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White House Concern; Trump Tax Reform Discussion; Tax Reform by Christmas. Aired 12-12:30p ET

Aired October 31, 2017 - 12:00   ET

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

(COMMERCIAL BREAK)

[12:00:14] DANA BASH, CNN HOST: Welcome to INSIDE POLITICS. I'm Dana Bash. John King is off today.

Papa who? As we learn more about the former Trump adviser, now suddenly front and center in Robert Mueller's Russia probe, team Trump is kicking the man candidate Trump once praised to the curb.

(BEGIN VIDEO CLIP)

MICHAEL CAPUTO, FORMER TRUMP CAMPAIGN ADVISER: I never heard of Papadopoulos. He never showed up at Trump Tower. Never had any interaction with any of the campaign leaders around me.

COREY LEWANDOWSKI, FORMER TRUMP CAMPAIGN MANAGER: George was such a low level volunteer, I don't recall having much interaction with him throughout the campaign.

(END VIDEO CLIP)

BASH: Steve Bannon is whispering in the president's ear about ways to set fire to Mueller's investigation. But there's one thing Trump lawyers have said is off the table.

(BEGIN VIDEO CLIP)

JAY SEKULOW, ATTORNEY FOR PRESIDENT TRUMP: There is no conversation regarding firing Robert Mueller.

(END VIDEO CLIP)

BASH: And what this interview with White House Chief of Staff John Kelly says about his relationship with the president.

(BEGIN VIDEO CLIP)

JOHN KELLY, WHITE HOUSE CHIEF OF STAFF: The lack of an ability to compromise led to the Civil War. And men and women of good faith on both sides made their stand where their conscious had to make their stand.

(END VIDEO CLIP) BASH: The facade of the White House is always beautiful, rain, sleet or shine. And team Trump's efforts to make like all is normal inside the White House right now is just that, it is a facade. Despite pushback against the bombshell changes again today in Special Counsel Robert Mueller's Russia investigation, sources tell CNN the president is seething over the indictments of two of his former campaign aides and the plea deal taken by former foreign policy adviser George Papadopoulos, who appears to be now cooperating with Mueller.

After nearly a day's silence, President Trump let loose on Twitter this morning saying essentially George who? Few people knew the young, low level volunteer named George, who has already proven to be a liar.

But just last year, then candidate Trump, described him this way to "The Washington Post."

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: If you want, I could give you some of their names. I -- I wouldn't --

REPORTER: I would be delighted.

TRUMP: George Papadopoulos. He's an oil and energy consultant. Excellent guy.

(END VIDEO CLIP)

BASH: From excellent guy to liar. Papadopoulos seems to have worn many hats. Here's how another former campaign adviser describes him.

(BEGIN VIDEO CLIP)

MICHAEL CAPUTO, FORMER TRUMP CAMPAIGN ADVISER: He was the coffee boy. I mean you might have called him a foreign policy analyst, but, in fact, you know, if he was going to wear a wire, all we'd know now is whether he prefers a caramel macchiato over a regular American coffee in conversations with his barista. He had nothing to do with the campaign. And all of this contact with alleged Russians is something completely beyond the scope of his volunteer duties.

(END VIDEO CLIP)

BASH: Papadopoulos has admitted that he lied to the FBI about his interactions with foreign officials close to the Russian government. Coffee boy or not, this is a tangible connection between a member of the Trump campaign and Russians attempting to influence the 2016 election.

Here to share their reporting and insights, Margaret Talev of "Bloomberg," Sahil Kapur, also with "Bloomberg," Carl Hulse of "The New York Times" and John McCormack of "The Weekly Standard."

Welcome one and all.

You hang your hat at the White House every day. What do you -- what are you hearing about, just in terms of this investigation, about how concerned they are?

MARGARET TALEV, "BLOOMBERG": Yes, I mean yesterday was clearly a turning point. And it was this figure that we weren't expecting. We were expecting some news maybe on Paul Manafort, maybe Michael Flynn will enter the picture at some point. But it was, in fact, that Papadopoulos, you know, revelation.

BASH: Stand by for one second. We're getting some tape in of President Trump there at the White House. Let's take a listen.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: For the incredible work you're doing to help us pass the really historic tax cuts. There's never been anything like this in the history of our country. It's cuts and it's relief and it's also reform. And, frankly, it's also simplification.

So we're covering everything. There has never been anything like it. And it's so important.

The economy is doing very well, but it can do much better. A lot of jobs are going to come from this and a lot of companies are going to start pouring back into the United States. In fact, we're going to be announcing one big one sometime very shortly. A very big one coming back into the United States.

All of you have done a tremendous job mobilizing your members, talking to the members of Congress, which is very important, and making a strong case for tax reform in the media. The media is not all fake. So, therefore, we can get a fair shake.

[12:05:00] Now is the time to redouble our efforts. Your country needs you now more than ever before. You are leaders of the country and certainly leaders on this subject. And you know more about it than anybody. We need you to be united, committed and proactive in order to overcome the forces fighting.

And there are forces fighting out there that very much benefit by the way it is now. But that's bad for the country. They know that, but they're fighting for themselves, they're not fighting for the country.

In a few days I'll be traveling to Asia to advance America's economic and national security priorities. I am counting on all of you to be back here working to maintain our momentum on tax reform and tax cuts. And that will be a short period of time. I'll be away for about ten and a half days and we'll get back very quickly.

We're meeting in China, in South Korea, in Japan. We're going to Vietnam. We're going to the Philippines, which is a strategically important location where the previous administration was not exactly welcome, as you probably remember.

The Democrats will say our tax bill is for the rich, but they know it's not. And what they will do is -- they don't even know the tax bill. The tax bill hasn't even been really put out yet. It will be over the next short period of time. But they immediately say, oh, it's for the rich, it's for the rich, because that's the right thing to say, I mean, for them. But it doesn't work. And they know that. In fact, I think we'll have some Democrats joining us and voting for us for the reduced taxes because it's a tax bill for middle class, it's a tax bill for jobs -- it's going to bring a lot of companies in -- and it's a tax bill for business, which is going to create the jobs. We're bringing it down from 35 down to 20.

While I'm in Asia, members of my cabinet will be traveling all around the country talking directly to taxpayers and focusing on the regional media, which we find to be a much more credible media, to be honest with you. In fact, I found it to be incredible how good they are.

Of course, Secretary Mnuchin, Director Cohn and my entire economic team will remain totally focused on tax reform. They'll be staying here and will continue to work closely with all of you. We've had a great relationship with most of the people in the room. We need your continued input to make sure that the final bill gets all of the details right and that we get that approval.

I want the House to pass a bill by Thanksgiving. I want all of the people standing by my side when we get ready to sign by Christmas, hopefully before Christmas. You'll all be in the room standing front row center. I think we'll be able to find a place where you can all stand front row center. It will be a big event. It will be the biggest tax event in the history of our country.

Thank you all for being here today. We have a couple of folks that I'd like to have say maybe a couple of words while we leave the media. Tom Donohue has been president and CEO of the U.S. Chamber of Commerce for a long time.

Tom, do you have anything to say?

TOM DONOHUE, PRESIDENT AND CEO, U.S. CHAMBER OF COMMERCE: Well, thank you very much for having the meeting, Mr. President.

TRUMP: Thank you, Tom.

DONOHUE: The business community has been waiting a long time for an administration and a president and a willing Congress to do what we haven't done for many decades. And we think we were lucky to arrange a budget so we're going to have a better opportunity in the Senate. I think you're right, there are some members of the Democratic legislature that will come around on some of this, particularly if the numbers are as promised.

And you hit it right on the head, we've got to work on it. We're going to have some differences amongst the business community on what should be the takeaways and the ads. But we just have to work on that. And I think your -- I think your planning is really quite good. Off to Asia and everybody else get it worked out and then come back and we'll see what we come back to.

TRUMP: Let's see what we have, right?

DONOHUE: Thank you very much.

TRUMP: Well, I appreciate it very much.

And what you said is important. And we did get the budget passed. And, as you know, that was a big event because that doesn't often happen. And we got it fairly easily passed. So I think we had a couple of extra voted if we need them. And more than a couple of vote if we needed them.

There's great spirit for this. The Republicans have a tremendous spirit. We'll have no Democrat support. We may have on the tax cuts because I think it's going to be very hard for four, five or six of them to run successfully saying they want to raise taxes. Look, the Democrats want to raise taxes and really create obstruction. And the Republicans want to lower taxes. So we want to get rid of regulations.

I've gotten rid of more regulations in the first nine months than any president has for their term in office. That's a big statement. But we've really just begun. I would say we have at least another 50 percent that we want to do. So that's going to be fantastic.

[12:10:04] In some cases it's statutory where you have to give a notice and then you have to give another notice, then you have to wait 90 days. But we've gone along that statutory process. And I will tell you, Tom, you're going to see a lot of additional relief from these horrible regulations that have been killing our country. They've literally been killing. As you notice, GDP was just announced. And, shockingly, to a lot of people, despite the hurricanes, which possibly be -- could be considered to be one point. We were at three. And we were at 3.2 last quarter. But we were at three. And to be at three with a one point, that would have meant we would have hit four or thereabouts. And those are numbers that have not been seen for many years.

So we're doing well and will continue to do well. And the big thing is, we have companies that really want to move back into the United States now because of regulation, because of what we're doing with taxes. And some big ones are going to be announcing very soon.

Dirk, could I ask you to say a few words, from the National Association of Wholesale-Distributors. That would be great.

DIRK VAN DONGEN, PRESIDENT, NATIONAL ASSOCIATION OF WHOLESALE- DISTRIBUTORS: First thing, Mr. President, thank you. Appreciate the opportunity to be here.

A few of us in the room are old enough to remember being in this same room when President Reagan was working on tax reform.

UNIDENTIFIED MALE: You and me.

VAN DONGEN: The two of us at least, right, Tom.

TRUMP: You know what, you don't look that old, no.

VAN DONGEN: Tom was here.

Thirty years or so have passed. The tax bill doesn't resemble what was done in '86. Reform is long, long overdue.

I represent an industry with very high effective tax rates. Frankly, they're tired of paying the other guy's taxes. Unstated, but I assume that the kind of price of admission for being here today is that you support the process going forward. Obviously each of us have to see the details and then maybe one thing or another that we'd like to see different. But the broader perspective is for the good of the economy, the good of the country and, frankly, I think the good of our members. You have to support the process going forward. You have our commitment to do precisely that.

TRUMP: That's great. Thank you, Dirk.

VAN DONGEN: And we thank you.

TRUMP: That's really great. I appreciate it.

I think so important, you know, we talk tax cuts, which is really, to me, the very big thing to tax cuts. We desperately need them. But so many other things are happening, including bringing $4 trillion back into the United States. And that money's going to be put to work for our country, for our people, creating our jobs in factories and plants.

I think the number could be higher than $4 trillion. It's been 2.5 trillion for so long. Everyone said, 2.5 trillion, but it's gotten obviously a lot bigger. They just kept saying 2.5. I think the number's going to be well over $4 trillion will be coming back into our country. And so many other things.

One of the other elements that are important, Karen, and you're going to say a few words next because I'm dying to hear what you have to say. But one of the things so important is simplification. Too complicated. And we're simplifying it greatly. And I want to thank all of my folks for being here and working on it, Gary, Steve, everybody.

The process is complicated, but the end result will not be that complicated. It's going to mean people are going to pay less tax by a lot, companies are going to pay less tax by a lot. That's a big difference. And companies are going to start rebuilding and they're going to stay here and they're going to expand and they're going to build new plants in this country. They won't be going to other countries, like they have been for many, many decades.

Karen, could you say a few words, Small Business Entrepreneurship Counsel.

KAREN KERRIGAN, CO AND PRESIDENT, SMALL BUSINESS ENTREPRENEURSHIP COUNCIL: Sure.

Well, thank you so much, President --

TRUMP: Thank you. Thank you.

KERRIGAN: Mr. President for your support and leadership on your -- on this issue. This is really the -- one of the most critical issues for small business. And they know if they get tax reform through, we're -- they're going to have more capital to put back into their businesses. They're going to invest more. They're going to provide higher wages, better benefits for their employees.

You know, these business owners and entrepreneurs are also leaders at the community -- back in their communities and they do see the lack of dynamism, the lack of business dynamism and they don't see new business creation in their communities. And that's a really serious problem in this country --

TRUMP: Right.

KERRIGAN: The lack of entrepreneurship, weak entrepreneurship. According to our numbers, 3.2 million missing businesses in our country because of people not taking risk.

UNIDENTIFIED MALE: Right.

KERRIGAN: So we're very excited about tax reform in terms of growth it will bring, the investment it will bring, making the U.S. a haven for capital again because we need to get that edge back and we need to encourage people -- more people to start businesses, particularly millennials starting businesses again --

TRUMP: Right. True.

[12:15:02] KERRIGAN: Which is going to add to our -- again, our competitiveness. So, thank you.

TRUMP: Well, one of the things that we've been talking about and that we've seen and there's never been anything like it is the level of enthusiasm -- the enthusiasm for business, for manufacturing. It's the highest level it's ever been, highest level since the charts started. And we have a tremendous level now of enthusiasm for business and for manufacturing and nobody's ever seen anything like it.

And, of course, the stock market is at an all-time high. Historic high. It has never been -- I mean it's going up I think it's 54 times since I was elected. We've hit the record 54 times. And I notice it's up again a little bit today. So that's always good. But we're going to try and keep it going up.

But we've created almost $5.5 trillion in stock market wealth. Think of that, $5.5 trillion since November 8th. So we're very honored by all of that, but a very big part of it will be tax cuts and tax reform. And we'll work on that together.

Thank you all very much. Thank you. Thank you. Thank you very much, everybody. Thank you.

(CROSS TALK)

TRUMP: Say it?

QUESTION: (INAUDIBLE).

TRUMP: We're not looking for that, no. We're not looking for that. Hopefully not.

QUESTION: (INAUDIBLE) --

TRUMP: Something some people have mentioned that. Hopefully not.

QUESTION: Are you going to -- are you going to pardon Manafort?

TRUMP: Thank you all. Thank you.

QUESTION: Mr. President, what was your reaction to George Papadopoulos' guilty plea?

TRUMP: Thank you very much.

QUESTION: Your reaction to the guilty plea, Mr. President?

UNIDENTIFIED FEMALE: Thank you.

TRUMP: Thank you. Thank you very much.

BASH: There you heard President Trump having a meeting, an extensive conversation for the cameras with people who were there to talk tax reform from various industries. At the end there you saw a conversation that he was having with Karen Kerrigan, president and CEO of the Small Business and Entrepreneurship Council.

What the president did not want to talk about, I'm not sure if you could hear, but one of the questions from reporters at the end was about Paul Manafort and whether at the end he will pardon Paul Manafort. Didn't answer that question.

Let's bring it back around the table. Let's stick with the issue that the president was talking about, tax reform, which is, you know, in addition to Robert Mueller and his investigation up on Capitol Hill legislatively, it is all the talk in Washington.

There's still a lot of things that we don't know about what's going to be in this legislation, even though we expect that they're going to unveil it formally tomorrow. We don't know whether the plan will cut tax rates for millionaires. We don't' know how the bill will treat the state and local tax deduction or 401(k) benefits, which is a biggie for middle class voters. We don't know whether it will include Ivanka Trump's expanded child tax credit. We don't know the impact on the deficit.

What we do know is this is probably the Republicans' last chance to claim a really big and important legislative victory for them. What was your takeaway, Margaret, on that?

TALEV: Thanksgiving, by the way, is the new end of the year. So now the president's saying he wants a vote by Thanksgiving. He wants to expedite that clock. And I think part of this is a reflection on the part of his party, this sort of growing feeling that they need to show they can actually do this. For President Trump, the strength of the markets has been paramount in

terms of his defensive of his opening months in office. Say what you will about legislation being slow to pass or the problem repealing and replacing the Affordable Care Act, but look at the market. And every time things go badly, President Trump will send a tweet about the market's strong performance.

I think part of this is the desire to keep confidence going in the economy. Partly because that's part of the argument for how the tax plan, you know, pays for itself by growing the economy, but partly because without that he's really in trouble and his party is starting to get nervous.

SAHIL KAPUR, "BLOOMBERG": The irony, Dana, is that everything on your list that you mentioned that we don't know are who the losers in the tax plan are going to be. We know the winners. We know there's going to be a big pass through tax cut for closely held businesses, a corporate tax cut, probably rate cuts across the board. But we don't know what's going to happen, as you mentioned, with 401(k)s. The Ways and Means Committee tells us that they're going to keep the property tax deduction possibility in the state and local aspect of it. The rest, sales and income taxes are going to go. But, other than that, we really don't know how they're going to fit this inside the $1.5 trillion box. And the losers in the history of tax reform have been the ones to kill it. This is why it hasn't been done for 31 years. They're operating on an extremely aggressive timeline here.

BASH: Yes, that's a great point. And you had a story this week when you talked about one of the aspects -- people who make $1 million a year. And Susan Collins, a moderate Republican from Maine said to you, I do not believe that the top rate should be lowered for individuals who are making more than $1 million a year. I don't think there's any need to eliminate the estate tax.

Oh, boy, people in her party --

CARL HULSE, "THE NEW YORK TIMES": Well, she's a -- she's a big, important vote on this, obviously.

BASH: She is.

HULSE: You know, but one thing that members of Congress hate is when people set deadlines for when they are supposed to act because that .

BASH: By people, you mean the president?

HULSE: Right. Mitch McConnell hates that because when they don't make that deadline, we then write stories, you know, tax reform behind. But talking about the market, and you realize this too, this tax plan is built into the market right now in some ways. The market's already anticipating a tax plan. And that -- that helps keep the market up. If they don't get something done quickly or if it seems to falls apart, I don't -- the market's going to respond and I don't think the president's going to be talking so positively about the market if that happens. [12:20:21] BASH: No, you're right. But, you know, the details do

matter here in a big way because at the end of the day, what so many people who voted for President Trump were banking on was there lives being different and more money being in their pocket. And so if you don't have real tax relief for people who are in the middle class, maybe some of the working class voter who put him in the White House, President Trump is going to hear about it.

JOHN MCCORMACK, "THE WEEKLY STANDARD": I think that's the single biggest threat to tax reform is whether or not the overall tax burden on people in the middle class, even the upper middle class, is actually lower, because if you move all these pieces around, if you change, you know, state and local property tax deductions, other exemptions, you could end up with someone paying more.

So the big question is, you know, how big will the child tax credit be? How much is it expanding by? You know, that's, I think, the central -- the central question here. If it's just -- if it's the same old issue of, well, people who are richer get a bigger tax cut, I don't think that's going to kill the bill. But if people in the middle class are actually paying more, I think it's in real trouble.

BASH: Because it's not Donald Trump being in the White House as a Republican. We always have to remember that this is not kind of the classic cut taxes for the wealthy because that tends to be our base. Donald Trump's base -- Donald Trump's populist message appealed to not just the traditional Republican voter and this tax legislation is going to be the key question of whether he can deliver.

TALEV: That's right. There has been this core populist argument that runs alongside the idea that corporations need a break so it can spur the economy, so there can be economic growth. It's exactly that. That if this ends up being a shell game, you take away from, you know, the state and local deductibility or from your ability to save for retirement in order to give you a new, federal tax cut, then that whole argument's off the table.

And I'll just throw the Fed into the mix, because, you know, just to be fun, just because I'm "Bloomberg" (INAUDIBLE).

BASH: (INAUDIBLE).

TALEV: But -- so we are expecting this announcement on Thursday. And it's possible that the next Fed chair could also send signals that have an impact, not only on just sort of all these levers in the economy, the markets and such. But depending on what we know about their background, and their approach to inflation and other things like that, that if they follow that course, that also could have an impact that may offset or may encourage what the effects are supposed to be of this tax reform plan. So that's another piece to watch, both in terms of how the tax vote plays out and how the president's pick for the Fed plays out.

HULSE: And what --

BASH: OK, we've got to get a break, but, Carl, I want to get -- I want to get --

HULSE: Wait, can I say one thing?

BASH: Go ahead, please. Yes.

HULSE: I will say that that room at the White House didn't look very populist to me. You know, that was -- the --

TALEV: The bankers or was it the petroleum association?

HULSE: The typical big business Washington lobbying groups.

BASH: Yes.

HULSE: And they're going to have to get beyond that if they want to sell this message (INAUDIBLE).

BASH: No, that's very true. You know -- you know The Hill and you know deadlines. The president's deadline today of Thanksgiving, realistic or not?

HULSE: Maybe in the House if it really went great for them. I don't think they can do that in the Senate. I do hear more from Republican senators now saying, we have to get this done by the end of the year. The markets are concerned. They are accelerating this. But, you know, this whole week was supposed to be a big tax reform roll out --

BASH: Yes.

HULSE: And some other things are getting in the way.

BASH: OK.

KAPUR: Can I through one example of just of how difficult this will be?

BASH: Real quick.

KAPUR: The standard of -- yes, the standard deduction, doubling that, that's the centerpiece of the middle class tax breaks that they're offering, but that's going to draw opposition from real estate -- the real estate industry because it will reduce the value of the mortgage interest deduction, charities don't like it because wealthy people give more to charity when there's a charitable deduction. The number of itemizers will go from 30 percent to 5 percent. So there are indirect effect that will happen here that the lobbyists and wealthy people will try to (INAUDIBLE) the middle class (INAUDIBLE).

BASH: There is a reason this has not happened in 30 years.

KAPUR: Yes.

BASH: Everybody stick around. We're going to take a quick break and go back to our top story, which is the Robert Mueller investigation and what is happening inside those White House walls. Stay with us.

(COMMERCIAL BREAK)

[12:28:18] (BEGIN VIDEO CLIP)

SARAH SANDERS, WHITE HOUSE PRESS SECRETARY: But, look, today's announcement has nothing to do with the president, has nothing to do with the president's campaign or campaign activity.

(END VIDEO CLIP)

BASH: That was White House Press Secretary Sarah Sanders insisting that Monday's bombshells in the Mueller investigation have nothing to do with the president. In public the president himself is scoffing at the latest developments. In private, however, sources tell CNN, and my colleague Jeff Zeleny in particular, that Trump is seething.

And I'm told that his former chief strategist, Steve Bannon, is feeding Trump's flame, telling the president that his legal team's strategy to play nice with the special counsel is an epic failure. Bannon wants the president to signal to his allies that it's time to go all out against Robert Mueller and his team. A source familiar with Bannon's thinking says that he's advocating a scorched earth strategy, cut funding for Mueller's investigation, withhold or slow-walk document production and more.

Just a quick reality check. To do that, a lot of Republican who support Mueller's probe would have to play ball and it's not really clear that that would happen any time soon.

We're back with the panel.

So much that has developed over the last 24 hours with this probe. Let's just stick on this -- on this theme here about how the White House is reacting to this.

The president himself and what he is being told to do or not to do is fascinating to me. And just the notion that obviously he has been kept at bay by his lawyers. He hasn't really tweeted about -- until the past couple of days -- about Mueller for months and months and months. And now he's being urged by Steve Bannon, get out there and go crazy.

[12:30:01] You know people on Capitol Hill.

HULSE: I -- I think that --

BASH: Do you think there's any chance that they would go along with that?

HULSE: I think that would really royal Capitol Hill. The one thing they're -- obviously the Republicans are very nervous right now. They'd much prefer to be talking about tax reform. But they have to talk about this.