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Trump, NAFTA Negotiations Will Begin Soon; Trump: Many People Want to Break Up The 9th Circuit; President Trump Unveils New Tax Plan; Trump May Benefit From His Own Tax Plan; Pentagon Warned Flynn Against Taking Foreign Payments. Aired 12:30-1p ET

Aired April 27, 2017 - 12:30   ET

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

[12:30:00] JOHN KING, CNN ANCHOR: -- abruptly pull out enough that it was gone a weeks.

Yesterday, they were sending word that he was going to abruptly pull out of NAFTA. He was going to walk away from NAFTA. His Chief Economic Adviser Gary Cohn, his Treasury Secretary Steve Mnuchin, his Commerce Secretary have all told him, if stock markets would crash, the auto industry would be in peril. They were never going to walk away from NAFTA, but they give us that impression yesterday and then he spoke to the leaders of Mexico and Canada last night and wallah, we're going to try to renegotiate, which is smart, which is absolutely smart and the right thing to do to with trade agreement negotiated years ago, but why the drama?

ABBY PHILLIP, THE WASHINTON POST: But even a week ago, the President himself was saying, oh, I didn't realize how hard it was going to be to get back to the table and renegotiate NAFTA. This is something he is fixated on. He really, really wants to do that. And whenever that's the case, it's very hard to move him off of that mark.

And so he's always going to boomerang back to I want to pull out of NAFTA, I want to renegotiate NAFTA even though the facts of the situation don't necessarily match that conclusion. And interestingly, you know, on both ends of our border this week, it's been areally, really rough week for Canada and Mexico and their relationship with the United States. It started earlier in the week when Trump started talking about Mexico paying for the wall again. That's something that really bothers our southern neighbor, Canada with the milk and the soft lumber.

So the reality is that Trump wants to have a lot of tough talk, but we actually do need to have good relationships with these countries and when he has those real conversations with them, he tends to soften because reality starts to set in and it's not just him yelling at a wall or yelling at his staff. It's real life.

KING: But if the leaders and the people of Canada or Mexico are little upset, and their feelings are bruised, I think Donald Trump is very happy because that means Trump voters knows he is fighting to the things he promised in the campaign. So, these more go twice for him. The question, I guess, and he like the drama I guess.

But where are we now? He let's -- he -- let me ask you this question and forgive me America again, but for the President to renegotiate NAFTA, he really needs trade promotion authority. So, then if he negotiates a new deal, and again, I'm sorry America but we -- there are rules here in Washington. If he just renegotiates, and he tries to pass it, get the Senate to ratify it, but then were up until need 60 votes and you can filibuster and you can do this. Are they in any mood to give him a trade promotion authority to negotiate a big trade deal?

PHIL MATTINGLY, CNN CORRESPONDENT: No. And if anybody was dealt with the TPA negotiations last year on TPP "rest in peace" TPP, it was miserable, it was hard. It took a lot of political capital. It put a lot of people out on the line and they ended up getting destroyed when President Trump ended up and won the election.

I think another reality to your point, there are -- it's a process. There are processes in place to actually pull out of this. There are triggers that you need to actually click, to actually start the process of renegotiation. And that's long before you even get to Capitol Hill where John McCain, and Ben Sasse, and Jeff Flake, a number of different lawmakers mostly on the border say absolutely not. And kind of a quick reminder here, before President Trump -- before candidate Trump, Republicans were very supportive of trade, very supportive of trade.

So if you're going to get the Chamber of Commerce and those type of entities that really still have a lot of power even in Trump Washington so all the sudden agreed to blow something up that has been so effective for their members, for a lot of their constituents -- it's -- you have another thing coming.

UNIDENTIFIED FEMALE: When (ph) you would ask him.

KING: And the President says those negotiations start very soon, start today. The conversations start today. There's a formality to do the negotiates, I'm sorry you got a point.

MARGARET TALEV, BLOOMBERG POLITICS: Yes, you were talking about how they said yesterday, but of course the truth is there is no "they" there's a few "they" or there's more than one "they." And so I think part of this really are the competing points of view inside the White House. Those who say you have to break it to fix it. And those who say, you have to fix it to fix it.

KING: All right.

TALEV: And you see a little bit of clash of those. There's also a little bit of rhetoric and semantics, because in order to renegotiate, you have to threaten to withdraw. That's part of the process of renegotiating.

KING: NAFTA, the new Obamacare.

MATTINGLY: Break, break it or fix it.

KING: I want to get to one more point the President made in the interview with you. He has been stymied, you know, couple of big agenda items by judges out in the west. One, the Ninth Circuit Court of Appeals and one a district judge who just block or said they couldn't do what they want to do, crack down on spending to sanctuary cities, funding to sanctuary cities but not the Ninth Circuit, but it judge you -- a district judge in the Ninth Circuit. The President doesn't like this court and he told you he wants to bust it. Let's listen.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Have you considered the proposals that are out there to break up the Ninth Circuit?

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Absolutely I am. There are many people that want to break up the Ninth Circuit. It's outrageous and, you know, you talk about judge-shopping. You saw it today. I mentioned that. But see judge-shopping and what's going on with these people. They immediately run to the Ninth Circuit. It's got close to an 80 percent reversal period. And what's going on in the Ninth Circuit is a shame.

(END VIDEO CLIP)

KING: This has been one of the hard things to figure out in the first 100 days on which subjects is he just venting and pushing and trying to stir up a conversation and on which subjects is he really going to -- is he going to get his hands dirty on legislation, to try to reorganize the appeals court system?

[21:35:01] SARAH WESTWOOD, THE WANSHINGTON EXAMINER: Yes, that's really tough to say. You're right that President Trump, you know, can be inconsistent on those types of issues, but this is a preexisting Republican proposal that has been around for years. It's been for (INAUDIBLE) introduced and then it fails to gain traction because Democrats accused Republicans of wanting to break up the circuit court for political reasons because there's a high concentration of liberal leaning judges on the circuit.

But at the end of the day, there is a need to do something about the Ninth Circuit because of the bureaucratic log jams that are formed in such a large organization has caused constituents of those nine states under the (INAUDIBLE) jurisdiction to have to wait longer to hear their cases. But President Trump did couch his criticisms in political terms.

KING: We'll see if they get to that one. Everybody sit tight up. Up next, the new Trump tax plan and what it might mean to you. Check your wallet.

(COMMERCIAL BREAK)

KING: Welcome back. The Trump administration had a mission yesterday and they stuck to it, and so there, not quite a tax plan, plan. On its merits the jury very much out, still too few details to actually conclude all that much. But the White House tried to reach through the television set to assure Americans this will be good for all of us. (BEGIN VIDEO CLIP)

[21:40:06] UNIDENTIFIED MALE: Middle class families watching this tonight on the news, family of four median income $60,000, what does it mean for them?

DR. GARY COHN, U.S. NATIONAL ECONOMIC: It's going to be a tax cut.

UNIDENTIFIED MALE: How much?

COHN: It's going to be a tax cut.

UNIDENTIFIED FEMALE: Where do you see the benefits falling, what income?

UNIDENTIFIED MALE: Middle class and business.

(END VIDEO CLIP)

KING: CNN's Cristina Alesci joins us from New York. Cristina, break down the numbers for as they say the middle class is going to benefit. Are they right?

CRISTINA ALESCI, CNN CORRESPONDENT: Well, John, there are clear benefits for the wealthy. And it's really unclear what it means for the middle class at this point. The administration had made one thing clear. It wants to simplify the tax code, reducing the number of tax bracket from seven to three, that's 10 percent, 25 percent, and 35 percent.

But as you've just heard, the administration couldn't provide income ranges for those brackets. So who's getting hit with that 35 percent? Someone making $25,000 a year or for $200,000 a year, or $400,000 a year, we just don't know.

So the conclusion here is that simplification doesn't mean that everyone gets a tax cut. Although, there is an increase in the standard deduction and if that goes through, it could help some in the middle class. But there are clear benefits for the wealthy. The highest earners will see their rate go down if this plan passes from 39.6 percent to 35 percent. They'll avoid an Obamacare surcharge and a huge tax when they transfer wealth to their children at death.

Also, not many people are talking about this, John, but wealthy tend to invest in companies either shares of partnerships or stock. And they could see a windfall if Trump is successful in slashing that corporate tax rate.

KING: Cristina, one of the things the Democrats talk about when you say the wealthy will reap the benefits, they say how much will the President reap, the President himself and they say they can't tell because of course he hasn't released his taxes, but any estimate?

ALESCI: That's right, so we're operating on just a few pages of the President's (INAUDIBLE) tax returns that journalist have managed to get their hands on. But based on the information we have, it looks like a boom for Trump on three fronts. It eliminates the alternative minimum tax, it reduces taxes on the specific kind of business that Trump himself owns and it eliminates that as state (ph) tax. Let's take those one at a time.

On the AMT, that's designed to limit the ways the wealthy reduce their tax bill. Here's the breakdown of the taxes Trump paid in 2005. Most of it, about $32 million was because of the AMT. But worst from that he would have paid only $5.3 million.

Now, on his business taxes, Trump Org. would get an immediate boost. Right now, those profits are subject to the 39.6 percent rate that we talked about. His plan would cut that to 15 percent. That is huge. Finally, his kids would avoid paying a 40 percent tax on Trump's estate eliminating this, by the way just to put it into context, would only impact a very small number of people. Only 0.02 percent of estates pay it.

At this point John, it's very hard to determine whether or not Trump is making good on his campaign promise to protect and help the average worker, but that's something that we are going to keep a very close eye on.

KING: We will indeed. Christina Alesci, thank you very much. Keep a close eye oh this as it makes its way through the Congress. And Phil, I want to start with you, on this point. On the one hand, here's the President's outline, it's not a plan but here's the President outline, he'd like a 15 percent rate. The speaker from working out of plan for a long time that had lead to the 20 percent corporate rate. On the one hand, do you think here's the Republican president coming forward roughly on the same page, this is good. But there seems to be a lot of grumbling on Capitol Hill yesterday but it's not what was in the plan about how it was done.

MATTINGLY: Yes, it's the process not the policy. Look, when the President announced last week that he was going to release these principles on Wednesday -- yesterday, Capitol Hill didn't know, the Treasury Department wasn't aware the period most people in the White House were also unaware. And I think there was a lot of concern that most Capitol Hill players on this including the key ones, the speaker's office, the Ways and Means chair, and finance chair, weren't looped in what was actually going on come out in advance.

And the real truth is behind the scenes, those tax rate has move the House and the Senate have been working together trading proposals back and forth. The House's had their own plan more or less for more that a year. They would like to be looped in on these types of things. And I think while there were key tenants in those principles yesterday that track with what Republicans want to do on Capitol Hill and House Republicans thrilled the White House is putting energy behind us because they're going to need it, they would like a little bit more buy in, a little bit more reading before things like this happen publicly.

WESTWOOD: What that does seem like as an attempt to address what was the main criticism of how the health care bill was rolled out, which is that lawmaker -- KING: Yes, exactly.

WESTWOOD: -- were not brought in on the front and that stakeholders were not consulted before the AHCA was put forward that -- then Republicans were forced to either accept or reject a bill that was more or less set in stone.

So, now the administration is just laying out the basic framework for what they'd like to see for tax reform and then they're hoping to bring in lawmakers after the fact to fill in the blank that's been criticized though as not putting forward enough detail.

[21:45:11] KING: But the big time deal time victory at the end as you commit Margaret, I just want to say from the president's perspective, that's all you mentioned smartly earlier the President follows the reviews. This is on the front page of every newspaper in America today. Everyone's talking about it. (INAUDIBLE) "New York Post" as we bring Margaret into the conversation, the Taxes Chain Saw Massacre, can we get that up there.

MATTINGLY: That's a framer.

KING: Look. Again, in the end, the final plan, if they pass one through Congress may not look like the president's plan but it will be the president's sign when he signs it. And that -- you can quibble about the details. You quibble about rate. First glance (INAUDIBLE) $6 trillion to the deficit. This is the beginning and the president's end.

TALEV: Yes. But also -- this is not like a random Tuesday in February. This is, you know, right before the 100 day mark when it crams everything else and the kitchen sink into this week, North Korea meetings, talking to people in space and now the tax plan, right? And ...

KING: Do I get an extra deduction if I'm some space?

TALEV: No more deductions.

(CROSSTALK)

MATTINGLY: Well, two deductions.

TALEV: So -- two deductions. But -- yes, the space deduction is coming to you in June when you see the full plan. But, look, this is part of this is 100 day positioning. Part of this is showing fulfillment of a campaign promise and that's the part that they want to message to average working Americans. Not the massive giveaways. But, look, the debate follows now. But now he can say he's gotten started on this process within the first 100 days.

KING: We're working on it. OK, everybody sit tight. Up next how to take your kids to workday work at the White House?

(COMMERCIAL BREAK) [12:50:49] KING: Welcome back. You might not know this if you're not a parent or if you are a parent, trust me, you may have forgotten. It's taking your son and daughter to workday. And, yes, that includes the White House. Take a pick here President Trump, Vice President Pence, little meet and greet that's out in the Rose Garden with staffers children. Maybe one of those little kids will be what? 48, 49, 50th president, somebody do the math. I will see all this kid there. We make fun of a lot of things, but this is pretty cool. If you work at the White House, and your parent works at the White House, you get to meet the president, you can hang out at the rose garden on a beautiful day like this.

PHILLIP: Yes, word on the street is Sean Spicer gave a briefing. But, you know, the kids are having a great time probably (inaudible).

MATTINGLY: They did the same thing on the Hill too. I was going to bring my 19-month-old, the Speaker Ryan press conference, but I was pretty sure he would ask a better question, so.

WESTWOOD: Yes.

MATTINGLY: This is competition. There's no chance that's going to let happen -- no its cool things and its nice --

TALEV: We're at the White House this morning too. I brought my daughter during the Obama administration when she was younger and they kept the press kids behind the rope line with the press and then the staff kids in the nice chairs in the East Room just to show them what it's really like at work. This White House rolled out the red carpet a little bit more for press.

PHILLIP: A little press --

(CROSSTALK)

KING: My older kids were here years and years and years ago. My little guy is in kindergarten today because he already knows how to use the magic wall (INAUDIBLE). White House kids, he says they ask better questions, do they?

WESTWOOD: They probably do, yes. Probably going to upstage some of their parents today, so.

KING: Upstage some of the parents today.

MATTINGLY: They'll never match Margaret's ability to ask the six-part in-depth question.

TALEV: No, I'm sure they'll make it seven and now put it on Snapchat.

KING: No, no, no, no. All right lets show you here and let's go to briefing room as we care about to say goodbye and thank you and see you tomorrow here in Inside Politics. We can show you a picture inside the briefing room. Well that's the briefing is coming up next hour. Those are actual grownups. There were some kids in those chairs earlier today if we can show you those if we go to break, that would be nice. Sean Spicer coming out to brief momentarily. Wolf Blitzer will be in the chair just a few minutes. We'll see you tomorrow.

(COMMERCIAL BREAK)

[12:56:55] WOLF BLITZER, CNN ANCHOR: Hello, I'll Wolf Blitzer. Its 1:00 p.m. here in Washington. It's Day 98 with the Trump administration. Wherever you're watching from around the world, thanks very much for joining us.

There's breaking news we're following right now as we focus in it on the briefing room. Any moment now we expect to see White House press secretary Sean Spicer. We'll take you there live once the briefing begins.

There are plenty of major issues unfolding right now. Issues he's going to be asked about today including new information that's emerging about the investigation into the president's former national security adviser Michael Flynn. As you'll remember, Flynn was forced to resign from misleading the vice president of the United States and others about his dealings with Russia.

There are now new documents that show the pentagon warned General Flynn against accepting foreign payments as he entered retirement back in 2014. And all this raising another set of ethical questions for this White House.

(BEGIN VIDEOCLIP)

REP. ELIJAH CUMMINGS, (D) RANKING MEMBER, OVERSIGHT CMTE.: Oh, yes this week the White House refused, absolutely refused, to produce even a single document. Not a single document in response to the bipartisan document request that I sent with our republican chairman. Not one syllable. I watched Sean Spicer make all kinds of excuses and how hard it would be to comply with our request. Come on, man.

Look, General Flynn served in his position for 24 days. So that excuse from the White House will not fly. I honestly do not understand why the White House is covering up for Michael Flynn. I don't get it. After the president fired him for lying.

(END VIDEOCLIP)

BLITZER: Our senior congressional reporter Manu Raju is joining us from Capitol Hill right now. Manu set the stage for us. This latest development it sounds very significant.

MANU RAJU, CNN SENIOR CONGRESSIONAL REPORTER: It does. and it's actually showing a growing tension between Democrats and Republicans on this House Oversight Committee and the Democrats on the committee and the White House they are trying to get documents responsive to a March letter that they believe can show -- shed new light on Michael Flynn and whether or not he disclosed any of these foreign payments with that he received from Russian-backed entities in 2015 and 2016.

Now these documents today, Wolf, show Michael Flynn was warned by the defense department in 2014 that he had to get permission as a former military adviser, permission from the secretary of state and the secretary of army to accept any of these foreign payments. And the documents also showing, Wolf, that the Defense Intelligence Agency does not have at any records to back up the statement by Flynn's attorney earlier (ph) this week that he extensively briefed the Defense Intelligence Agency before and after a 2015 trip that he took, paid for by R.T., the Kremlin backed television network where were you see roughly for tens of thousands of dollars for that trip.

Now, this release of documents by the Democrats sparking some pushback from Republicans on the committee who believe that they should not have release this documents, this statement coming in just earlier from the spokesman for the chairman of the committee take and shave --