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NEW DAY SATURDAY

Senate Passes GOP Tax Bill After Last-Minute Changes; Russian Politicians React: Flynn Case Is "Sack Of Smoke"; Source: White House Should Be Taking Flynn News Much More Seriously; Will GOP Tax Cut Help Middle Class, Boost Jobs?; Michael Flynn Guilty Plea Raises Questions for Trump and Kushner. Aired 6-7a ET

Aired December 2, 2017 - 06:00   ET

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


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UNIDENTIFIED MALE: The Tax Cuts and Jobs Act as amended is passed.

UNIDENTIFIED MALE: This is a momentous occasion for the Republican Party.

UNIDENTIFIED MALE: It's something that literally will help millions of young people in our society.

UNIDENTIFIED MALE: Here's this bill as it's written. Here's the modifications that are in it. I can read one word, it's called add this language. Can you tell me what that word is?

UNIDENTIFIED MALE: Flynn pled guilty to repeatedly lying to the FBI.

UNIDENTIFIED MALE: This guilty plea an acknowledgement of criminal culpability is a shattering moment for the Trump presidency.

UNIDENTIFIED MALE: This is a devastating event for the White House.

UNIDENTIFIED MALE: I think we should wait until we see all the facts and the evidence before coming to a final judgment.

UNIDENTIFIED MALE: I'm going to make this plain to the CNN viewers. When a bunch of the main home boys turns snitch, a bunch of people about to go to jail.

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CHRISTI PAUL, CNN ANCHOR: Good morning. So grateful to have you here. I'm Christi Paul.

VICTOR BLACKWELL, CNN ANCHOR: I'm Victor Blackwell. Happy Saturday to you.

PAUL: So, we have breaking news on Capitol Hill as you might have caught there. Early this morning, the Senate passed its version of the major tax reform.

BLACKWELL: The vote 51-49. Every Republican except for Bob Corker voting yes and every Democrat saying no. Now, this is a major legislative win for the president and his party, but you are not waking up to changes in your taxes just yet. The House and the Senate now have to find a compromise. They have to get together in what's called the Conference Committee to reconcile their different plans.

PAUL: It's important as a victory for President Trump who promised to give Americans a huge tax cut for Christmas, and the president already is praising the vote on Twitter. Overshadowing this win though, that guilty plea by the president's former National Security Advisor Michael Flynn, who admits that he lied about his contacts with the Russian ambassador.

BLACKWELL: His plea signaling that he may flip on other members of the Trump administration. Now let's start on Capitol Hill where Republicans are celebrating this vote on taxes. Democrats are slamming the GOP for last minute changes to the bill.

PAUL: CNN's Phil Mattingly is following every detail from the Senate chamber.

PHIL MATTINGLY, CNN CORRESPONDENT: For Republicans long frustrated by the legislative process, unable to achieve a corner stone and domestic legislative achievement like the repeal and replace of Obamacare, they are now on the brink of one.

The U.S. Senate voting 51-49 to pass the Republican tax overhaul plan. That means both the House and the Senate have passed their own versions of this. It's one step closer to being signed into law, sent to the president's desk and becoming that major legislative achievement of 2017 that they've desperately sought.

Now Democrats very opposed to this plan from the beginning, unified in their opposition on the floor and furious about the process. A process that led Senate Majority Leader Mitch McConnell to know that he had the votes at 10 a.m. on Friday morning and still not releasing the bill until 8:00 p.m. later that day.

Democrats waving legislative amendments around, tax with handwriting on them making major, major substantive changes, saying they hadn't seen the bill, there hadn't been enough hearings. Well, I asked the majority leader about those complaints. Take a listen.

(BEGIN VIDEO CLIP)

MATTINGLY: Is this how you envisioned passing such a large legislative --

SENATOR MITCH MCCONNELL (R-KY), MAJORITY LEADER: This is done through the regular order, the Democrats had plenty of notice. Chairman Hatch 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. (END VIDEO CLIP)

MATTINGLY: Now, guys, that isn't the final step. The Senate still has to take another vote so does the House. Right now, the next step will be both chambers will have to reconcile their bills, which do have significant differences in various parts, but the frame work of the two is the same.

And if you talk to Republican officials at the White House, in the Senate and the House, they believe the Senate was by far the biggest hurdle. They are on the right path. It's only just a matter of time.

Now like anything else, things can spin out of control very quickly in the legislative, particularly something so complicated as taxes. However, keep in mind, they have done this, both passed the House and the Senate in a matter of weeks. It is very clear they are on the pathway to sending this to the president's desk likely by the end of the year. Phil Mattingly, CNN, Capitol Hill.

PAUL: Phil, thank you so much. CNN's Abby Phillip is joining us from the White House. Abby, it has been quite 24-hour period for President Trump. Some of the best and worst things and moments in his 10 months happening to him just within the last 24 hours.

ABBY PHILLIP, CNN WHITE HOUSE CORRESPONDENT: That's right, Christi. It's the high highs and low lows in the last 24 hours for this White House, but it's something that they're very much used to. They have gotten some really great news.

[06:05:03] I think probably the most important thing that has happened to them this year, which is finally they are getting close enough to a legislative achievement that the president can see victory on the horizon.

We know that they still have to wait for reconciliation to happen for the House and the Senate versions to come together, but White House -- this is the closest they have gotten on anything.

Remember on health care, it was failure after failure. Now the president tweeting in the wee hours of the morning just as the bill passed that we are one step closer to delivering massive tax cuts for working families across America.

Special thanks to Senate Majority Leader Mitch McConnell and Chairman Senator Orrin Hatch for shepherding the bill through the Senate. Look forward to signing a final bill before Christmas.

So, the president there praising Mitch McConnell, someone who he has not always had the best relationship with because finally, McConnell has really delivered for him. At the same time the Michael Flynn news, as you mentioned earlier this morning, is dogging this White House and it is very serious.

The White House is putting a very positive face to the public, but privately, lawyers were surprised by what they learned yesterday, and I still have to figure out what this means for the president going forward -- Christi.

PAUL: Abby Phillip, we appreciate it so much. Thank you.

BLACKWELL: Let's talk more about what this means. Here to help us break it all down, Errol Louis, CNN political commentator and anchor on Spectrum News. Errol, good morning to you.

ERROL LOUIS, CNN POLITICAL COMMENTATOR: Good morning.

BLACKWELL: All right. So, the Flynn announcement, this guilty plea really comes at a bad time for the president. I mean, on the -- within 24 hours really of the president's party getting through the only major legislative win of the year, you've got a former member of his administration pleading guilty to committing a felony while working in this administration. Give us the context of what this means for the president, this tax win and at this moment.

LOUIS: Well, the tax win is huge for all Republicans and in particular, the president. This takes for the members of Congress this takes some pressure of them. What was seen as a really tough year for them, 2018, if they didn't get something passed the tax reform in particular, well, that's happened now.

So, I think the congressional leadership is going to be very happy going into Christmas, if they can get this done, and they'll have some more confidence and a better chance at holding their majorities in Congress next year.

For the president, however, nothing is going to offset the chaos that follows now. The cloud that has now darkened and appears to have some thunder rumbling inside of it that comes with this Russia inquiry.

It's no longer something you can dismiss as fake news. It's no longer something you can call a plot by Democrats to excuse their embarrassment after losing the election. All of the different kind of excuses that the president has put up.

This is someone who was his top national security advisor who pleaded guilty in open court saying that he committed a crime and that it was related to -- well, lying about having a relationship with Russian officials.

BLACKWELL: Yes, you can't dismiss as they tried to with George Papadopoulos, dismiss Michael Flynn as the coffee boy, you can't as they tried to with Manafort, although, he was the chairman of the campaign saying that he was a short-term volunteer.

This is someone that was with the campaign and then the transition, and then part of the administration. Let's stay with this tax vote, though. I was about to say tax reform. Is this the reform that the president and the party initially set out for or is it just the cuts that the president in recent days says that he was going for?

LOUIS: I don't know if reform is the right word. It really is a cut. The reality is what's driving the entire process and what's driving the final bill or the one that passed the Senate anyway early this morning is a corporate tax cut.

Everything else kind of follows from that and so you have to tinker here and there, but it's going to reshape American life without really reshaping the tax system. The general idea was supposed to be that put more money back into the hands of Americans.

That's going to happen up and down across the board. Despite some of the overheated rhetoric from Democrats, the reality is middle class people are going to see a cut. It should be something that really stimulates the economy. The economy was already sort of picking up.

I think the president himself put it, it's going to throw rocket fuel on it. We'll see what happens. There is a day of reckoning down the road though and that's something real reform may have at least paid more attention to, which is that when some of these cuts expire, it's going to be a whole different ball game.

And there is a real question about this looming deficit and whether there's going to have to be major cuts to important entitlement programs in the future.

BLACKWELL: We're going to talk about the deficit and the estimates coming from the CBO and the Joint Committee on Taxation a little later, but I first want to talk about process and Senator John McCain back in July right before he gave that famous thumb's down for the Senate proposal for repeal and replace of Obamacare, gave this really impassioned speech on the floor of the Senate.

[06:10:00] He just returned from treatment for cancer and this is what he said about the process then. Let's watch.

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SENATOR JOHN MCCAIN (R), ARIZONA: The administration and congressional Democrats shouldn't have forced through Congress without any opposition support of social and economic change as massive as Obamacare and we shouldn't do the same with ours.

(END VIDEO CLIP)

BLACKWELL: Shouldn't rush it through something as massive as Obamacare. This is the tax system affecting everybody. The bill was introduced. People got to read it about 9:00 p.m., the vote was done by 2:00 a.m. These two don't seemed to reconcile.

LOUIS: Yes. There's a bit of an inconsistency there with Senator McCain. If it was important to have regular order and more deliberation, and a bipartisan buy-in, for once a bill that would affect one-sixth of the economy, well, this is the other five-sixth, right? This is the entire economy and he sort of went along and cast his vote.

Any two Republicans could have stopped this bill in its tracks and they chose not to do so. I think that's the political reality of it, Victor, is that, you know, for Republicans to not push for corporate tax reform, which is probably the one issue that unites all the different wings, all the different regions, all the different generations of lawmakers who are all there under the Republican banner, if they couldn't do that, they have a massive, massive political problem, and that would include Senator McCain.

BLACKWELL: Yes. Senator Bob Corker, the only Republican voting against this plan, but it's important to say that he is not running election this next time around. According to the president, he had a problem with the deficit numbers. Those estimates we'll talk about later this morning. Errol Louis, thanks so much.

LOUIS: Thank you.

PAUL: So, as we've been reporting, Michael Flynn charged with lying to the FBI, but what he tells investigators about other people in President Trump's inner circle could decide the next steps in this Russia investigation. We'll take a legal look at what's next.

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[06:16:08]

BLACKWELL: This morning Russia is reacting to Michael Flynn's guilty plea to lying to the FBI calling it a sack of smoke and empty, and labeling the Russia investigation an attack.

PAUL: But Flynn's actions could have far reaching consequences for the trump administration. Legal experts say there's much more the special counsel could have that they could have gotten actually, the former national security advisor for, but they just brought that one charge because they're hoping to get more information from him. We're going to discuss all that with our analyst in just a moment.

BLACKWELL: But first, let's take a look at what got Flynn into trouble. We'll start with CNN justice correspondent, Pamela Brown, who has that for us.

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PAMELA BROWN, CNN JUSTICE CORRESPONDENT (voice-over): President Trump's former national security advisor, Michael Flynn, arriving at a federal courthouse in Washington today before pleading guilty to lying to the FBI making him the first person, who worked inside the White House, to be charged in the Russia probe and the fourth campaign official to face charges so far.

The charge and plea agreement centered around conversations he had with then Russian ambassador to the U.S., Sergey Kislyak in December of last year. Court documents show that others on the Trump team knew of Flynn's efforts.

On December 29th, Flynn called former deputy national security advisor, K.T. McFarland, along with other transition officials in Mar- a-Lago where they discussed what to say to Kislyak about the new sanctions being imposed on Russia by the Obama administration.

According to Flynn, the transition officials did not want Russia to escalate the situation. Flynn immediately called Kislyak asking Russia not to overreact to those sanctions. Shortly after that call, Flynn briefed McFarland that he did indeed discuss sanctions with the ambassador, according to two people familiar with the matter.

But in January, then Vice-President Elect Mike Pence told the nation that Flynn assured him he did not talk about sanctions with Kislyak.

MIKE PENCE, VICE PRESIDENT OF THE UNITED STATES: They did not discuss anything having to do with the United States decision to expel diplomats or impose a censure against Russia.

BROWN: Then on December 31st, three days after their conversation about sanctions, Kislyak confirmed to Flynn that Russia had chosen not to retaliate in response to Flynn's request.

Also. today, court documents revealed another interaction Flynn had with Kislyak calling him at the direction of a quote, "very senior member of the transition about a coming U.N. Security Council vote on Israeli settlements.

Sources tell CNN that person was Trump's son-in-law, Jared Kushner. According to the filing, Flynn and Kislyak spoke about the incoming administration's opposition to the resolution and asked Russia to delay or vote against it.

CNN can also now report that there were intelligence intercepts that picked up Kushner conversations with foreign intelligence targets talking about efforts to stop the resolution according to an official briefed on the matter.

Flynn didn't respond to shouted questions when leaving the courthouse today and afterward visited his son, Michael Flynn Jr., who is also a potential target of the Russia investigation.

In a statement, Flynn acknowledged wrong doing, saying, "My guilty plea and agreement to cooperate with the Special Counsel's Office reflect a decision I made in the best interest of my family and of our country."

Last month, Trump's former campaign chairman, Paul Manafort and his deputy, Rick Gates were indicted for conspiracy to launder money among other charges. Both men have pleaded not guilty.

And Trump campaign foreign policy advisor, George Papadopoulos, pleaded guilty to lying to the FBI about his communications with Russian nationals. The White House tried to downplay the significance of the Flynn revelation today with one source close to the president telling CNN that everyone lies in Washington. President Trump has long maintained there was no collusion with his campaign and Russia.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES OF AMERICA: The entire thing has been a witch hunt and there is no collusion between certainly myself and my campaign, but I can only speak for myself and the Russians, zero.

[06:20:12] BROWN: But as the investigation intensifies so does the scrutiny on the president and his inner circle.

(END VIDEOTAPE)

BROWN: Michael Flynn and his plea agreement now faces up to five years in prison, but if he had been charged with every count of lying listed in the court documents released Friday, he could have faced 35 years in prison at least. Pamela Brown, CNN, Washington.

PAUL: Paul Callan, CNN legal analyst and former New York City homicide prosecutor with us now as well as Errol Louis who stuck around with us, CNN political commentator and political anchor for Spectrum News. Gentlemen, thank you so much for being with us.

Paul, wanted to ask you, so if Flynn testifies again that Kushner did direct him to make contacts with Russians, at that point is it -- is it not a he said, he said? What do you need to incriminate on that point?

PAUL CALLAN, CNN LEGAL ANALYST: To incriminate Jared Kushner in some sort of illegality, obviously if Flynn came in and indicated that he received illegal orders from Kushner, you could bring a case based on that. It would be a very difficult to case to win.

I don't know at this point if there's any dispute about -- between the two men about what was discussed. There was discussion involving Israeli settlements and a U.N. resolution that was pending, and that has been a pet project of Jared Kushner.

So, I suspect the two men will probably be pretty much on the same page as to what was being discussed in general with respect to that.

PAUL: All right. So, Errol, beyond that, when we look at the reach of this, how vulnerable is Kushner?

LOUIS: Well, in the report, as your report included, he was caught on intercepts having these kinds of conversations with various different people. It may seem that Jared Kushner wasn't quite aware of who was listening to some of his conversations. That's one level of just political and legal exposure.

It seems, though, also that the prosecutors are doing what prosecutors do, which is even if they don't understand the full scope of a possible conspiracy, they can figure out whether you have lied to them.

So, if Jared Kushner is consistent with all of his statements to the FBI, intelligence committees, and anybody else he's spoken with, he should be OK. It's not clear that that's the case though, because we've heard him give different versions of who he was involved in.

We've seen him have to amend and revise and update his disclosure forms. We've had him have to sort of change his story a couple of times about meetings that he had or forgot to mention. He too had one of those amnesiac episodes when it came to meeting Ambassador Kislyak.

So, if he doesn't have all of his ducks in a row, I think it's now clear the FBI or I should say the Mueller investigative committee is perfectly willing to bring charges if you lie to the FBI.

PAUL: So Paul, the connection between Jared Kushner and President Trump is a very short line?

CALLAN: Well, yes, it's a very close connection. He's is son-in-law of the president and certainly if a -- you can start to build a case against Kushner. You're getting very, very close to the president of the United States, but I have to agree with Errol that this remains to be seen as to where this goes with Kushner.

You have to remember one thing. They developed this case against general -- the general because they were eaves dropping on conversations that he had with Kislyak, the Russian ambassador, and he denied having had any conversations.

So, Kushner on the other hand has admitted to contacts. He hasn't gone into substantial detail publicly about a lot of those conversations, but I think he situation might not be as perilous as the general's.

PAUL: OK. So, I want to read something from the "Washington Post" when they were talking about this. They said "Flynn was a private citizen in December of 2016 and in Friday's guilty plea, he basically admitted he urged the Russian ambassador not to retaliate after President Obama announced sanctions to punish Russia for meddling in the presidential election.

The plea documents indicate the Russian ambassador heeded Flynn's warning." Does it sound as though, Flynn did attempt to meddle in foreign affairs as a private citizen. At the end of the day, what is the repercussion of that?

And Errol, I have to ask you, is this Logan Act, is it an outdated law or is it still purposeful here?

LOUIS: Well, the Logan Act, no one's ever been prosecuted under the Logan Act. The Logan Act is a very old law that is supposed to prohibit citizens, civilians from getting involved in diplomatic efforts on their own.

[06:25:08] And so, if you have this 18th Century law still on the books and it's never once been used to prosecute anybody for interfering with foreign policy, it's hard to imagine that this would be the one time that you would pull it out.

So, no, that's not the crux of the problem and here again, that's why I think we can expect prosecutors to stick to what they can prove. To go back to Watergate, which is one of the analogous situations we are talking about, they never found out why those burglars broke into the DNC headquarters way back in 1972.

What was really the problem was that there was all this obstruction of justice, all this lying to authorities. That's what I think the Trump White House has to be more concerned about. Are you lying about it? That can get you in a lot of trouble. PAUL: I only have a second, Paul, but that's what I was going to ask. Can Mueller use Flynn to try to prove obstruction of justice for firing Comey?

CALLAN: He most definitely can do that because remember Comey was fired after he had a discussion with the president where the president was saying, hey, can you lay off Flynn, Flynn's really a good guy.

So, one of the claims of obstruction that could be developed by the special prosecutor is that the president knew that Flynn had committed illegal acts and fired Comey to stop prosecution on those acts and that becomes close to an impeachable offense if that's proven.

So that's dangerous area. And just getting back quickly to the Logan Act thing, I think if at some point impeachment started to be a serious discussion, certainly, the Trump administration's involvement in negotiating foreign policy before he was sworn in as president would be something that would come up in connection with those proceedings.

The Logan Act remains on the books and as Errol says, it hasn't been enforced, but certainly they were trying to sabotage negotiations regarding Israeli settlements. It was sworn in.

PAUL: It is so intriguing how interconnected everything is here. Paul Callan, Errol Louis, we appreciate you walking us through it. Thank you, Gentlemen.

BLACKWELL: Well, tax cuts, the bill passes the Senate. Coming up, the next steps. Will it become the first legislative victory for the Trump era?

WHITFIELD: Also Republicans say the tax overhaul will turbo charge economic growth. Skeptics not so sure about that. We're going to take a deeper dive into how corporations are said to benefit from tax cuts and what it means for American workers.

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[06:32:15] CHRISTI PAUL, CNN ANCHOR: Always so grateful to have you with us. I'm Christi Paul.

VICTOR BLACKWELL, CNN ANCHOR: I'm Victor Blackwell. Good morning to you.

PAUL: So a 51-49 vote in the Senate gets the GOP one step closer to President Trump's promised tax cuts for Christmas. This is an overhaul that would be the first major legislative win of the Trump era. And it would fulfill a major campaign promise for the president.

BLACKWELL: But this comes right after this really crushing blow for the White House. News that former National Security adviser Michael Flynn is cooperating with the special counsel investigation. Now Flynn admitted to lying to the FBI about his contact with the former Russian ambassador Sergey Kislyak. Russian politicians say the news of Flynn's plea is just hype and they call it a sack of smoke. PAUL: The White House is distancing itself, though, from Michael

Flynn as it talks up tax reform.

BLACKWELL: And joining us now, live from the White House Abby Phillip, CNN White House correspondent, and, you know, we've seen the president's tweet about tax reform, nothing at least yet about Flynn, although if the president follows his pattern it is a Saturday morning. He will be waking up and saying something probably against the advice of all of the attorneys in the White House.

ABBY PHILLIP, CNN WHITE HOUSE CORRESPONDENT: Well, Victor, so far it's been pretty disciplined from the president on social media and that's partly because on the horizon of all this Flynn stuff has been the promise of fulfilling a real campaign pledge to his supporters on the horizon.

You know, the president and Mitch McConnell, Senate leaders really strong armed a lot of senators over the last week to vote for this bill and they succeeded in getting almost every one, except for one, Bob Corker, who has been a critic of the president and he had a lot of concerns about the bill that they tried to resolve overnight but weren't able to as this Flynn investigation continues.

It really ups the pressure for Republicans and for this White House to get this one finalized before Christmas -- Victor.

BLACKWELL: All right, Abby Phillip for us there at the White House. Thanks so much.

PAUL: Thanks, Abby.

So the president claiming that the Republican tax plan really going to help the middle class and boost that job growth we've been talking about.

BLACKWELL: CNN's Cristina Alesci breaks down what this new tax bill could mean for you -- Cristina.

CRISTINA ALESCI, CNN MONEY CORRESPONDENT: Christi, Victor, the argument that corporate tax savings will somehow flow down to the little guy is a gross oversimplification. Look, companies have had money to invest in jobs, research and plans for quite some time now but they choose for the most part to do other things with it like reward shareholders instead of reinvesting in their own businesses. Listen.

(BEGIN VIDEOTAPE)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: It reduces the corporate rate from 35 percent all the way down to 20 percent. And it provides a one-time low tax rate to return corporate money parked overseas. Trillions and trillions of dollars.

[06:35:05] ALESCI (voice-over): Republicans say that workers benefit when companies pay less tax. It will free up cash to hire employees and expand operations. STEVE MNUCHIN, TREASURY SECRETARY: Those are jobs. That's money we

want to bring back. We're going to create expensing that incentivize companies to spend capital here and create jobs.

ALESCI: But how much will the average American really benefit from corporate tax cuts? Will it really trickle down? Even executives aren't promising much. The "Wall Street Journal" asked a group of them if they'd pump more money into their businesses in front of Trump's very own economic advisor.

UNIDENTIFIED MALE: If the tax reform bill goes through, do you plan to increase your company's investment -- capital investment, just a show of hands, if the tax reform goes through? OK.

GARY COHN, WHITE HOUSE CHIEF ECONOMIC ADVISOR: Why -- why aren't the other hands up?

ALESCI: A tepid response. Considering companies are also getting extra sweeteners, including a reduced rate on trillions parked overseas if they bring that money back home. But CEOs of major companies admit that workers won't necessarily see more jobs or higher wages. At least not right away.

UNIDENTIFIED FEMALE: What about jobs and wages? Does that argument work? Is that something -- is that an area you would focus on and you would invest in?

JAMES QUINCEY, CEO, COCA-COLA: I think principally it's not our short term change. It's not like there's a big box of money out there that suddenly comes back and gets reinvested by us in 2018.

ALESCI: In fact studies show the last time there was a similar holiday on foreign profits in 2004 about 60 to 90 cents of every dollar went to stockholders, not investment. Bottom line the tax break was not an effective way to grow the economy, according to the Congressional Research Service. And experts don't think it will be different this time around.

JENNIFER BLOUIN, PROFESSOR, UNIVERSITY OF PENNSYLVANIA: How much of that $3 trillion is likely to come back to be used to hire folks, invest in research and development, build new plant facilities and manufacturing? I would suspect it's fairly low.

ALESCI: But the fervor for big corporate tax cuts is helping fuel a so-called Santa Claus rally in the stock market and you know that's making President Trump very happy.

(END VIDEOTAPE)

ALESCI: Of course, the major question right now is, does the U.S. really need tax cuts? When the economy seems to be doing quite well, third quarter gross came in at 3.3 percent and that's pretty good -- Christi, Victor.

PAUL: All right. Thank you so much, Cristina. Good to see you today. So coming up, Michael Flynn guilty. Jared Kushner implicated. How

Special Counsel Robert Mueller's Russia investigation is digging deeper into the president's inner circle there and exposing a White House in turmoil.

BLACKWELL: Just how high will Mueller's probe go?

First, voting is happening right now for the "CNN Hero of the Year."

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(BEGIN VIDEO CLIP)

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(END VIDEO CLIP)

BLACKWELL: Vote for your favorite top 10 hero right now at CNNheroes.com.

(COMMERCIAL BREAK)

[06:43:37] PAUL: New details this morning about the relationship between former National Security adviser Michael Flynn, the Trump White House and Russia. The court filings from Flynn's plea hearing say a, quote, "very senior member of the president's transition team directed Flynn to contact the Russian ambassador to the U.S. regarding foreign policy."

BLACKWELL: And sources tell CNN that Jared Kushner, the president's son-in-law, is that senior person, and although this development does not prove the president or his aides colluded with Russia to influence the 2016 election, the documents do provide the clearest picture yet of coordination potentially between Flynn and other Trump advisors contacting Russian officials to influence international policy.

All of this raises questions now about just how high up Special Counsel Robert Mueller's investigation will go and might be implicating who's on the list next.

Joining us now to talk about this, CNN contributor and former director of U.S. Office of Government Ethics, Walter Shaub.

Mister Shaub, good morning to you.

WALTER SHAUB, CNN CONTRIBUTOR: Good morning.

BLACKWELL: So let's take this Jared Kushner element first. Again sources telling CNN that the very senior member of the transition team is Jared Kushner. If you add this to the list that has been accumulating for Jared Kushner over some time, omitting foreign contacts in his SF-86 form, trying to set up a back channel with Russian officials, in a normal administration and that's not a diss. I mean, the president hired his daughter with no real job description and his son-in-law, who seems to be in control of many things under the sun.

[06:45:06] Would he still -- would Jared Kushner still have this interim security clearance?

SHAUB: Well, look, we're already more than 300 days into this administration and he still has an interim security clearance. Now I know that security clearances can take a while to be awarded in many cases but not when you're talking about one of the president's most senior advisers, so obviously there are people who've already got concerns that there's something amiss here and it's very likely in another administration with another official, he'd be out the door already.

They've certainly let a lot of other White House officials go, but back on January 20th, minutes after the president was sworn in to office, the Department of Justice's Office of Legal Counsel reversed 40 years of precedent saying that the anti-nepotism statute applied to the White House and now as of January 20th this year, they say it doesn't apply to the White House.

This is the very kind of reason that you don't want nepotism in government and the reason that the rest of the government's 2.7 million employees are covered by the anti-nepotism statute. We're paying the price for that right now.

PAUL: A lot of reaction to what's happening over the last 24 hours. Some of which is coming from Lieutenant General Mark Hertling and some folks in the military. Let's listen to what he said about Michael Flynn.

(BEGIN VIDEO CLIP)

LT. GEN. MARK HERTLING, CNN MILITARY ANALYST: He went against the Constitution of the United States. General officers, soldiers are held to a higher standards. We are taught throughout our career to honor the values of things like duty, honor, country, integrity, respect, loyalty, selfless service, and America expects that of its general officer ranks because they give us their sons and daughters to defend the country. So when you have an individual who lies, who serves one individual as

opposed to the Constitution of the country it just truthfully makes me a little bit furious.

(END VIDEO CLIP)

PAUL: A lot of people may be furious about it.

Mister Shaub, do you believe that there are more charges coming for Flynn?

SHAUB: Well, you know, I -- I think we should all be very careful predicting what happens next. This thing has been unfolding in unpredictable ways. The plea agreement says that they won't bring additional charges based on the facts articulated in the pleading, but of course we've all heard a wide range of news reports of things that Flynn might have been involved in, in addition to that.

So I think a lot is going to depend on his level of cooperation and how much he's able to deliver and whether he sticks to his promises and from there it's anybody's guess, but I do think this signals some serious trouble for the White House.

BLACKWELL: So we haven't heard from the president himself yet about this plea agreement, this guilty plea from Michael Flynn, but we have heard from the president about Flynn and this investigation that's happened earlier this year. I believe it was in March. The president tweeted this, let's put it up.

"Mike Flynn should ask for immunity in that this is a witch hunt. Excuse for big election loss by media and Dems of historic proportion."

I'm sure as an ethics attorney you would advise against tweeting something like that. But what does the president's degree of engagement on that level, in that way, up to this point and looking forward mean for the president as this investigation moves forward?

SHAUB: You know, I think the thing that tweet signals to me is consistent with something I've been saying all along about him and that is that the most disturbing thing I've seen this year is the president's willingness to impinge on the independence of the Department of Justice. I mean, the Department of Justice's independence is key to the rule of law in our country.

The president's been willing to complain about Sessions recusing, the president's been willing to fire the FBI director, his own special counsel Don McGahn reportedly reached out to find out if there had ever been a FISA warrant for surveillance of their campaign or the transition team.

And so all of this is very disturbing that the president would weigh in this way. And specifically in an individual case of one senior official who for crying out loud was the national security adviser. You don't get much closer to the president than that and he really needs to stay out of things. PAUL: All right. Walter Shaub, we so appreciate your insight.

Thanks for taking the time for us this morning.

SHAUB: Thanks.

PAUL: All right. So guess what? Coy Wire is at the site of today's SEC championship game. What a tough, tough job you have, don't you, Coy?

COY WIRE, CNN SPORTS CORRESPONDENT: This is really tough work, Christie. Good morning to you guys. You know, if you listen closely you might be able to hear war Eagle and go Dogs. Fans getting ready about 75,000 will be packed in here today. And wait until we tell you how much the average ticket price is for this doozy set to happen later.

[06:50:03] We'll have a preview coming up in sports.

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BLACKWELL: Big, big weekend for college football.

PAUL: And guess who is there right in the front and center? Coy Wire overlooking the side of the SEC championship game.

Good morning, Coy.

WIRE: Good morning to you. This is one of the oldest rivalries in all of college football. Auburn and Georgia. An SEC championship game since 1898, only three times have these teams not played. That was because of World War I and World War II.

[06:55:03] This rematch is so highly anticipated that the average ticket price, according to StubHub is at $750 when last year's SEC title match just $250, so this rematch is big. Why? Because about three weeks ago Auburn stomped Georgia, both teams know, both coaches know that there's going to be a lot of fanfare, about 75,000 strong.

Coach Gus Malzahn, here's what he had to say about the fans.

(BEGIN VIDEO CLIP)

GUS MALZAHN, AUBURN TIGERS HEAD COACH: I'm sure there'll be more Georgia fans than Auburn fans from what I understand, but we will -- you know, our fans will be extremely loud. We have played on the road a lot in some pretty loud environments and I really believe that those experiences, you know, will help us.

KIRBY SMART, GEORGIA BULLDOGS HEAD COACH: Big testaments to our seniors I think they've done a tremendous job leading this team and this program back to where it belongs and they get an opportunity to go out tomorrow and compete on what I consider to be the biggest stage in college football. And I'm excited for that opportunity.

(END VIDEO CLIP) WIRE: All right. 4:00 p.m., SEC championship going down right here in Atlanta. One of just many of the title matches happening today. We'll stay tuned here all morning with you to bring the sights and sound as it starts to wake up here in Atlanta.

PAUL: Good day. Thank you, Coy, so much. We'll be right back.

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