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Polls: Dems Increase Generic Ballot Advantage to 9 Points; Fellow Diner at D.C. Restaurant Tells Pruitt to Quit. Trade War Looming As Retaliatory Tariffs Hit U.S. McConnell Confident New Court Nominee Will be Confirmed. Aired 12:30-1p ET

Aired July 03, 2018 - 12:30   ET

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

[12:30:00] JONATHAN MARTIN, NATIONAL POLITICAL CORRESPONDENT, THE NEW YORK TIMES: I think it depends on what race you're talking about. I just think that -- I mean, all these numbers are fascinating. We're so polarized now along party lines and along views of Trump.

But I just think when you're talking about in terms of the midterms, you have to know what race. Is this the North Dakota Senate race, or is this, you know, the House re-elect of Barbara Comstock in Loudoun County, Virginia? Because if it's the latter, then I think that it's problematic for the Republicans. If it's the former, I think it's a better issue for them. So, I think it totally breaks along partisan lines.

Real fast though, I would say we have a real live experiment in this. Last year in Virginia, Ed Gillespie put the ball in the air. He had to make up some ground. He tried to run as argued that his opponent, the current governor was soft on MS-13. Sounds familiar?

And guess what? It didn't work. He got thrashed. And he got thrashed in large part because of turnout among who? College educated women voters rejected that approach.

Again, that tells us something about a heavily suburban state. So, I think that that's where it draws the line.

JOHN KING, CNN HOST: It's a great point because, again, we're talking about national numbers in midterm elections unlike a presidential election where as if you're saying, look at the Electoral College don't necessarily invest everything in national numbers but they do tell you about trends.

MARTIN: Yes.

KING: And so the Quinnipiac asked, who are you going to vote for? Which party would you prefer to run the Congress? And right now, 49 percent say -- look at the generic value here, you say, you know, the Democratic advantage has gone up from just a month ago. And again, Republicans are watching to see would this focus on immigration and family separations, the dominant issue in the news cycle? At least in the short-term, it appears to have helped the Democrats. RACHAEL BADE, CONGRESSIONAL REPORTER, POLITICO: Yes. Absolutely.

It's going to help the Democrats right now because as you showed in the numbers -- (INAUDIBLE)

BADE: Yes, exactly. Well, the majority of Americans do not support the idea of taking kids away from their parents even if they're coming here illegally. It is early though, and at one point, Democrats did have, you know, double digit leads over Republicans and then dropped considerably. Now, it's going back up again and we have a long way until the midterm elections.

I do think, it's interesting the polls you showed earlier showing that a majority or -- not a majority, 27 percent. The most -- the biggest issue Americans care about is immigration because if you ask Republicans on the Hill, a lot of them think that the tariffs are going to be their biggest problem. And we're going to talk about in a future segment. But immigration is really problematic for Republicans because if they want to take a hard line on this, they're going to hurt their swing state Republicans who need a solution for DACA, who have Hispanic populations that they're trying to say, I'm trying to think of a more measured immigration approach, even when the party is trying to go farther to the right.

So, it's just not --

KING: You know, both parties have the state by state issue.

MARTIN: Yes.

KING: Where if you're going to say, abolish ICE if you're running for Congress in Queens. That's not probably going to help Jon Tester in Montana or --

KAITLAIN COLLINS, CNN WHITE HOUSE CORRESPONDENT: Exactly.

KING: -- or Donnelley in Indiana.

COLLINS: That is essentially a gift that they have given Republicans by calling to abolish ICE. We have some of these Democrats who are doing --

(INAUDIBLE)

COLLINS: It does depend on where but overall, the president and Republicans are going to be able to use this. As we're seeing the president does now that if they're calling to get rid of ICE, they're eventually going to call to get rid of all police officers. That is really a messaging gift from Democrats for these Republicans who are going to be able to take advantage and seize on that language and use that to help them as this immigration discussion is at the forefront.

KING: Given to the president at the time he was on his heels on this --

COLLINS: Exactly. KING: -- issue of immigration. So, the timing of that is interesting. We'll watch it going forward as we go to midterms.

Before we go to break though, more of a solemn moment. Across the country right now, flags flying at half staff to honor the victims of last week's shooting at the Capital Gazette newspaper in Annapolis, Maryland. President Trump ordered them lowered this morning. You're looking at the one flying over the White House right now.

We'll be right back.

(COMMERCIAL BREAK)

[12:37:57] KING: Topping our political radar today. The Trump administration plans to roll back a set of Obama era policies that encourage colleges to use race as a factor in school admissions. This comes as the Justice Department investigates whether Harvard is illegally discriminating against Asian-Americans by holding them to a higher standard on applications. Obama officials dismissed the complaints along those lines during their tenure.

A Republican Senate delegation holding high level tax in Moscow ahead of President Trump summit with Vladimir Putin later this month.

Senator Richard Shelby, Republican of Alabama telling the Russian Foreign Minister, Sergey Lavrov, quote, we're competitors, but we don't necessarily need to be adversaries. Senator John Kennedy of Louisiana says the discussions were frank and the he, quote, asked our friends in Russia not to interfere in our elections.

Walmart taking some heat for peddling impeach Trump merchandise online. Various items bearing that phrase are available, including t- shirts, coffee mugs, and refrigerator magnets. One conservative commentator incredulous that Walmart would sell a baby onesie with an impeach 45 on the front is calling for a boycott asking Walmart, quote, what kind of message are you trying to send? But, welcome to America and the First Amendment, you can also buy make America great hats on Walmart's website.

An EPA whistleblower says Administrator Scott Pruitt and his aides, get this, kept secret calendars and schedules to cover up meetings or other contacts that might prove controversial. The former employee says staffers met routinely in Pruitt's office to scrub certain things from his official calendar that might look bad.

Uh-huh. No reaction yet from the EPA on this latest allegation against Pruitt who got shooed out yesterday by a woman sitting nearby at a Washington restaurant.

(BEGIN VIDEO CLIP)

KRISTIN MINK: We deserve to have somebody at the EPA who actually does protect our environment, somebody who believes in climate change and takes it seriously for the benefit of all of us, including our children. So, I would urge you to resign before your scandals push you out. (END VIDEO CLIP)

KING: Somebody help me. Somebody help me. I mean, this is a public servant getting paid with taxpayer money.

[12:40:00] They're having meetings in his office to scrub, oh, can't let anyone know about this, scrub that from the official schedule. Keep that off of the public record. And there's 14 federal investigations of this cabinet secretary and he still has his job. Somebody help me.

MARTIN: Kaitlin, what do you think? Trumpologist.

COLLINS: You just have to throw your hands up. The President still likes him.

MARTIN: Yes.

COLLINS: He doesn't like the optics of these stories. He's not completely on board with this, obviously.

KING: And the straw, camel's back thing, I mean what?

COLLINS: It's enough to keep him around. It doesn't seem there's any straw that's going to break the camel's back. And he's fired other people for much lesser offenses.

So, it's just stunning to people that every single story can come out about him. I mean, we're not even stunned by these stories anymore. That he's tried to get his wife a job through a staffer at the RGA. That he's having young staffers put things on their credit card and not paying them back.

All these things that just keep piling up. The pens that he bought. There are so many ideas or so many things he's done and so many discretions you think it would be enough. But it doesn't ever seem to be enough for this White House to get rid of him.

And aides inside the White House don't know what to say. No one is defending him inside the west-wing to the President. It's not that there's one senior staffer or making this appeal for the President to keep him around. There's none of that.

KING: How about Republicans in Congress saying this is our party too? This is our brand too. You know, hello.

SAHIL KAPUR, NATIONAL POLITICAL REPORTER, BLOOMBERG: He's setting new standards for the kind of swampy behavior that you can get away with and not get fired.

And to your point about Republicans in Congress, some of them have spoken out. Joni Ernst of Iowa said he's as swampy as you can get. Usually, that should be red flag. Usually, that's the end of the road.

MARTIN: Well, she doesn't like his -- KING: -- and it doesn't matter.

MARTIN: -- stance on ethanol. It's easier for her to flash a blade.

But look, it's a fascinating moment. And I really think if our news environment was different right now. If this President wasn't creating like a half dozen extraordinary stories every day that we all scramble to cover, if this was a more typical Washington, a summer in D.C. type news cycle and/or these kinds of stories. I think it would be a much different context.

I think Trump himself so swallows the news cycle that it actually plays a role in diminishing the scale of what Pruitt is doing. If that makes any sense.

KAPUR: It ain't draining the swamp.

KING: That's for sure. Expanding, building, deepening. I don't know the right word.

MARTIN: Haters everywhere.

KING: Up next for us.

MARTIN: Snakes.

KING: Snakes. There you go.

Up next. Canada hits the United States with retaliatory tariffs. The E.U. promises a trade fight, but the President says don't sweat it.

(COMMERCIAL BREAK)

[12:46:35] KING: The Trump trade war getting more acrimonious by the day. But the President insists not to worry.

Retaliatory tariffs from Canada kicked in this week. China says it's ready to penalize more U.S. imports. And the European Union warns if the President doesn't back down, it will slap tariffs on nearly $300 billion of American car exports.

The warnings from Republicans in big U.S. companies are getting louder, but the President sees it differently, tweeting this today. "The economy is doing perhaps better than ever before, and that's prior to fixing some of the worst and most unfair trade deals ever made by any country." In any event, the President said, they are coming along very well. Most countries agree that they must be changed but nobody ever asked.

For the record, they are not coming along at all, at least not yet. The President keeps talking and tweeting for 17 months now about negotiating new and better trade deals. Not one major agreement has been signed during the Trump administration. Not one.

But, but he keeps saying we're going to do this, and he thinks he's right. He thinks these needs to be done, especially China. You need to stand up, picking the fight with the European Union. He thinks the (INAUDIBLE) market is down about 60 point now. It's down. But he thinks in a year or two all will be fine.

MARTIN: Yes. I was saying earlier on the show. I mean, if there's any Trump doctrine like the one thing. It's that the country has been getting, pardon my friend, screwed for years when it comes to our relationship with other countries in the world, especially on trade.

He's determined to push this through no matter the impact on the economy of the market. I think for the first year of his presidency, he had to restrain to kind of governors built into administration who were stopping his impulses, namely Gary Cohn.

I think that it's different now, and there is less of a restraint at him to pursue these sorts of tariffs and trade deals. But you're right. I mean, where is the beef? He is not actually negotiated one of these trade deals yet. And the worst --

KING: Should be the way around tariffs. With the threaten tariffs may be temporary impose tariffs, use it as leverage to negotiate a deal. And then, negotiate a deal --

MARTIN: Have something to show for it, exactly.

KAPUR: He's doing what he campaigned on, but where is the light at the end of the tunnel? Where is he going to get to the place where he is delivering something better for American workers?

He may think one or two years down the road that he's going to get there, but there's an election in four months. And States like Missouri and Indiana and North Dakota, there are a lot of farmers there.

They're going to get hit with these counter tariffs from China and there are Republicans like Kevin Cramer in North Dakota who are tied to the President. The Democrats are otherwise cozying up to the President. Heidi Heitkamp and other ways on trade, she's very critical of him. I don't think this helps.

KING: I love this. As you jump in. This is Pat Roberts, Republican Senator from Kansas, in Politico. Individual senators have met with the President, including me. The Ag committee met with him. The Finance Committee met with him. And there's nobody for this, said Senator Pat Roberts of Kansas. The Agriculture Committee chairman. Trump is, "A protectionist who has his policy wrapped around the rear axle of a pickup and it's hard to get out."

KAPUR: Right.

BADE: And there's a bunch of news in that story too. It's not just Republicans verbally pushing back on this. But just a couple weeks ago, Bob Corker put out an amendment, saying he wants to try to tie the President's hands on trade.

In his own party sort of said, you know, stop, just quiet down. This is not the way to do it. Now, they're taking the reverse approach. Senator Orrin Hatch, who chose the Finance Committee, he's actually circulating language to try to reign in the President who use sort of this national security. Excuse slaps tariffs on steel and aluminum.

They're trying to redefine that. And there's also some language circulating that would basically allow Congress to give an up or down vote to any of his new tariffs. So, they're talking about actual legislative action now where just a couple weeks ago they were trying --

[12:50:05] KING: I'll still believe it when I see it. I'll still believe it when I see it.

BADE: Fair enough.

KING: Or taking it from the Senate over to the House.

COLLINS: Yes, exactly. Yes. I mean, you can put out as many strongly worded statements as you want, but until there's actual action, I don't think people will take them seriously on Capitol Hill about that.

But the question is how long do the President's voters have to be patient with him on this? Because as the White House was arguing yesterday, you're saying two years. The White House was asked yesterday.

You're saying this is in the long-term going to pay off for them. But these are companies that do not have two years. They have 60 days before they have to start blaming people off, these steel plants.

And a lot of them have said that the effects of these retaliatory tariffs have so much of an effect on them. It completely nullifies any benefit they got from the president's tax reform bill.

So, all of that is coming into this. And I think once the President's voters start to turn on him, that's when it's going to become a real problem. But the way he's messaging this, you see him this morning going after Harley-Davidson, saying their sales are down in 2017 for decision they made in 2018.

But the decision they made is because their bikes are going to cost $2,200 more if they continue to produce them here. So, they had no choice but to move them because of those tariffs that were in retaliation for the tariffs the President imposed.

So, that is a direct effect of the President's policies, even though he's painting it as a decision Harley-Davidson made on their own.

KING: I said not one. I'm reminded. I think the President says there's an agreement in principle with South Korea. I don't think we've seen the details of the deal yet. If I'm wrong about, I stand corrected.

Up next for us here, a tale of two Senate leaders and two very different positions heading into a bruising Supreme Court fight. (COMMERCIAL BREAK)

[12:55:36] KING: Welcome back. The coming Supreme Court confirmation battle is a tale of two very different leaders. Republican Majority Leader Mitch McConnell says yes. Things are about to get feisty in the Nation's Capital and down on the campaign trail.

But McConnel telling Kentucky voters yesterday. He's confident the President will make a solid choice and that he will then get the Senate behind a second conservative Supreme Court nominee in his many years.

(BEGIN VIDEPO CLIP)

SEN. MICTH MCCONNELL (R), MAJORITY LEADER: There's no presidential election this year. We had a special situation in 2016 when you had a justice pass away right in the middle of a presidential election. No presidential election this year.

The three members of the Supreme Court were also confirmed in even numbered years when there was a Congressional election. And they will move ahead with it. Hopefully, have the new justice on the Court by October 1.

(END VIDEPO CLIP)

KING: By October 1, McConnell says. The Democratic leader Chuck Schumer's fortunes not quite as rosy, liberals want Schumer to block any Trump court pick, but he can't promise that.

He can't even promise he won't lose a few Democratic votes in the court fight. So, Schumer instead trying to get progressives to take a longer view and focus on the November ballot box.

(BEGIN VIDEO CLIP)

SEN. CHUCK SCHUMER(D), MINORITY LEADER (via-phone): These risks, I think, are the greatest risks America has ever faced so we've got to stay focused, determined, and strong and stand up for the rights we believe in.

We have to do everything, everything in our power to oppose any attempt by Donald Trump to roll them back. And if we don't win Senate elections in November, Senate and House, I really worry he will roll back our democracy in ways we have never seen.

(END VIDEO CLIP)

KING: Well, let's start with McConnell. It's a fascinating difference between these two guys.

McConnell's confidence, is it justified? To his credit, whether you like him or not, as politics he is disciplined. He is ruthless when necessary and he has worked this in Neil Gorsuch case. Is his confidence that he can get this done? Is it based on fact or based on just hope? KAPUR: It's justified if the White House send a nominee who's not going to be a political bomb. Someone like Neil Gorsuch, I think, without the paper trail to alienate someone like Susan Collins and Lisa Murkowski without -- someone who's going to win over Democratic Senators like Heitkamp, Manchin, and Donnelly, who voted for Gorsuch.

It all depends on the nominee. But if he does, Republicans have -- without McConnell even 50 to 49 Democratic Senators are more on the line I think in the elections. So, I think McConnell is in a good place as long as a nominee --

KING: He's also in constant contact with Don McGahn, the White House Counsel who's leading this process and --

MARTIN: But McCain points support now -- if McCain can't came back this summer for a vote. They effectively only have 50 votes, right?

AND if you lose Murkowski or Collins that, gets you to 49. Now, you're right. The McConnell assumption is that at least the three, who voted for Gorsuch, plus perhaps McCaskill, who's been very quiet on this. We'll probably save their bacon on the vote.

KING: Save their bacon. On the other side is Chuck Schumer, who understands he might lose two or three or maybe four.

MARTIN: Yes.

KING: And he can't get them -- he needs them to survive. So, he gets it, even if he doesn't like their vote if they have to do it. But he has this Liberal base.

Look at the Senator's tweet feed this morning. He's learning something from the President here, tweeting out a chain of objections.

So, first to the court pick in general, saying Mr. President, don't pick off your list. Give us Senate Democratic a call and then, a whole bunch of attacks on Brett Kavanaugh, one of the choices here.

Chuck Schumer understands that he has to at least show the progressive base that he's throwing everything he can in front of the train.

COLLINS: And I think, they get a more effective tactic to go after the individuals that the President might nominate instead of trying to arguing to stall the decision until after the midterms.

Because, I think, they realize if this fight drags out, it's going to be an effective messaging strategy for the Republicans, come to midterms. So, I do think that is the tactics they are talking here.

Though, Mitch McConnell is saying that just because it's not a presidential election year. That's why we're going to move forward. I do think even if it was a presidential election year that they still would be going forward trying to put someone on the Supreme Court.

So, I don't know what kind of message it sends to tell voters their opinion on the matters in a presidential election and not in the midterms but he did. It is important to know that is what he's arguing there.

MARTIN: But no. On Schumer is feeling the heat. That was a conference call-in to a rally of progressives in Brooklyn where he couldn't show up because of travel. But they were on fire about this.

KING: Right.

MARTIN: And they want to hand out, he put it to lay down on the tracks and to stop this by any means possible from going forward. He obviously, can't do that procedurally.

KING: He can't promise.

KAPUR: He got a fight without inflating expectations. And Liberals think he can stop this and he can't. Then, he's going to have hell to pay through little fault of his own.

KING: Yes. Thanks for joining us INSIDE POLITICS. Fascinating months ahead. Stay with us. Jim Sciutto is in for Wolf Today, and he starts right now. Have a great day.

[13:00:09] JIM SCIUTTO, CNN HOST: Hello. I'm Jim Sciutto. In today for Wolf Blitzer.