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U.S. Senate Passes Republican Tax Reform Bill; Flynn Pleads Guilty to Lying; Prince Harry and Meghan Markle Make First Royal Visit. Aired 2-2:30a ET

Aired December 2, 2017 - 02:00   ET

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


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SEN. ORRIN HATCH (R), UTAH: It's a great achievement and I'm grateful to everybody here.

UNIDENTIFIED MALE: Lisa.

SEN. LISA MURKOWSKI (R), ALASKA: Well, Mr. Chairman, Orrin, thank you for your leadership on finance and in tackling Title I. Incredibly important for our country when we think about the growth opportunities that now stand before us.

I was proud to be able to shepherd Title II, five pages of your provisions, sir --

(CROSSTALK)

MURKOWSKI: -- but a measure that has been an issue now for even longer than the last rewrite of tax reform. We've been trying to open the 1002 area for responsible oil and gas production for close to 40 years now. And we have come to a good place tonight.

We recognize that we still have a little bit of process yet to go to get this over the finish line. But this is good for Alaska but more importantly, it's good for the country, combined with what we have done tonight with tax reform, this is truly a win for America.

SEN. MITCH MCCONNELL (R), MAJORITY LEADER: We'll take a couple of questions and then I assume you all will have to file your stories and go to sleep.

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MCCONNELL: Yes.

UNIDENTIFIED MALE: Leader McConnell, I just want to ask, the legislative victory obviously is important. But you have got a lot of criticism for the process, the fact that the bill, the substitute amendment, wasn't out until 8:30 pm; the fact that things were written in the margins.

Is this how you envisioned passing such a large legislative process? SEN. MITCH MCCONNELL (R), MAJORITY LEADER: This was done through regular order. The Democrats had plenty of notice. Chairman Hast (ph) can attest to all of multiple hearings, markups, open amendment process.

Everybody had plenty of opportunity to see the measure. You complain about process when you're losing. And that's what you heard on the floor tonight.

Yes?

UNIDENTIFIED MALE: Senator McConnell, can you talk to us a little bit about the evolution from last December and over the summer, when you talked about a revenue neutral bill. There's been a lot of talk about that. (INAUDIBLE).

SEN. MITCH MCCONNELL (R), MAJORITY LEADER: Yes, I'm totally confident this is a revenue neutral bill and I think it's going to be a revenue producer. As we've said over and over again, the $1.5 trillion deficit only -- to be filled only requires us to grow 0.4 percent over the next 10 years. Goodness gracious, that's very much achievable.

I'm totally convinced this is a revenue neutral bill, actually a revenue producer bill that will get America moving again.

Good night, everyone. See you soon.

CYRIL VANIER, CNN ANCHOR: You have just been listening to the Senate majority leader Mitch McConnell. And just the looks on the faces of the speakers there, Mitch McConnell, Orrin Hatch, Lisa Murkowski, in such stark contrast with the looks on their faces after the health care vote.

And the multiple failures on the floor of the House, on the floor of the Senate, on the health care bill. If you're just joining us, this may be one of the best days so far in the Trump presidency, at least on this side of things.

So this is what just happened. The Republicans have passed through a bill that will overhaul the American tax code, something that hasn't been done in 30 years and something crucially that was promised by the president, Donald Trump, all throughout his campaign.

We're joined by CNN political commentators John Thomas, Dave Jacobson. John is a Republican consultant, Dave is a Democratic strategist.

Gentlemen, I know you both heard that. And one of the interesting things to me or one of the amusing things is Mitch McConnell was saying, you have to file your stories now and go to sleep, he was speaking to the journalists. I think it's already a tale of two stories.

When I was listening to both of you describe this just minutes ago, Dave -- sorry, let me start with John.

John, is there any cloud on the horizon as far as this tax reform is concerned right now or is it a 100 percent victory?

JOHN THOMAS, CNN POLITICAL COMMENTATOR: I think it is a big, beautiful tax cut and a victory for the Republicans, I really do. Remember, pressure was mounting as we were marching toward the midterm election to deliver a win.

Check, the president can take credit for that. He was not just involved in crafting this but he was involved in selling this. So it got through.

And now look, as much as I know my frenemy, Dave, is going to disagree with me here, it's time to watch what happens. The stock markets have been hitting all-time highs and I think it's because markets are --

[02:05:00]

THOMAS: -- forward looking. And the markets were anticipating that this tax cut would get through and they were shooting to the moon on that expectation.

So now we'll see if the economy doesn't don't to grow, then Dave is going to have a great narrative against us. But if it does grow and I think it will, Dave is not only going to be eating humble pie but the Republicans are going to keep the majority and Trump will get four more years.

VANIER: All right, John Thomas, Dave Jacobson, we'll return to you in just a moment. We'll take a break.

For our U.S. viewers, back to regular programming now. We'll see you after this.

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UNIDENTIFIED MALE (voice-over): This is CNN breaking news.

VANIER: Welcome back. Donald Trump it seems is on the verge of gaining a major legislative accomplishment, the first of his presidency, with Republican senators who have just pushed through a reform of the tax bill, of the tax code here in the U.S., something that hasn't been done in 30 years.

Following this for us is Phil Mattingly at the U.S. Congress.

Phil, you were listening to Senate majority leader Mitch McConnell, who has been spearheading this effort for the last couple of weeks.

Can you just tell me about the mood?

Were you able to read the mood?

Because looking at them from just the TV screen, I could see the faces were very relaxed and different from what I saw after the failed attempt at health care reform.

PHIL MATTINGLY, CNN CORRESPONDENT: Yes, look, I think everybody's tired. That's for sure.

VANIER: Yes, it's 2:00 am on the East Coast.

MATTINGLY: There's a palpable sense not just of accomplishment. Senate majority leader Mitch McConnell started the press conference by saying we think this is a great day for America. That's truly the case. But I do think you're right. There's a sense of relief here, as well.

I think there's a ton of pressure on Republicans to produce something. We talked before the bill passed about the high expectations that they hadn't reached up to this point and the idea they've gotten here on this big issue, that they had a cornerstone domestic legislative achievement that was just a couple steps away from being signed into law. I think there's a real sense of relief.

You have to think about it. Republicans control the House. They control the Senate. And they control the White House. That's all the levers of power that can actually move things forward policy wise in the country outside of the judiciary. And they have not been able to produce when it comes to major legislative achievements.

If you can't produce when there's legislative achievements, there's only so much you can do through the executive branch, through the phone and pen strategy of the president.

So their ability to get something done and not just anything but this cornerstone achievement, relief is a good word. Real palpable enthusiasm that they accomplished it, that they got it done and that they are so close right now to the finish line of actually getting this to the president's desk.

There's no question about it, that's where senators are right now in the Republican Party.

VANIER: Phil, I want to explain to the international audience who may be thinking, what's the big deal? We just reformed -- the Americans just reformed the tax code. This is something that happens pretty routinely in other countries. And you're telling us it hasn't happened in 30 years here.

So --

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VANIER: -- how big is this?

And why is it so difficult to do?

MATTINGLY: You know, I think to put it in perspective, both parties as kind of ideologically split as they are right now and perhaps as far as into their respective corners as they are right now, have tried for years to reform the tax code. Both parties acknowledge the U.S. tax code, last reformed in 1986, is outdated. The corporate rate far too high, the U.S. corporate rate at 35 percent is one of the highest in kind of the current world, at least in terms of diversified economies right now.

So changing that, moving that forward is a huge deal. And you think from both a domestic and from an international perspective, if you're a multinational company, if you are a domestic shop, if you are a small business, if you are an individual at any level of income, this affects you.

You don't get a lot of legislation that literally affects everyone and everything and how they do their life. There's a lot of the impact that I think people are very cognizant of. You have to look at it from the perspective of why this has failed so often over the course of the last three decades.

You have very powerful interests who have very crucial loopholes or carveouts or special interest entities within the U.S. tax code that have successfully been able to stop, block, get in the way of all of the efforts from both parties to do this over the last couple decades.

Somehow, someway, despite all of the naysayers, of which a lot of us can be counted in that group, Republicans were able to do it. Not just do it over a period of time, they made this happen in a series of weeks. Something that nobody felt was possible, something nobody thought the pledge they would get this done by Christmas, by the end of the year, it was laughable at various points of this year, particularly given their lack of legislative accomplishment.

They're right on the brink right now. That underscores how big of a deal this is from the tax side, from the policy side, from the politics side across the board for Republicans, this is a very, very monumental moment for this year, for this time, for this presidency and for this Congress.

VANIER: Phil Mattingly, it's just past 2:00 am on the U.S. East Coast. Thank you very much. I hope you get some sleep tonight. I do hope we speak to you again before that happens. Phil, thanks a lot for covering this for us.

You've heard us saying over the last 30 minutes this may be one of the best days in the Trump presidency so far. Here's what's amazing about this day of news, it's also one of the worst days in the Trump presidency so far.

The investigation into Russia's election meddling is now zeroing in on the Trump White House. Former national security adviser Michael Flynn pleaded guilty on Friday to lying to the FBI. Flynn, who was fired by the president in February, also confirmed he's now cooperating with investigators.

Flynn is the fourth Trump campaign official to be caught up in the investigation so far and he's the second to plead guilty. He may not be the last, though. Flynn revealed he was in constant communication with other members of the president's inner circle while he was talking with the Russians. Here's the latest with CNN's Jim Sciutto.

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UNIDENTIFIED FEMALE: General Flynn.

UNIDENTIFIED MALE: General Flynn.

JIM SCIUTTO, CNN CHIEF U.S. SECURITY CORRESPONDENT (voice-over): The ongoing Russia investigation has reached President Trump's innermost circle. Trump's former national security adviser, Michael Flynn, says that is he cooperating with the special counsel's probe into possible cooperation between the Trump campaign and the Russian government.

Flynn pled guilty to repeatedly lying to the FBI, including making false statements about his December 2016 conversations with Russia's then ambassador to the U.S. Sergey Kislyak. 7 According to the statement of offense, Flynn lied when he told the FBI he did not discuss sanctions with Kislyak. On the same day that President Obama expelled Russian diplomats from the U.S. and boosted sanctions on Moscow in retaliation for Russia's meddling in the presidential election, Flynn also sought Russia's help during the transition to block a U.N. Security Council vote that the Obama administration was abstaining on.

The White House said, quote, "Nothing about the guilty plea or the charge implicates anyone other than Mr. Flynn."

However, court documents make clear that Flynn was not acting alone. According to prosecutors, Flynn communicated with senior members of the president's transition team about the conversations and, in at least one instance, was directed by transition officials reach out to Russia.

CNN has learned that the president's son-in-law Jared Kushner is the very senior member of the presidential transition team identified in court documents. Kushner directed Michael Flynn to contact the Russian ambassador and other countries regarding the U.N. Security Council vote on Israeli settlements, this according to sources familiar with the matter.

Flynn's guilty plea belies President Trump's repeated denials of any contact or involvement between his campaign and Russia.

SCIUTTO: In your view, has the president lied about what communications his --

[02:15:00]

SCIUTTO: -- team had with Russia?

REP. ADAM SCHIFF (D-CALIF.), MEMBER, HOUSE INTELLIGENCE COMMITTEE: Well, abundantly. And frequently and in about just about every way. But most significant in denying that this happened, saying it's a hoax.

SCIUTTO (voice-over): After the court proceeding, Flynn went immediately to the home of his son, Michael Flynn Jr.

SCIUTTO: Michael Flynn Jr. is central to Michael Flynn Sr.'s thinking in this case. We reported recently that Flynn senior was concerned about the legal jeopardy his son might face. He is not mentioned, not charged in any of these documents and it certainly raises the question as to whether cooperation from Flynn was in exchange partly for protecting his son -- Jim Sciutto, CNN, Washington.

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VANIER: We're joined by CNN political commentators John Thomas and Dave Jacobson. John is a Republican consultant. Dave is a Democratic strategist.

Gentlemen, what a day in news. We're looking at what is possibly simultaneously the best and the worst day of the Trump presidency.

First of all, Dave, would you actually agree with that statement?

DAVE JACOBSON, CNN POLITICAL COMMENTATOR: Look, I think this is the first legislative -- I'd say semi-win, right, because he still has the reconciliation process when it comes to the House GOP tax bill.

But this was the first sort of movement that we've seen legislatively for the Trump administration. Of course, I definitely agree with you that this was a very, very bad when to the Russia scandal.

VANIER: John?

THOMAS: Obviously we agree on the win on the legislative victory. But yes, obviously it's never a good day when we're talking about Mueller and distracted about this stuff.

But what's interesting to me about the Flynn situation here is that it didn't prove there was any collusion. So any collusion at this point is just us speculating. And it also almost in a way exonerated the Trump campaign from the collusion argument because the conversations that Flynn had with the Russians were after the election.

VANIER: You're going to have to just explain that a little bit more.

THOMAS: Sure. Well, in the court document, it was revealed that the conversations that Michael Flynn had with the Russians --

VANIER: No, John, sorry. I understand what you're saying, that the conversation happened after the election.

How does -- my question is how does that exonerate the White House from any potential collusion argument?

I just don't get that.

THOMAS: Because it was days before being sworn in and the argument, as I understand it, is that the campaign itself colluded to rig the election to swing it to Donald Trump. Well, if the conversation was held after the election, how could they have colluded to rig the election?

VANIER: This is a step in the process though.

Dave, maybe I'll let you pick this up.

But, John, this is just a step in the process. Nobody is saying the investigation is over and we have a final verdict. We're just saying now Bob Mueller has a big fish that he's clearly leaning on to get at other things or possibly other people.

THOMAS: Well, that may be true. But as it relates to what we know about Flynn, he pled guilty to lying to the FBI about his conversations with the Russians and that conversation occurred in December after the election.

So of course, maybe there are other fish out there. I can't speak to that. But as of what we know today, if we all know is today here was no collusion.

VANIER: Dave, that's the White House's argument.

JACOBSON: Well, I beg to differ. I think it's clear that Michael Flynn got the squeeze. And he's starting to talk obviously. And clearly he got a minimal charge today and pled guilty to that.

I think, look, I'm not a prosecutor but I think it's clear that he did this because and Mueller did this because they wanted to go up the food chain, whether it's Jared Kushner, perhaps Vice President Mike Pence or even all the way to the president, Donald Trump.

But I think the fact of the matter is, this is escalating and it's intensifying at a very rapid clip. It also begs the question of perhaps why the Senate GOP sort of moved forward on this power grab in the middle of the night, shepherding through a 500-page piece of legislation on a Friday evening at 2 o'clock in the morning on the East Coast. Perhaps they think that Mueller's about to drop the hammer with additional information.

Perhaps people who are currently serving in the White House like Jared Kushner and Republicans on Capitol Hill felt like the clock is ticking and they have no more time if they want to get at least one thing done before perhaps Trump goes down in some meaningful way, they have to spearhead this through the Congress.

I think the fact of the matter is, there's no denying, this is escalating at a --

[02:20:00]

JACOBSON: -- very rapid clip and there's a lot of unknowns still out there. But it's clear that Michael Flynn is going to continue to participate and one can suspect that that means there's others that Mueller is going to go after that higher up on the food chain.

VANIER: Just to both of you, I'd like our international viewers to understand how significant it is, going back to the tax side of things now, the tax reform side of things, how momentous it is for the Trump presidency to have been able to do this.

How much of a political win, how long is he going to be able to use this?

And how many potentially Republican electoral seats is he going to be able to save or help just with the news of this tax reform -- John.

THOMAS: Let's just look at the political realities of the tax reform. The areas that it does hurt, that people who will see their taxes increase, are largely on the coasts, in states that have high local and state taxes, now they can't deduct those from their federal return.

For instance, I'm one of those people in California. But politically speaking, the coasts did not vote for Donald Trump. So the people that this will help the most are the voters that voted for Donald Trump and Trump needs to hold in the midterms.

That's why this is such a spectacular win for the president and at the time when, look, if they couldn't get tax reform done, something -- Republicans, in this climate universally agree on, needed doing, then what reason would the Republican base have to show midterms?

VANIER: John, Dave, thank you so much for you insight this evening. Thanks a lot. We appreciate it.

VANIER: And for more --

UNIDENTIFIED MALE: Makes sense.

VANIER: -- yes, absolutely.

And for more on how Russia is responding to the news of the Flynn plea deal, let's go to Clare Sebastian in Moscow and get the Russian perspective.

Clare, what are you hearing from Russian officials?

CLARE SEBASTIAN, CNN CORRESPONDENT: Cyril, very little so far when it comes to an official response. The Kremlin has yet to respond to our request for comment on this. The foreign ministry spokeswoman in a text message to me last night, simply saying what has this got to do with us?

An interesting echo there of the White House response to this. It should be noted that when it comes to the contacts between the former Russian ambassador to Washington, Sergey Kislyak, and Michael Flynn, the Kremlin and Sergey Kislyak himself have maintained that sanctions didn't come up.

We have no suggestion as yet that they are prepared to change that story. But we have had a couple of prominent Russian politicians come out since those revelations yesterday, one in particular in the last couple of hours, Aleksey Pushkov, taking to Twitter. I'll just read you what he wrote. He said, "In the U.S., they continue to inflate a quote, 'sack of

smoke,' with Manafort and Papadopoulos. Nothing came out. Now they are hyping the no less empty Flynn case."

Of course, empty is perhaps a slightly disingenuous way of describing this because if Flynn's testimony is to be believed, then his conversation with Kislyak actually altered the course of Russian foreign policy when it comes to convincing them not to retaliate to those sanctions imposed by the Obama administration.

Russia perhaps calculating that, because it didn't retaliate, that the Trump administration would lift sanctions. That calculation, we now know, has spectacularly backfired; not only has the U.S. now passed a bill to impose new sanctions but Russia did eventually retaliate in August, dramatically reducing the size of the U.S. diplomatic presence in Russia.

So it may well be in Russia's interest, given that, to stay silent on this -- Cyril.

VANIER: Clare Sebastian reporting live from Moscow on a Russian perspective on this. Thank you.

And still to come on the show, also happening around the world, the first of many official outings to come for Prince Harry's American fiancee. A royal welcome for Meghan Markle -- coming up after the break.

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VANIER: Welcome back.

In Britain, a royal union is capturing the imagination of a nation. Prince Harry and Meghan Markle made their first joint royal visit today just days after their engagement. The debut wowed local crowds in Nottingham, England. Our Erin McLaughlin was there.

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ERIN MCLAUGHLIN, CNN CORRESPONDENT: People here are so excited to see Prince Harry and his new fiancee, Meghan Markle. They're literally lining the streets of Nottingham to catch a glimpse of the happy couple.

The couple is here to raise awareness of an issue that was very close to the heart of the late Princess Diana, tackling the stigma of HIV/AIDS. It is very clear that Prince Harry and Meghan hope to use the tremendous amount of publicity that was generated by news of their engagement to shine the spotlight on causes and issues important to them. (BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: My hands and Prince Harry with his tongue out at me, it's a pretty cool photo. And it's -- I was shocked. I didn't expect him to shake my hand.

MCLAUGHLIN: What does it mean to you that an American is joining the royal family?

UNIDENTIFIED FEMALE: It's absolutely wonderful. We Americans absolutely adore the royal family the way it is. I mean, all over the news, it's always about the royal family anytime anything happens. So it's absolutely amazing. To be here while it's happening, like I'm going to be here for the royal wedding and here for the royal baby.

It's kind of a dream come true.

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MCLAUGHLIN: This is Meghan Markle's first day on the job. She's giving up a successful acting career to focus on royal engagements such as this one. She says she's excited about this new chapter in her life. And as you can see, the crowds just love her -- Erin McLaughlin, CNN, Nottingham.

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VANIER: OK. That's it from us for now. Thank you for watching CNN NEWSROOM. I'm Cyril Vanier. I'll be back with the headlines in just a moment as always. So stay with us.