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Flake Rips Trump's "Worst Impulses" In Fiery Speech; Cohn: State/Local Tax Deduction "Not A Red Line"; Pence, Senate Kill Rule That Made It Easier To Sue Banks; Sanders On Kelly: No Apology Necessary. Aired 12:30-1p ET

Aired October 25, 2017 - 12:30   ET

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

[12:30:01] LAURA BARRON-LOPEZ, WASHINGTON EXAMINER: -- and maybe, as Flake said, it will bring out more Republican senators but it remains to be seen.

JOHN KING, INSIDE POLITICS HOST: And even beyond those votes though, the votes that are coming in the next couple weeks. I mean, they want the party to somehow reach out and take the party back from the President. I mean, how do you do that to Julie's point?

We're not even at the 10-month mark yet, the 10-month mark. And they somehow want to, you know, they can't stage a coup. You can't get rid of him.

RYAN LIZZA, THE NEW YORKER CORRESPONDENT: Yes.

KING: So, how do you take your party back without challenging him at the ballot box or just like everybody stands up and gives speeches?

LIZZA: That's a great point is what do you actually do, right? And as we talked about before, there's these two powerful forces keeping Republicans tethered to Trump, and not wanting to go where Corker and Flake have gone.

The one force is these very high approvals he has with Republicans, right? So, in their -- these re-election campaigns being close to Trump seems like an asset so far. And then the second thing is, of course, is there is this pre-existing conservative agenda that Republicans who now control all of Washington want Trump to sign, right? And that's where the tax reform thing comes in.

I think the question is what is the red line for every Republicans (ph) where they decide that those two forces are less important than Trump if they believe this being unfit to be president. If Corker, it was North Korea, but Corker, he said, you know what? Neil Gorsuch and a tax cut is not worth World War III. I need to speak out.

Flake is obviously did a much longer term critic and he's never been on board with Trump. I think that's the question for Hillary Clinton, what is the red line if you believe what Flake and Corker believe? And lot of them we know privately do.

KING: Right. We know that privately do. And that was Flake's point, Justin. I want to get -- because I want people to hear more from this meeting (ph) here yesterday making the point that yes, a lot of Republicans didn't like Trump. They don't trust Trump. They don't think he's one of them. They don't like the way he communicates but they thought we can repeal Obamacare, fail.

UNIDENTIFIED MALE: Yes.

KING: We can cut taxes, we'll see what happens. We can pass a conservative agenda and he'll just sign it so we'll deal with him. We kind of look the other ways and we'll deal with it. Jeff Flake has nine months in, can't go that way anymore.

(BEGIN VIDEO CLIP)

SEN. JEFF FLAKE (R), ARIZONA: We must never regard as normal the regular and casual undermining of our democratic norms and ideals. We must never meekly accept the daily sundering of our country. The personal attacks, the threats against principles, freedoms and institution, the flagrant disregard for truth and decency, the reckless provocations, most often for the pettiest and most personal reasons, reasons having nothing whatsoever to do with the fortunes of the people that we have been elected to serve.

(END VIDEO CLIP)

KING: If you listen to that -- I mean, you know, there was criticism of Reagan during Iran-Contra, you blew it. You didn't tell the truth to the American people. There was a lot of criticism of Bill Clinton during impeachment. You know, that's --

CARL HULSE, CONGRESSIONAL CORRESPONDENT, THE NEW YORK TIMES: And Joe Lieberman, he's probably the close --

KING: Yes, personal character we want to see --

HULSE: -- but nothing like this. I can't recall anything like this. Yesterday morning when you got the fourth interview of the day I think that Corker had given where he talked about debasing the office and the nation. And to me, I would -- that, I was stunned by that.

KING: This is not we disagree with you. This is you ruining the office of the country.

HULSE: This -- and then Flake what's even hard core. So, here's what people I think are having a hard time understanding. While they're breaking with the President, why aren't they're voting against him. It's not about issues so much. It's about Trump himself. It's about the way he conducts himself, what he does, the indignities that they see him inflicting on the office. To me, that's what makes it so amazing. You're attacking his actual personality demeanor.

KING: Let me make this thing because we've listened to the speeches. And this is just a tiny sample of what the senators are talking about.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: So you said there was hatred, there was violence on both sides.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Well, I do think there is blame -- yes, I think there is blame on both sides. Rocket man is on a suicide mission for himself and for his regime. And nobody wants me to talk about your other senator who's weak on borders, weak on crime. So I won't talk about him. Nobody wants me to talk about him. Nobody knows who the hell he is.

(END VIDEO CLIP)

KING: And the last part was politics. The President doesn't like Jeff Flake. But the Charlottesville response, some of this goes back to Access Hollywood when they campaign. A lot of Republicans have said, you know, the American people voted for him. He won the Electoral College. So therefore, that was their, you know, the American people forgave him.

Therefore, don't ask me about anything that happened during the campaign, right there that happened beforehand because he won the election. Therefore, please, don't make me talk about that. What Senator Flake is saying is no. We've seen the continuation of things like that during the presidency. Sorry, he's not going to change. We need to speak out.

HULSE: Yes. And he actually said that because we keep thinking there's going to be a pivot to governing in civility and there's just not going to be one and he's not going to, you know, take it anymore.

JULIE PACE, CHIEF WHITE HOUSE CORRESPODENT, ASSOCIATED PRESS: But even Senator Flake, even though he turned this conversation toward his colleagues and said it's incumbent on us to act, didn't really offer a path for action. This morning he was saying, no, he doesn't think impeachment is an option. It's all about policy.

I think it actually would be easier for Republicans because they could lay their marker down and their votes. But when you're talking about the personality, when you're talking about the way that the President is behaving in office, the reality is they don't really have a lot of options for something they can tangibly do to change this course.

[12:35:14] LIZZA: This is where it gets into the debate about, OK, a lot of Democrats and Liberals are saying, what do you mean, Flake? You voted with Trump whatever the percentages are. That's very complicated because what comes to the floor in the Senate is basically consensus Republican policy.

Does that mean you're necessarily supporting Trump? I don't know. But -- so, I think that's somewhat unfair criticism. But what can you do about Trump? Well, if you empower him by passing his agenda, are you -- is it Jeff Flake --

KING: Even though it's your agenda, too. It's a great point.

LIZZA: Right. That's what -- how do you contain him is the question that Flake has opened up if you believe that he's fundamentally unfit and that he's actually violating the norms of our democracy which are incredibly serious charges.

KING: And if you withhold your votes and tax reform fails, what happens in the Republican primaries? They have no idea who their backlash would be against in 2018. The only way to directly challenge him is 2020. Between now and then, I think we are in for a right, an interesting right.

Everybody, sit tight. Republicans hit a new stumbling block just on the part we're talking about, the agenda, the tax cut fight and it's coming from within their own party.

(COMMERCIAL BREAK)

[12:40:22] KING: Welcome back. The House is set to vote tomorrow on a budget that paves the way for the President's big tax cut. But there are some objections. It could be hiccup. A handful of Republicans from states like New York and California, New Jersey, threatening to vote against the budget unless leaders agree to not kill a deduction that's very popular with their constituents.

Let's take a look at this. The state and local income tax deduction. We all take it, right. It would bring if you take it away $1.3 trillion in revenue to the federal government. That's why the writers of this bill want to eliminate the deduction. They need the money.

But it hits high tax states like California and New Jersey especially hard. The average if you live in a Democratic district, this is the average you would lose. If you live in a Republican district on average you lose that much deduction.

Let's get to the brass tacks. They need votes to pass the budget. Let's say you're Peter King from New York, are you going to tell your constituents, I just voted to take away nearly $7,000 in tax deductions from you. Or let's say you're in New Jersey and you're Leonard Lance, another moderate Republican. You're going to tell your constituents, I voted to take away nearly $14,000 in your tax deduction. Or head out to the west coast, Darrell Issa of California, $9,000 a little more than that. Is he going to vote for this and go home and tell his constituents, sorry. When you figure out your tax forms in April, please don't blame me, blame President Trump. That's what makes this vote so tough. Is this negotiable? The White House says, maybe.

(BEGIN VIDEO CLIP)

GARY COHN, CHIEF WHITE HOUSE ECONOMIC ADVISER: We spend enormous amount of time talking about that. When you lower the rate but get rid of that deduction for many American taxpayers they actually end up in a better place.

UNIDENTIFIED FEMALE: Is that a red line for you?

COHN: It's not a red line for us. That is not a red line.

(END VIDEO CLIP) KING: Is there a chance just the House budget vote is tomorrow. Now they can say -- leadership will say, please vote for this and we'll deal with the details of the actual details of tax form down the road. But is there a chance that the revolt of the moderates will knock this off the rails?

BARRON-LOPEZ: I mean, there's a chance but we'll see. I mean, Paul Ryan and other leadership is already meeting with them and trying to, you know, convince them, look just let us get over this hurdle so that way we can tackle the details. You know, the formal tax plan for the proposal is supposed to come out November 1st. Let's get into all the nitty-gritty then. But if we don't pass the budget now, then the tool that will make it filibuster proof in the Senate isn't going to be there.

KING: A good strategy if you're Paul Ryan. But if you're those moderate members of Congress where some of them aren't moderate which are from a high state area, were you going to go home and tell your constituents, hey, sorry I just took away $10 000 in your tax.

HULSE: Well it's leverage time.

KING: It's your last time. But how many more chances do you get --

HULSE: Right.

KING: -- to change the bill? Because if you adopt the budget then it brings tax reformers part a bigger bill to the floor. They might not need your vote. So they need your vote now. This is your moment, right?

HULSE: And so they have to exert all the leverage they can. I noticed today they're already talking about we just want a commitment or an agreement. So I'm not sure how binding that's going to be. But I think it only passed by one vote the first time around. So they do need these guys' votes. And this is their chance.

KING: This is dicey. And if you have leverage you take, I want to move for another big story last night about your money on Capitol Hill, first a little context. Remember back in the campaign, candidate Trump saying things like this?

(BEGIN VIDEO CLIP)

TRUMP: I'm not going to let Wall Street get away with murder. Wall Street has caused tremendous problems for us. We're going to tax Wall Street.

The Wall Street investors who have rigged the regulations against the middle class, they're donating to Hillary Clinton.

(END VIDEO CLIP)

KING: Well, last night, the President sent his Able Deputy the Vice President Mike Pence up to Capitol Hill to break a 50-50 tie to vote in favor of a bill Wall Street lobbyists have been pushing hard for. It makes it harder for you average American to sue banks and credit card companies. Simple question is this consistent with the rhetoric of the President on the campaign that I'm for the little guy against Wall Street?

PACE: No.

LIZZA: Thank you. I mean, this shows either one, you know, it's always a question of how much Trump believed his own, you know, nationalist populist message. And how much like meat was actually on that bone. But if it meant anything, it meant taking on the financial services industry. That to say the least has not taken in Congress among Republicans. We're still very close to that industry. And this has been on their wish list for a long time.

But it goes to show that Trump and the White House has not really been as organized in pressing its own sort of Trumpist agenda and when it comes to most of these issues Republicans on the Hill are still in control.

KING: But this is one of those issues we talked earlier about the debate about the Trump effect on the party. This is one of the issues where Republicans say, we don't like him, we don't trust him, he's not one of us but he signs our stuff.

LIZZA: Exactly.

KING: So we will pass this stuff and send it to him. So this is one of their rationales, excuses, call it what you will for like turning a blind eye to some of the stuff they don't like.

LIZZA: Exactly.

KING: At this moment, Elizabeth Warren, senator from Massachusetts not on the President's side on this one and long behold, she remembers the campaign.

(BEGIN VIDEO CLIP)

[12:45:09] SEN. ELIZABETH WARREN (D), MASSACHUSETTS: You've gone on and on and on about how strong you are, how tough you are and about how you are going to stand up to Wall Street. Well, this bill is a giant wet kiss to Wall Street. President Trump, are you really going to let Mike Pence cast a tie-breaking vote to hand big banks their biggest win in Congress since they crashed the economy nine years ago?

(END VIDOE CLIP)

PACE: Well, yes.

KING: Yes. The answer was yes.

PACE: He did let him do that. I mean, I think when you kind of step back and you look at the Trump presidency, I think one of the most fascinating questions is going to be is he going to remain Teflon to so many of these sort of accountability promises that other candidates get criticized for. He says something on the campaign trail then he gets in office and he does something different or at least signs off on different policies.

This is so fundamental to what he was about as a candidate. Yes, there wasn't a lot of policy behind it. There weren't a lot of specifics behind it. But this idea that I am there for the little guy.

KING: I am your voice.

PACE: I am your voice. That's what he said, I am your voice. And he sends Mike Pence up to cast this vote on a bill that undoubtedly benefits Wall Street. It looks like hypocrisy. It looks like a broken promise. But Trump has just been Teflon to that idea.

KING: It's easier -- for the 60-40 vote it's a little easier to process. When the Vice President has to break the tie, we shall see.

HULSE: Directly. Well it's just that Trump actually had some credibility during the campaign on this because though he was a New Yorker he wasn't a Wall Street guy. And, you know, he kind of fought with Wall Street. And then to go and have Pence do this, this early, I mean it undermines that.

KING: That he met Gary Cohn and Steve Mnuchin and Wilbur Ross.

HULSE: Exactly. I think they worked at Goldman Sachs.

KING: They may have. When we come back, truth as defined by those who stand at the podium at 1600 Pennsylvania Avenue.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

[12:51:15] SEAN SPICER, WHITE HOUSE PRESS SECRETARY: This was the largest audience to ever witness in inauguration period, both in person and around the globe.

(END VIDEO CLIP)

KING: Sean Spicer, of course, is gone. His penchant for telling tall tales cost him any credibility in the White House briefing room but it did won him an Emmy, or never mind, I'm sorry. Just a moment on the Emmy stage where he was part of a joke about his inability or unwillingness to tell the truth.

It is now the Sarah Sanders era, but the briefing room still off on a fact free and a fact challenge zone. One current big example, the tape doesn't lie. It is just indisputable.

The Chief of Staff, John Kelly's recollection of a 2015 speech by Florida Congresswoman, Frederica Wilson was faulty. Kelly standing at the White House podium said the congresswoman said things that a tape of the event proved she did not say but no apology or acknowledge, just another effort at taxpayer expense to redefine truth.

(BEGIN VIDEO CLIP) SARAH HUCKABEE SANDERS, WHITE HOUSE PRESS SECRETARY: I don't believe that General Kelly mischaracterized. He gave his account of what took place. General Kelly and his family have made the ultimate sacrifice for our country. I think he's led with honor and integrity. I think he's doing a great job of chief of staff and I don't think he has anything to correct or apologize for.

(END VIDEO CLIP)

KING: General Kelly served with distinction. He's an American hero. He's a gold star parent, he had tragedy in his family. He deserves our respect. What he said was not true. And so, then using his military service to say therefore, you cannot question him, I'm sorry, that is equal to if not a greater violation of anything Sean Spicer said behind that podium.

LIZZA: Absolutely. It's beneath contempt to use a general stars, a general who is now in a political role as chief of staff of this White House to use his stars as a shield from press criticism when he went out there in public and maligned a sitting U.S. congresswoman with something that was false with an accusation. Maybe he misremembered it. It's totally possible. But, you know, maybe he didn't lie on purpose. But he said something that was just not true about her and in a really, really awful way undermining her commitment to dead FBI agents.

KING: And hurting himself and his credibility in the sense that he was out there as a character witness for the President. All the perfect people watching raise your hand. I mean, people like mistakes. If General Kelly just made a mistake, he didn't like the fact that she talked about herself and that offended him which his right. And then, his recollection was faulty because he was mad about, fine. Just say I'm sorry. My recollection was clearly off.

My point is this, whatever case you want to make. But the tape proves that he was wrong and she stands there and says not only he wasn't but it's un-American to question him.

BARRON-LOPEZ: And that part too that it's un-American to question him, hypocrisy abounds with the White House when it comes to that because then you have the President, you know, tweeting about Senator John McCain saying that, you know, well, I like it when my war heroes aren't captured or not respecting but McCain served in any way, shape, or form. And so, to see the back and forth, you know, you see it with Sanders also when one minutes she discredits to Washington Post and then the next minute she uses the stories of electing -- with Clinton and DNC paints (ph).

LIZZA: I mean, it raises a question what the White House briefing is for these days.

KING: Right.

LIZZA: And a lot of people said it's past, it's time. And I've always defended it as it's important for us to be able to go in there and get the White House on record on any issue of the day. But we're getting to a point where it is just a pure propaganda feast with misinformation being spread that raises a question.

PACE: I would argue that the example that we saw from Sarah Sanders is exactly why we need the White House briefing.

LIZZA: Right.

PACE: We need to be able to hold White House officials accountable from the press secretary up to the chief of staff when they are willing to come on camera and say things that are demonstrably fault.

KING: And this is not in her defense but this is a statement of reality. If someone who's in pretending, it is hard. It is hard sometimes to do that job including when you have to say this.

(BEGIN VIDEO CLIP)

[12:55:07] UNIDENTIFIED MALE: You said before that Senator Flake and Senator Corker's comments were petty. What exactly of Senator Flake's speech did you find to be petty?

SANDERS: I thought that his attacks and a lot of the comments that he made, I don't have a readout in front of me but I always watching it, I noticed that a lot of language I didn't think was befitting of the Senate floor.

(END VIDEO CLIP)

KING: I think chutzpah is the word to stand there and say the language was not befitting. Does she read her own precedents -- never mind. We'll just leave it there and no one else just to jump in.

Thanks for joining us on INSIDE POLITICS today. See you right back here same time tomorrow. Wolf Blitzer up after a quick break.

(COMMERCIAL BREAK)

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