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Soon: Final House Vote On Sweeping Tax Bill; How The Tax Bill Affects You; Trump Jr. Floats New Conspiracy Theory About Russia Probe; Deputy FBI Director Questioned For Hours As Top Republican Calls For Him To Be Fired. Aired 11-11:30a ET

Aired December 20, 2017 - 11:00   ET

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


[11:00:24]

ERICA HILL, CNN ANCHOR: Hello. I'm Erica Hill in for Kate Bolduan. A few minor tweaks, one more vote, and this is a done deal. The Trump administration and the Republican Congress on the brink of its first major legislative victory of 2017.

The House set to make that final vote on a sweeping tax reform bill just about an hour from now. It should be on the president's desk, ready for his signature, soon after. The bill represents the first overhaul of the U.S. tax code in more than 30 years, and also makes good on a major campaign promise from President Trump.

The Senate passing it last night, along party lines, as expected. They didn't seem too worried that most Americans, according to CNN polling, are not all that happy about the bill, nor that critics claim it does more to help big corporations and the wealthy than it does the middle class. GOP leaders believe the naysayers will change their tune once this law kicks in.

(BEGIN VIDEO CLIP)

SENATOR MITCH MCCONNELL (R-KY), MAJORITY LEADER: If we can't sell this to the American people, we ought to go into another line of work. I think this is an important accomplishment for the country. That people will value and appreciate, but, obviously, it requires us continuing this discussion with the American people and we're all going to be doing that, all through the year.

(END VIDEO CLIP)

HILL: We've got all the angles covered as Congress carries this historic piece of legislation across the finish line.

CNN's Sunlen Serfaty is watching for the vote on Capitol Hill. Kaitlan Collins is at the White House where a celebration is forthcoming. Sunlen, let's start with you. Where do we start at this point? Final steps in the House?

SUNLEN SERFATY, CNN CORRESPONDENT: That's right. Final steps today, Erica, in the House after they're doing essentially a revote. They, of course, passed this through on the House side yesterday, but they are having to do it again, unanticipatedly, because of a last-minute procedural glitch.

There were changes made Senate side, some provisions had to be tweaked and stripped out because of the Senate budget rules. That happened. So, the House has to pass a mirror image of the bill. That is why they are voting again today in the House and it certainly will pass through.

I want to take you to some live pictures to the fleet of buses that are lined up, ready to go outside the capitol here after the House votes at noon is when we'll see lawmakers flood out, go right to those buses, and take the short trip over to the White House, certainly to celebrate with the White House, celebrate with their colleagues.

Certainly, a big win for Republicans and the first major legislative accomplishment of the Trump administration -- Erica.

HILL: Sunlen, thank you. I want to turn to Kaitlan Collins at the White House where they are revving up to welcome those buses, revving up for the victory lap. What are we expecting to hear from the president today, Kaitlan?

KAITLAN COLLINS, CNN WHITE HOUSE REPORTER: Well, Erica, certainly, high spirits here at the White House because it looks like that will pass and that tax reform bill will be on its way over here to the president's desk for him to sign, which is certainly a challenge that most of his critics did not think he would be able to live up to, getting tax reform passed by Christmas.

As he is promised, but now it looks like that's going to happen. So, we'll hear from the president for the first time this hour, as he holds a cabinet meeting here at the White House, the eighth cabinet meeting of the year.

And the White House has announced that there will be a little bit of a celebration event here at the White House later this afternoon with lawmakers. But on another note, the next challenge for the president is going to be selling this bill to the American people.

Because as you know, according to that latest CNN poll, two-thirds of the American people believe that the wealthy benefit more than the middle class does from this bill, but that likely won't be on the White House's mind today. They're certainly going to be in a pretty celebratory, victorious mood right now.

HILL: All right. Kaitlan, we'll be watching for those developments. Kaitlan Collins, thank you.

Let's forget about politics for a moment. How about you, the taxpayer? The American. How does this affect you? Most of this law takes effect in less than two weeks. So, what will it mean for your bottom line, not just now, but ten years from now?

CNN chief business correspondent, Christine Romans, breaks it down.

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Hi, Erica. This is the biggest tax reform in a generation. It will be felt in every corner of the economy, by every taxpayer. The biggest tax savings go to high-income households who do pay more taxes. But all Americans, on average, will get a tax cut in 2018 and those tax cuts will expire.

So, by the year 2027, most low and middle-income Americans will pay more but taxes are complicated, and many tax breaks are adjusting, are going away. Some are staying. So, there are a few things you can do before January 1st to lower your tax bill for next year.

If you can, pre-pay property taxes. This is for people in high-tax states like California, New York, New Jersey, Illinois. Next year, the deduction is capped at 10,000. Pay now for the biggest tax break.

[11:05:10] But remember, real estate taxes are local, so you have to do some work here. You have to check with your local tax authority to see if you can pay right now. Also, you can try to defer some income to 2018 for lower tax rates, think of commissions or bonuses.

You can pay any expense that will no longer be tax free, and make charitable donations now. If your tax rate falls next year, your deduction will be less valuable. You can pre-pay charitable donations this year -- Erica.

HILL: Putting it all on the to-do list. Christine Romans, thank you.

Joining us now, Austan Goolsbee, former chairman of President Obama's Council of Economic Advisers, and Douglas Holtz-Eakin, former chief economist for President George W. Bush's Council of Economic Advisers and former director of the Congressional Budget Office.

As we take a look at all of this, in many ways, what we are being asked -- what Washington is asking the American people to do is to trust Congress and to trust big business here to continue to do the right thing.

Doug, first to you, that is a major leap of faith. These are two institutions the American people don't have a lot of faith in.

DOUG HOLTZ-EAKIN, PRESIDENT, AMERICAN ACTION FORUM: Yes, I think that's right. And ultimately, I think Republicans control the House, the Senate, and the White House for one and only one reason, Americans want better economic performance.

And they will judge this in the end my how well the economy does next year and the year after. It's not going to be passing the bill. It's not going to be the provisions. It's going to be, how does my life improve, and do I get what I expect.

GORANI: So, Paul Ryan has said, look, that's where you're going to see the success, you're going to see it in the results. But in terms of the results and even pushing this as we heard from Mitch McConnell, we have a sales pitch job to do here, as he said moving forward.

Is the sales pitch of an economic recovery the right one? Look at unemployment? Pretty good place. High, high returns on Wall Street. In terms of an economic stimulus, is that the sales pitch? HOLTZ-EAKIN: It's not really a stimulus. I think the starting point for the discussion is that in 2016, those families that worked full time for the full year saw zero increase in their real income. We're getting people jobs, but we're not seeing productivity growth and rising real wages that raises the standard of living.

That's been the Achilles heel of the labor market. At the same time, we've seen what's going on in the business world. That one parks their most valuable patents overseas, production overseas, the earnings stay parked overseas, and sometimes their headquarters go there.

So, the purpose of the business reforms in this tax bill are to change those incentives. The production and the money and the hiring and the productivity and wages grow here.

HILL: We have to point out, though, there's nothing in this bill that forces corporations to follow through on that. In fact, there was a push, of course, to have this amendment from Senator Sherrod Brown, that would say, hey, we're going to give you these breaks and they're going to last for you, yours are permanent, but you have to give something back. That's not there.

HOLTZ-EAKIN: It's not in the law, but it's in the basic economic incentives. Right now, all the incentives say, do something overseas instead of in the United States. They flipped those. There are explicit incentives to have your patents in the United States.

If it turns out you sell a lot globally, you benefit from having in the U.S. So, they've structured in a way that makes sense. It brings us into alignment with our global competitors and those, I think, are going to be the core of trying to make good on the promise to get the standard of living rising again.

HILL: So, that's the argument there also. When we look at this and look at the individual taxpayers, this was also shown as a great big Christmas gift for the American people and specifically, that this was all about the middle class.

Paul Ryan saying, look, you could see some families with an extra $2,000. That could mean a lot to people, Austan. So, once they start to see that money, it could be hard to take it away. Is that a win then for Republicans?

AUSTAN GOOLSBEE, DEMOCRATIC ECONOMIST: Look, that's not the centerpiece of this bill and everyone in America knows that. That's why this is the most unpopular tax cut in the history of polling. It has the support of less than one third of the American people, a tax cut. It is less popular than previous tax increase bills.

And the reason why is because it is not primarily a tax cut for the middle class. And as you outlined at the beginning of your segment, they're facing in a tax increase on the middle class, 15 million people will have higher taxes in 2018 because of this bill, and more than 150 million people will have higher taxes by the time the bill is fully phased in. If Doug were right, if most of what this bill did was go try to figure out how to make the U.S. system more efficient, more like the rest of the world, I think they could have gotten and coupled that with predominantly focused on the middle class, I think they could have gotten a lot of Democratic support to consider such a thing.

This is nothing like that. The reason people don't like this is this is overwhelmingly a tax cut, permanent for very high-income people, states over $20 million create pass-through loopholes, and the fact that they have to re-vote on the bill today, because of the, quote/unquote, "glitches," is absolutely a sign of how much care and time they took in writing it.

[11:10:14] We're going to spend the next three years finding the stinking Easter eggs that were put in this bill to help individual senators, to help the president himself, and we're going to regret having done it.

HILL: Doug, I see you smirking, especially about them having to go back. That it's something that could have been done --

HOLTZ-EAKIN: It happens all the time in these big reconciliation bills. I think that's not a major event. I think Austan's right about some things. These are provisions that were bipartisan in nature. Schumer and Senator Portman, for example, worked extensively on the international tax rules last year.

But they turned into a big partisan fight this year and the bill is unpopular. And I think both of those are explained by one and only one thing, and that's President Trump's popularity ratings.

Much like the Affordable Care Act was just as popular as President Obama for his entire tenure and got more popular the moment he left office, I think this is the major domestic policy initiative of President Trump and his popularity will mirror his.

HILL: That's one part of it. I do want to go back to one part, when we're talking about middle class and issues here, Austan. And one of the things -- not one of the things, several of the issues that came up and that people were fired up about and we heard were these seemingly small, but not, if you're a teacher, a $250 tax credit that was cut from the House bill, originally.

I agree, that's been reconciled in terms of classroom supplies, medical expenses, those deductions, looking at student loans. People rose up about that. They were vocal and lawmakers heard them.

Is part of the problem, too, Austan, the fact that not enough people got as fired up about this as they even did when it came to health care. We saw people trucking down repeatedly to Washington to make their voices heard.

Despite the fact that we're seeing this polling. That polling didn't necessarily translate in terms of voices ahead of this bill. Could that have changed anything? GOOLSBEE: Yes, I think it could have. I think that's an interesting point. In the health care fight, it's obviously quite visceral for millions of people who have insurance and are going to lose their insurance.

So, they're going to get out there and really fight the legislation. With a tax cut, the fact that this is predominantly going to be a gigantic tax cut for large corporations and high-income people, and a modest and temporary tax cut for the middle class is not the same kind of passion-inducing thing that it was on the health care bill.

And so, I do think that's a component. Though, I don't think just because there is some tax cut for some middle-class people, that does not automatically mean that the bill is going to become popular.

And I will remind you that the stimulus bill in 2009 was a far larger tax cut for working people. It was the largest middle-class tax cut in the history of the country. By 2010, the polling indicated that people thought their taxes had gone up, even though 98 percent of people had had their taxes cut substantially.

So, I don't think that there's any reason that this thing is going to automatically become popular.

HILL: Well, you know, we'll have lots of times to look at that, won't we? Austan Goolsbee and Douglas Holtz-Eakin, appreciate you both joining us. Thanks.

Moments from now, President Trump will speak ahead of a cabinet meeting at the White House. So, what will he say about the Republican tax bill?

Plus, the president's son, Donald Trump Jr., floating a new conspiracy theory and the former head of the CIA said he's downright scary. That's next.

(COMMERCIAL BREAK)

[11:17:58]

HILL: President Trump's eldest son suggesting a high-level government conspiracy is underway in Washington, attempting to block his father's agenda. While speaking to young conservative college activists, Don Jr. lashing out at Special Counsel Robert Mueller's probe.

(BEGIN VIDEO CLIP)

DONALD TRUMP JR., PRESIDENT TRUMP'S SON: I'm glad that this is coming out now, because it is good, because real people have to see this. You know, my father talked about a rigged system throughout the campaign. People are like, what are you talking about? But it is, and you're seeing it. There is and there are people at the highest levels of government that don't want to let America be America. They don't want to let the little guy have a voice.

(END VIDEO CLIP) HILL: Those comments come as some of the right are ramping up attacks on the special counsel's investigation, saying it is politically compromised at this point.

Joining me now to discuss, Asha Rangappa, former FBI special agent, Michael Allen, former member of the George W. Bush National Security Council, and Samantha Vinograd who served on President Obama's National Security Council.

As we look at this, not let Americans be Americans, that's a question in and of itself. But Michael, the idea for some people is not new, that there would be some conspiracy in the highest levels of government. How does it change things, though, when you have the president's son saying this?

MICHAEL ALLEN, FORMER MEMBER, NATIONAL SECURITY COUNCIL UNDER GEORGE W. BUSH: I think it changes it significantly and kind of contributes to the larger denigration of our political dialogue here. I mean, on the one hand, he is at a fundraiser or speaking to rock-ribbed Republicans.

It's traditional to throw a little red meat out, but I'm not a fan of this, and I think it's sort of part of a larger plan to lay a framework that if Mueller goes and indicts anyone in the White House, that there will be able to say, hey, see, this was political, this was political.

Unfortunately, you know, this is what Bill Clinton did to sort of denigrate and trash Ken Starr during that special counsel investigation. I didn't like it then and I don't really like it now.

HILL: We're hearing reaction, as well. Michael Hayden, on our air earlier today. Here's what he had to say.

(BEGIN VIDEO CLIP)

[11:20:03] MICHAEL HAYDEN, FORMER CIA DIRECTOR: That's more than just a little bit scary. That is a barely-coded attempt to say America should be governed by the unchecked will of the executive.

And those so-called forces pushing back, they also go by the popular name, the rule of law, and the system of checks and balances that have governed us for two and a half centuries. From the outside looking in, this is a family that is used to getting its way.

And when people stop that from happening, they're viewed as enemies rather than in the American political system, doing their job with competing and co-equal branches of government.

(END VIDEO CLIP)

GORANI: Former Director Hayden there saying that these comments undermine the rule of law. He's clearly taking them very seriously. To Michael's point, though, Samantha, it's not the first time that we have heard something like this. We have heard someone try to undermine an investigation. Is the public perception, though, different this time around in this climate?

SAMANTHA VINOGRAD, CNN NATIONAL SECURITY ANALYST: I think that Donald Trump Jr.'s statements are both inaccurate and dangerous. So, the answer to your question is yes. They're inaccurate because they perhaps purposefully misrepresent the majority of U.S. government employees.

Both Asha and myself, we're career civil servants. We served under Republicans. We served under Democrats. We were just there to do our job. His statements are also dangerous because frankly they're taking a page right out of Vladimir Putin's playbook.

The intelligence community has assessed with high confidence that Russia directed an influence and messaging campaign to sew divisions here at home. And there is bipartisan consensus this has come up at multiple congressional hearings, that there is an ongoing investigation warfare campaign against the United States to discredit our democracy, including our rule of law.

Something that differentiates the United States from Russia is our fair and transparent legal process and these kinds of statements cast doubt on that. And in doing so, make us a lot less safe.

HILL: Make us a lot less safe. What is the impact, Asha, on those civil servants, on these intelligence officers who are doing their job on a daily basis?

ASHA RANGAPPA, CNN LEGAL AND NATIONAL SECURITY ANALYST: I think those people just keep their heads down and do their job. And I think that precisely illustrates that they're not going to get involved in politics.

But to Sam's point, you know, what makes America great and different is that we are built, our government is built on the principles of accountability, transparency, and respect for the rule of law.

And I think it's quite ironic that Don Jr. is speaking about the little man, because he has lived, literally, one of the most privileged lives of anyone on the planet, and has yet never served his country, at all, including today, he doesn't have a government job.

So, he must be very surprised that he might be held to account or to answer questions based on, you know, his own behavior. But all I can say to him is, welcome to America. No one is above the law.

HILL: To the point of answering questions, if we shift here for a minute, FBI Deputy Director Andrew McCabe, of course, being grilled yesterday for a number of hours behind closed doors by the House Intel Committee. It is no secret, I think, how Trey Gowdy feels, raising concerns over these texts with Strzok. But Michael, does Grassley want him out?

ALLEN: It's looking that way increasingly so. I mean, I don't believe the FBI is fundamentally politicized. I really don't. But at a minimum, all of these texts and a lot of these articles out there, they look bad. They have an appearance problem. What worries me the most, especially after we've had the tremendous theft of intelligence assets from a variety of different people is the continuing campaign to discredit our intelligence community and our law enforcement folks, who keep us safe every day.

I think that's really, really dangerous, and I think while we need to get to the bottom of certain things, we need to do it with some discretion and not overdo these great institutions that are keeping us safe especially here over the holidays.

HILL: Asha, in terms of that, before this investigation is even close to being over, is the outcome already tainted?

RANGAPPA: I don't think so, at all. Remember that Mueller is going through the criminal process and the justice system. At the end of the day, all -- everything that he collects will be presented to a court of law, an entirely different branch of government.

They'll determine whether he's met the right standards to, you know, indict people, convict people, whatever the case may be. So, whatever is happening in this political sphere may influence how people feel about that, but there is a check on how Mueller can proceed, and I think the rule of law is going to be what settles the issue at the end of the day.

HILL: Rule of law will settle the issue. There will always be someone who has different thoughts on that. Sam, to you. In terms of everything else that's come out, though, these texts between agents, connections to Democrats, how damaging is that? Again, back to this issue of public perception.

[11:25:07] VINOGRAD: I think that we had Rod Rosenstein testify last week and say that there was no impropriety from within the FBI. I feel confident that there are oversight structures within the Federal Bureau of Investigation and the Department of Justice, such that if anything is going on, they'll find it, and they'll nip it in the bud.

The issue that's more concerning to me is the fact that we're all spending so much time listening to members of Congress politicize this discussion, point fingers about impropriety, and instead, we're not having lines of questioning on the primary national security issue of Russia interfering in our election and attacking our country.

We've had multiple hearings by the Judiciary Committee, by the Intelligence community that have fallen along partisan lines. And we have had very few questions about what Vladimir Putin did and what we're actually going to do about it.

We have sanctions that are due to go into effect in January. OK, let's hope that they occur on schedule, but what else are we going to do to deter another Russian attack?

HILL: And what's happening today as we sit here. Appreciate all of you joining us. Samantha Vinograd, Michael Allen, Asha Rangappa, appreciate your insight. Thank you. I want to get you to some breaking news out of Mexico. The government there says eight American tourists are among the 12 killed in a tour bus crash. It happened yesterday. Several other U.S. citizens, we've learned, were injured.

A spokesperson for the State Department telling us multiple U.S. citizens were killed in that accident. Also in that statement, expressing heartfelt condolences to those affected by the tragedy and noting that they are in contact with local authorities and will continue to monitor that situation.

The State Department also noting that they have staff on the scene and at local hospitals to assist victims and loved ones.

A live look here for you at the White House, just moments from now. You will hear from the president ahead of a cabinet meeting and there's a pretty good chance he may mention that GOP tax bill. This, of course, will soon become his first big legislative win. Stays with us.

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