu Kyi. He's expected to push for an end of the violence against Rohingya Muslims and more access for humanitarian aid groups. The pope is advised to stir clear of actually using the word Rohingya because it angers people in Myanmar and could overpower his message.

CNN's Ivan Watson with the latest live from Hong Kong.

Good morning, Ivan.

How does he walk a very delicate line?

IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, he brings his message, what he says is reconciliation, forgiveness and peace. He sat down first with the commander of the armed forces in Myanmar. That was ahead of schedule in the military, even though they're supposed to be a democratic transition. It still controls a lot of reins of power in Myanmar after decades of military dictatorship. He sat down with leaders of a wide variety of different religious groups and he's supposed to sit down with the elected head of the government, the Nobel Peace Prize winner Aung San Suu Kyi.

There was a lot of hope that Myanmar would make this Democratic transition. That's part of why the Vatican established full diplomatic relations with Myanmar just last May after Aung San Suu Kyi visited the Vatican. What they did not expect was that starting last August, the military would crack down on this long persecuted Muslim minority, the Rohingyas, and create an exodus of more than 600,000 refugees and about three months across the border to neighboring Bangladesh.

The pope has been critical about this in the past, calling the Rohingyas brothers and sisters that are getting tortured and killed. But we expect his language will be much softer when he gives a speech alongside that elected leader Aung San Suu Kyi in just a matter of hours -- Dave.

BRIGGS: All right. Should be certainly an intriguing moment there. Ivan Watson live for us in Hong Kong -- thank you, sir.

ROMANS: All right. Prince Harry revealing when he knew American actress Meghan Markle was the one. In their first post-engagement interview, the couple opened up about whether they planned to have kids right after saying "I do".

CNN's Erin McLaughlin live at Buckingham Palace.

[04:55:00] Good morning.

This interview really fascinating to hear them together as a couple for the first time.

ERIN MCLAUGHLIN, CNN INTERNATIONAL CORRESPONDENT: It really was a fascinating interview, Christine.

And this morning, people here in the U.K. are waking up very excited about this engagement, and that excitement is really reflected in some of the morning headlines. Let me just show you some of them. Here we have "The Sun" with the headline "She's the One". And then you have "The Daily Mail" with the headline, "The stars were all aligned. This beautiful woman just fell into my life."

But it has to be said, the media hasn't always been kind to this couple. There has been scrutiny, especially about Meghan Markle's background as an actress, divorcee. Also shockingly about her ethnicity as well, her mother's African-American. Her father's white.

She was asked about that in that interview last night. Take a listen to what she had to say about it.

(BEGIN VIDEO CLIP)

MEGHAN MARKLE, ACTRESS: Of course, it's disheartening. It's a shame that that is the climate in this world to focus that much on the matter that would be discriminatory on that sense. But I think, you know, at the end of the day, I'm really just proud of who I am and where I come from, and we have never put any focus on that. We've just focused on who we are as a couple.

(END VIDEO CLIP)

MCLAUGHLIN: It has to be said, it is Meghan Markle's diverse background is one of the key reasons people here are excited about this engagement. They really see it as a step forward for the royal family, the modernization of the royal family.

But that wasn't the only thing they talked about in that interview. They also talked about how Harry got down on one knee during the proposal. It was an intimate night in Kensington Palace. They were roasting a chicken.

When he popped the question, she said she was extremely surprised. He was also asked about children. Prince Harry said, one step at a time. And, of course, the next step being that wedding scheduled for spring 2018, Christine.

ROMANS: And all the guessing where it will be, you know? Where it will be and how big a deal? We'll all be watching for sure. I know you'll be there, Erin McLaughlin.

Dave, for example, would love to go and take the show there. We're in.

BRIGGS: I'm in. Let's take the show on the road.

ROMANS: Erin, thank you.

BRIGGS: The world needs some love right now.

ROMANS: All right. Erin, thank you so much.

Fifty-seven minutes past the hour. Smoking volcano on Bali halting flights to and from the Indonesian island for another day. More than 50,000 domestic and international passengers have already stranded. Fears of another larger eruption from Mt. Agung have prompted widespread evacuations from the area around the volcano. Nearly 30,000 people have left since it began erupting on Saturday, spewing clouds of ash reaching as high as five and a half miles. Authorities remain on the highest alert level possible in anticipation of more activity.

Let's get a check on CNN "Money Stream" this morning. Global stock markets are mixed today after Wall Street ended flat. Yesterday was a good day for retail stocks, especially online retailers.

Look at Amazon. It crossed $1,200 a share, Dave, for the first time. Close the just below that. It's up more than 60 percent this year, making Jeff Bezos even richer. Online sales hit record highs on both Black Friday and Cyber Monday -- a strong start to the holiday shopping season.

Today, Wall Street is watching Jerome Powell's nomination hearing. He is President Trump's nominee for Federal Reserve chief and for any movement on tax reform as well. That Senate vote is set to vote this week. The president encouraged Republican senators in a tweet to give us the much needed tax cuts. President also cheered strong new home sales and more stock market gains.

It is true, the economy is doing very well and it is happening on Trump's watch. It's also many of these trends began before he became president. It's also true it was the biggest Cyber Monday in history, the largest

single day of on line sales ever for American shoppers. Americans spent $6.6 billion online yesterday. That's according to Adobe. Adobe tracks online shopping.

And it is more than $1 billion higher than last year. This year, online sales included tablets and smart phones, not just desktop. In fact Americans made $1.6 billion in purchases on their phones. That's also a record high. Adobe predicts this holiday season is on track to break $100 billion in online sales. Remarkable.

Facebook is now using AI to prevent suicide. Artificial intelligence will identify post, videos and Facebook live streams containing suicidal thoughts. It will then assign a team at Facebook to review the posts. Facebook may send users helpful resources or first responders if an immediate intervention seems necessary. Facebook has been testing this technology since March. Remarkable.

BRIGGS: You made any Cyber Monday purchases?

ROMANS: No.

BRIGGS: I helped Amazon stock I think.

ROMANS: You do?

BRIGGS: My family contributed to that surge.

ROMANS: I was too busy. I think there will be sales throughout the holiday season. Retailers are -- some of them are in trouble. I think there will be no sales.

BRIGGS: Yes.

All right. EARLY START continues right now with a pivotal day for the Republican agenda.