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Senate Tax Bill; Dems Drop out of Meeting; North Korea Closer to Nukes; Trump On Capitol Hill. Aired 1-1:30p ET

Aired November 28, 2017 - 13:00   ET


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.

ANNOUNCER: This is CNN breaking news.

BLITZER: We begin with breaking news on two fronts. First, just 10 days before the deadline to avoid a government shutdown here in Washington and leaders in Washington can't even get in the same room, much less on the same page.

President Trump arriving on Capitol Hill just moments ago. He's there to push the Senate tax bill as his fate hangs in the balance.

Later today, he was scheduled to meet with Republican and Democratic leaders over at the White House. But the Senate minority leader, Chuck Schumer, the House Democratic leader, Nancy Pelosi, pulled out of today's meeting at the White House after the president tweeted this, quote, "Meeting with Chuck and Nancy today about keeping government open and working. Problem is they want illegal immigrants flooding into our country unchecked, are weak on crime and want to substantially raise taxes. I don't see a deal." Close quote.

Our Congressional Correspondent Phil Mattingly is joining us from Capitol Hill. Phil, there's lots to discuss. But, first of all, the White House and the Republicans, they're responding. What do they say?

PHIL MATTINGLY, CNN CONGRESSIONAL CORRESPONDENT: Yes, the White House referring to this as pettiness. Republican leaders saying that there is going to be a meeting and Democrats need to be here.

Look, this is supposed to be a crucial meeting. There are no shortage of complex and complicated issues that all need to be wrapped up within the next couple of weeks.

Well, at this point, it's evolved into a partisan fight. I want to read you the joint statement from Speaker Paul Ryan and Senate Majority Leader Mitch McConnell responding to Democrats deciding to pull out of that meeting.

They say, quote, "We have important work to do and Democratic leaders have continually found new excuses not to meet with the administration to discuss these issues. Democrats are putting government operations, particularly resources for our men and women on the battlefield, at great risk by pulling these antics. There is a meeting at the White House this afternoon, and if Democrats want to reach an agreement, they will be there."

Well, Wolf, as it currently stands, they will not be there. Senate majority -- Senate Minority Leader Chuck Schumer taking to the Senate floor to attack President Trump and that tweet and the negotiations, in general.

I think, when you pull back a little bit, Wolf, the key issue here is who everybody wants to negotiate with. Democratic leaders have made it clear, I'm told behind the scenes, that they want to negotiate one to one with Republican leaders on Capitol Hill.

They don't want the administration involved. They don't necessarily trust the administration on this issue. And they want it to be a Congressional negotiation, not one that includes the White House.

The rub here on that is this. Republican leaders need the president to sign off to be able to move forward on these issues. Whether it's a spending bill. Whether it's a supplemental package for disaster relief. Whether it's some type of fix on the DACA issue right now.

President Trump is going to have to sign off on something for Republicans to get in line and move something forward. Republican leaders know that. The White House know that -- knows that.

And that's where the difficulty lies right now. Democrats very clearly -- they've made it clear, over the last couple of weeks, feel like they have leverage in these negotiations. They're starting to try and push on that right now.

The big question now is -- given how tight the deadlines are, how complicated the issues are, they appear to be further apart than they've ever been, at least on the leadership level. How does that reflect, on the staff level, where they've been working very hard behind the scenes to try and negotiate the specifics of these deals over the last couple of weeks? It's anyone's guess.

The reality, Wolf, the leaders were going to have to come in and hammer out the final details of this. And, as of this moment, they're not even meeting.

BLITZER: Yes, it's pretty extraordinary. The Democratic leaders scheduled only a couple hours before to go to the White House and meet with the president of the United States. But, after his tweet, they canceled that meeting. It is an extraordinary moment.

On the tax bill right now, at least 10 Republican senators, Phil, they have serious concerns about the bill. It would only take one Republican no vote in the Senate Budget Committee to keep it from moving forward.

And it looks like Senator Ron Johnson of Wisconsin, he's the senator to watch in the coming hours. Explain why his vote could prove to be so important.

MATTINGLY: Yes, no question about it. Look, the Senate Budget Committee, Republicans hold a one-seat advantage. It's a 12 to 11 majority. If just one senator votes against this proposal, it would stall it out, at least for the moment.

While Senator Ron Johnson is on that committee and Senator Ron Johnson has made very clear, he has specific demands and they haven't yet been met by leadership.

Now, here's his issue right now. It's about what's called pass the (INAUDIBLE.) Essentially, business entities, like s corps, partnerships, LLCs, that pass through their business income to the individual side, pay individual rates.

Now, Wolf, in both the House and the Senate, there is a significant cut in place to those rates, trying to make it a lot easier for those individual -- or for those entities to pay taxes. The issue right now is Senator Johnson wants that cut expanded and to be more generous.

The problem with that request is that costs money, significant amounts of money, potentially more than $100 billion. Because of the budget rules, Senate Republicans don't have that kind of space to work with, on one side of things.

On the other side of things, it also runs head long into the other issue leaders are having a problem with right now. The deficit hawks adding more money to a plan that already costs $1.4 trillion could risk alienating people like Senator Bob Corker, Senator Jeff Flake, Senator James Langford.

[13:05:11] Those individuals don't want this plan to add to the deficit in the long term. So, what you have right now, Wolf, is GOP leaders trying to figure out how to assuage the concerns of both sides that are really contradictory to one another. And they need to do it in a short clip.

Obviously, President Trump meeting with Republicans behind closed doors right now. There is some hope that maybe he can get Senator Johnson over the finish line.

But as it currently stands, this Budget Committee markup is scheduled for 2:30 p.m. Senator Johnson going into that meeting was still a no. Republicans still planning to move forward. Something is going to have to give. We'll have figure out soon what it actually is -- Wolf.

BLITZER: Well, very quickly, Phil, if they're -- if they are not guaranteed to win the Republicans, will there still be a vote?

MATTINGLY: It's an open question.

Look, last night, the frustrations on both sides were so stark that they were willing to move forward on both fronts. Senator Johnson willing to vote no and sink it. Senate Republicans leaders saying, look, we'll call your bluff on this. We want to move forward. This plan needs to move forward. If you look at the deadlines that they're looking at overall, on the things like the spending packages, they don't have a lot of time to extend this tax effort out right now. That's why they want a solution here.

As of now, the markup is still scheduled. The vote is still scheduled. We'll see if that changes. But, at this moment, it looks there's going to be some kind of clash here in a couple of hours -- Wolf.

BLITZER: All right, we'll see what happens. We'll stay in close touch with you. Thanks very much. Phil Mattingly up on Capitol Hill.

Let's bring in our panel to discuss. We have our Chief Political Analyst Gloria Borger with us and Political Congressional Reporter Rachael Bade is with us as well.

So, Gloria, first of all, what do you make of this extraordinary decision by the Democratic leaders in the House and Senate to pull out of a scheduled meeting at the White House with the president of the United States to discuss avoiding a government shut down in the coming days?

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: I don't know if anybody has ever refused to meet in the board room with Donald Trump before. And I think this really may be a first.

And I think it's evidence of their frustration with him and their reaction to the tweet this morning. Which -- you know, in which he said, look, I don't really want a deal. And he said, I don't see a deal. They just want to raise your taxes. They just want to let illegal immigrants into this country unchecked.

And I think there was a sense, as Chuck Schumer outlined on the Senate floor, that, kind of, what's the point of dealing with this guy? We have to deal with the leadership in the -- in the House and the Senate.

And I think it's, really, just one way to get under his skin, to tell him they don't -- you know, he doesn't run them. And that, you know, they'll meet him, somewhere along the line, but they don't want to be insulted by him anymore. They don't have to do it.

Whether this is a good idea is another -- is another question, Wolf, because they could look as childish as he is. But, right now, they are basically saying, go meet with your Republicans. And when you need us, come to us.

BLITZER: It's very interesting. In a joint statement, Rachel, Senator Schumer and Congresswoman Pelosi, they said this, and I'll put it up there.

You see it. "Given that the president doesn't see a deal between Democrats and the White House, we believe the best path forward is to continue negotiating with our Republican counterparts and Congress instead. We don't have time to waste in addressing the issues that confront us."

So, how difficult does this make the possibility of avoiding a government shutdown over the next couple of weeks?

RACHAEL BADE, CONGRESSIONAL REPORTER, POLITICO: Oh, it certainly doesn't help it, right? We're running out of 7time. December 8th is going to be here before you know it.

And Democrats say they are going to withhold their votes for a spending deal to keep the government open, unless they address DACA which is the key issue here.

Republicans do not want to do a DACA deal with the spending negotiations, because they know it -- Democrats have the upper hand in this. And they're worried that they're going to have to agree to something that their base will totally balk at and come after leadership after -- if they do something like this.

I do think it's interesting though. I know that some conservatives are actually pretty happy that this meeting didn't happen. Because they're worried that President Trump would actually give Democrats exactly what they want on DACA.

You know, just a couple of weeks ago, the president had this tentative outline that he agreed to with Pelosi and Schumer, where he said, basically, we'll do a DACA deal. And I don't need the wall to be part of it. Republican leaders had to call him and get him to walk it back.

And we saw him, you know, putting up some tough talk this morning on Twitter. And I know people have been calling the White House saying, President Trump, please do not do this. Do not cave to the Democrats on this issue.

But now, they're not even going to be in the room together so there's no fear I guess, amongst conservatives that today he's going to cave on DACA.

BLITZER: Yes, it is pretty extraordinary, when you think about it.

Gloria, as you see, the president now up on Capitol Hill meeting with Senate Republicans. He's pushing the Republican tax plan. He's been working the phones.

[13:10:00] But he also has been a distraction with some of his disparaging comments. Pocahontas, for example, at an event honoring native-American war heroes yesterday. What do you make of his role in this push for tax reform?

BORGER: Well, he can't get out of his own way. It always occurs -- it occurred with health care reform. It's occurring with tax reform. Because he can't stay focused on one issue at a time.

And so, he did the Pocahontas thing this morning. He insulted the Dems -- I mean yesterday. He insulted the Democrats this morning. And he can't seem to get out of his own way. I talked to one Republican the other day who said that honestly, the president is more engaged on the tax issue than he was on the health care issue because it's an issue that he understands. But he also understands whom it's going to benefit.

And if you look at the, you know, analysis by the Congressional Budget Office, et cetera, on we've been talking about these pass-throughs which Senator Johnson, for example, wants changed. The money from that flows to the top 1 percent of people in this country. Some of them are small business owners, yes. Some of them are lawyers and other professionals.

And so, every time they make a change in this tax bill, you know, it's playing whack a mole. And the president, I'm told, kind of understands that. But some of these changes would also clearly benefit him and his family.

BLITZER: It's a fair point.

You know, Rachael, the Congressional Budget Office, in their report, it says that poorer Americans would lose, potentially, billions of dollars in federal benefits under the Senate Republican tax bill. Many middle-class Americans eventually would end up paying more, since most of the individual tax cuts expire after 2025.

So, how does this all square with President Trump's promises and his populous message during the campaign?

BADE: Well, it shows that they're going to be losing the messaging war on this, right? Republicans have been trying to paint this tax bill as a tax cut mostly aimed at the middle class.

But there are two tweaks that are going on in the Senate right now to this bill that will make it even harder to make that sell. The first one being giving small businesses bigger tax cuts which is something Ron Johnson of Wisconsin and Steve Gains of Montana are also pushing for, right?

But the problem with doing that is the top 1 percent comprise something like 80 percent of those small businesses. So, by giving them a bigger tax cut, you're giving more money to that top 1 percent which, sort of, undercuts that middle-class argument that Republicans are trying to make.

BLITZER: Yes, there's a lot of debate going on right now.

All right, Rachael and Gloria, guys, thanks very much. Let's take a closer look at this tax plan and what it means to you. Joining us now, Jim Tankersley. He's a tax and economics reporter for "The New York Times."

So, Jim, who benefits most from this plan and who will it hurt most?

JIM TANKERSLEY, TAX AND EXONOMICS REPORTER, "THE NEW YORK TIMES": Well, the Senate plan, like the House plan before, it really does mostly benefit -- has its predominant benefits to the people who own large corporations or in -- as we were just hearing from the panel, it's now getting expanded benefits for people who own small businesses or other pass-through entities.

Look, as an overall share of the benefits of the plan, the plan favors the rich more. There are benefits in here, substantial benefits, for a lot of middle-class families, but because they have a lower income, that's less of a share of the bill than the benefits to the rich.

BLITZER: Some provisions in the bill, and this is a very sensitive issue, will expire after a few years after passage. For instance, the individual tax rate cuts expire by, what, 2026. Why not make them permanent, like the corporate tax rate cuts which go from 35 percent to 20 percent? Those are permanent. The individual tax rates, they are, what, for a decade, if that.

TANKERSLEY: Well, Republicans would love to make them permanent, they say. And they believe that they will be made permanent by our future Congress. But they've made them temporary now, in order to comply with these arcane Senate budget rules that Republicans are using to pass, or attempt to pass, the tax bill entirely along party lines.

So, by using the budget reconciliation process, they are able to bypass a Democratic filibuster, but they can't increase the deficit in -- after a decade. And so, they have to sunset those provisions, it's called, in order to keep from losing money, down the line, in a way that would make the bill not qualify for the budget reconciliation rules.

BLITZER: Well, why not sunset the corporate tax rates for 10 years, let's say, see if they'll be extended, but keep the individual tax cuts permanent?

TANKERSLEY: Well, the idea there is entirely born from the way conservatives see the economy. The way that they see tax policy is you need to give investment certainty for companies, and that's what will drive economic growth.

And the entire plan for Republicans comes back to this promise that cutting those rates, particularly corporate tax rates, is going to unleash a lot stronger growth.

[13:15:02] But you get much smaller growth effects in most economic models, if tax cuts are temporary. Because companies can't plan and so they -- that uncertainty holds back their investment decisions. So this is --


TANKERSLEY: This is what Republicans are doing. They're making a big bet on their view of how economic growth happens.

BLITZER: And the president, he made it clear during the campaign, he wanted the corporate tax rate to go from 35 percent to 15 percent. He's now settled at 20 percent, but he says it's not going to go higher than that.

Jim Tankersley, thanks very much for that analysis.

Also today there's new developments in the Russia investigation. The president's son-in-law may be compelled to give more testimony over a spat between Senate investigators. We have new information for you on that.

Plus, former President Obama announcing an international tour during which he'll hold some rather interesting meetings. How will the current president react?

And Senator John McCain blasting President Trump for calling a U.S. senator "Pocahontas" at an event honoring Native American heroes. Why the White House says it wasn't a racial slur.


[13:20:28] BLITZER: We're following breaking news from Capitol Hill as the president meets with Republican senators right now on the tax bill. Top Democrats have pulled out of their scheduled meeting over at the White House later this afternoon after the president insulted them on Twitter.

Joining us now, Oregon Democratic Senator Jeff Merkley. He's a member of the Senate Budget Committee, joining us live from Capitol Hill.

Senator, let me ask you about this decision by Chuck Schumer and Nancy Pelosi, the Democratic leaders in Congress. They were scheduled to meet with the president and the Republican leadership over at the White House to discuss ways to prevent a government shutdown. The president tweeted this, meeting with Chuck and Nancy today about keeping government open and working problem is they want illegal immigrants flooding into our country unchecked, are weak on crime and want to substantially raise taxes. I don't see a deal.

As a result of that, they said it's a waste of time to go over there. They're not going. Your reaction?

SEN. JEFF. MERKLEY (D), OREGON: Well, they made absolutely the right decision. In order for there to be a sincere effort to work together, you have to have sincerity on behalf of both parties. And we certainly don't have that here. The president has made up his mind, he wants to politicize this process rather than having productive dialogue. And so I think the leadership was right to send the message, we're ready when you're ready to have a real productive, authentic dialogue.

BLITZER: Yes, I don't remember a time -- maybe you do -- when a president -- sitting president of the United States invites the opposition leadership over for a meeting at the White House and they say -- they say they're not going. I was the White House correspondent during the Bill Clinton administration. Even during the height of impeachment, when he invited Newt Gingrich, the speaker, over to the White House, Newt Gingrich always went and the Republican leadership always went, even if they were in the opposition. So it is pretty extraordinary. But give me your assessment.

MERKLEY: Well, but in that case, you didn't have the president insulting them right before they were to arrive at the White House. And so therefore, when there's always an opportunity to have a real dialogue about how we can forge a path that makes sense, then that's good. But if the president's unprepared to do that and he just wants to turn this into a political show, they're not going to -- our leadership isn't going to play that game.

BLITZER: But isn't it critically important for there to be this dialogue to avert a government shutdown in early December when spending runs out? You need bipartisan cooperation to achieve that. So even if the president does snub and insult the Democratic leadership, shouldn't they rise above that and say, you know what, we've got bigger issues to deal with right now. We've got to deal with the Republican leadership, got to deal with the president of the United States. The country cannot afford a government shutdown.

MERKLEY: Well, we certainly can't. and if the Republicans are determined to shut down the government, then this is a good way to do it. Authentic, real dialogue, trying to find solutions. When the president's ready for that, I'm sure the leadership of both the House and Senate Democrats are ready to engage.

We have been all along. We've been sending the message time and time again. You want to have a real dialogue about how to lower corporate tax rates but close loopholes so that we don't drive up the deficit, let's have that conversation. You want to have a real dialogue about how to make the economy work better, let's have that conversation. But if the -- hopefully the president will be ready for that down the road and we've certainly been ready and making that invitation all along.

BLITZER: You're on the Budget Committee. Let's talk about this tax bill that's under consideration. Could be a vote later this afternoon. The independent Congressional Budget Office says the new tax bill would increase the federal deficit by $1.4 trillion over the next 10 years. It also says Americans earning less than $30,000 a year will be hurt almost right away, mostly with the loss of the individual mandate for health care insurance. But Republican supporters are pushing back on that. What is your take? How significant is this impasse right now and do you think your committee, the Budget Committee, later this afternoon will pass the Senate bill?

MERKLEY: So the Budget Committee simply is going to bring together the health care provisions that are being put forward. Health care provisions that would wipe out health care for 13 million people and drive up the premiums for everyone else. They're trying to merge that with the tax bill that happens technically in the Budget Committee. That's what the vote will be. It's unclear. I think it will probably be a party line vote. But there's several senators, including Senator Corker, who has said that he's not sure how he'll vote this afternoon. So we'll have to wait and see.

But the bigger deal --

BLITZER: Let me interrupt for a second. Senator Ron Johnson of Wisconsin, he's the one who everyone is watching right now because as of right now he says he's going to vote against it. There are 12 Republicans, 11 Democrats on your committee. If he votes against it, what happens then? Is it dead?

[13:25:07] MERKLEY: Well, no, nothing dies here in the -- in the Senate or the House. They just get reworked and they rise again. We've seen that on health care, for example. We kept thinking we'd put a stake through the heart of this effort to disenfranchise millions of people from being able to have health care, but the Republicans just keep bringing it back. They want to rip that health care way. They don't care that it hurts so many working families across this county. And they're trying to put it back this afternoon right into this tax bill.

BLITZER: Let me get to foreign affairs right now. You're on the Foreign Relations Committee in the Senate. I want to ask you about the latest comments coming out of South Korea where a top government official now says North Korea's nuclear program is moving much more quickly than anticipated. That the North may be as little as two years away, maybe even less, from completing their work on nuclear missile technology.

And we have just reporting also, by the way, and I thought it was significant, that Hawaii now, for the first time since World War II, is going ahead and reactivating those sirens in case of some sort of attack. What's your reaction when you hear these very worrisome developments?

MERKLEY: Well, we should be very concerned about North Korea's nuclear program. And the question is, how do we freeze it, stop it and have a dialogue that hopefully leads to denuclearization of the peninsula? And we can't do it through a -- just military threats because they have a very significant, conventional deterrence with artillery that's aimed at Seoul. Hundreds of thousands of people could die in the course of a day.

They also already have nuclear warheads. So they have a nuclear threat, even if they don't have ballistic missiles to deliver them, it doesn't mean we're completely out of the zone of risk. And so this is where a very consistent, determined policy to bring the international community together to apply the high level of pressure to North Korea necessary to freeze their program, freeze the ballistic missile program and the warhead program and bring them to the table to denuclearize the peninsula. That's what -- that's what we have to do.

BLITZER: Senator Merkley, thanks for joining us.

MERKLEY: Oh, you're very welcome. Good to be with you.

BLITZER: All eyes on Capitol Hill right now. We're about to see the president after his meeting with Republican senators, as Democrats suddenly cancel their own meeting over at the White House with the president. Will they show up last minute or is that a done deal. Stand by.

Plus, as the spotlight intensifies on fired National Security Adviser Michael Flynn, Jared Kushner may be compelled back to Capitol Hill to testify. You're going to hear why and whether his lawyers the fight it.