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Quest Means Business
U.S. House Give Final Approval to Tax Overhaul; North Korea Blamed for WannaCry Cyberattack; Germany Targets Facebook Over Abuse of Power; SEC Suspends Trading of Red-Hot Bitcoin Stock; Funding Crunch for Recovery Efforts in Puerto Rico;
Aired December 19, 2017 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:00] ZAIN ASHER, CNN HOST: All right. That sound marks the end of yet another trading day on Wall Street. And this is interesting, because
on the day when House Republicans actually passed one of the biggest tax reforms in history, certainly in over 30 years, take a look at what the Dow
actually did. Entered the day flat, down 35 points or so. One of the biggest issues that we had, Apple stock being downgraded. That weighed
heavily on the Dow. And also, this idea that investors had already priced in their enthusiasm for tax reform. So, I there you have it again, ending
the day down about 35 points or so.
My friends, it is Tuesday, December the 19th. Tonight, from one gavel to another. Republicans are inches from victory as the House, as I mentioned,
approves a huge tax overhaul. Next up is of course, the Senate. The U.S. and the U.K. point the finger at North Korea for a hack that hit companies
across the world, back in May. We'll discuss that with our Clare Sebastian later on in the show.
And Germany throws the back at Facebook. I'll speak to the regulator who says the social network is actually abusing its power.
Hello everyone, I'm Zain Asher, and this is QUEST MEANS BUSINESS.
All right good evening, everyone, I'm Zain Asher. So here we have it. The president has actually done it, or I should say, almost done it. President
Trump is on the verge, very, very close, to passing his very first major legislative win. But not everybody is on board take a look.
(BEGIN VIDEO CLIP)
REP. PAUL RYAN (R), SPEAKER OF THE HOUSE: Without objection, the motion to reconsider is laid upon the table.
(END VIDEO CLIP)
ASHER: House members there, you see Paul Ryan there and House members basically applauding, cheering as they pass the Republican tax plan by a
vote of 227-203. So, no Democrat -- this is key -- no Democrats actually voted in favor of this bill as you would expect. A handful of Republicans
also as well not in favor either. There is one stop left. It's not over yet. There is one stop left, and that is the Senate, where debate has just
gotten under way. The bill is expected to pass there, as well, and will likely reach the president's desk on Wednesday. But Republican, and
Democratic leaders put forward sharply, sharply different views on what this particular tax bill means for the U.S. economy. Take a listen.
(BEGIN VIDEO CLIP)
RYAN: This is a day I've been looking forward to for a long time. We are about to achieve some really big things. Things that the cynics have
scoffed at for years, decades, even. Ideas that have been worked on for so long, to help hard-working Americans who have been left behind for too
long. Today -- today we are giving the people of this country their money back.
REP. NANCY PELOSI (D), U.S. HOUSE MINORITY LEADER: This GOP tax scam is simply theft. Monumental, brazen theft from the American middle class and
from every person who aspires to reach it. The GOP tax scam is not a vote for an investment in growth or jobs. It is a vote to install a permanent
plutocracy in our nation.
(END VIDEO CLIP)
ASHER: Now obviously, as you would expect, Democrats are not exactly cheering this tax plan. Sunlen Serfaty joining is alive now from Capitol
Hill. So, the Republicans have been promoting this idea that this is going to be great, this tax bill is going to be great for the middle class. Not
everyone believes that. Who is telling the truth?
SUNLEN SERFATY, CNN CORRESPONDENT: That's right. And we are hearing certainly that strong pushback, Zain, from Democrats up here on Capitol
Hill, saying, look, we don't think this really will benefit the middle class. The fact that you have a lot of provisions in this tax reform bill,
this massive $1.5 trillion tax reform bill, with steep cuts for businesses and the wealthy. That is a point we will likely hear from Democrats make
time and time again. But up here on Capitol Hill, the writing is in essence on the wall, that this is indeed a very likely to go through.
You mentioned before, it has gone through one step up here on Capitol Hill passed through the House earlier today by a vote of 227-203. Twelve
Republicans voting against it. Those Republicans, moderate Republicans, Republicans from high tax blue states and absolutely zero Democratic
support for that bill. Now, tonight here in the Senate, they'll be debating it for 10 hours, potentially scaling back that time of the debate.
[16:05:00] Likely it will get passed through before midnight here East Coast time tonight. And then sent to president Trump's desk for his
signature. But certainly, as the focal point right now, shifts from the political strategy of cobbling together these votes to make sure this bill
goes through, it now shifts to political messaging. And that's where, to your point, to your question, that's exactly what Republicans will have to
wrestle with next.
QUEST: It's interesting, because you had people like Newt Gingrich basically coming out and saying that the Republicans that vote against this
bill will have to pay -- will have hell to pay come the midterm elections in 2018. You mentioned 12 Republicans said no this time around. For any
one of those Republicans, could this be political suicide? What are your thoughts?
SERFATY: Well, it could be. And I think largely we do not know yet, because put simply, we don 't know how exactly this tax bill yet will
either benefit Americans or not. And that's certainly something that we saw addressed on Capitol Hill already. Speaker of the House, Paul Ryan,
was asked this morning about these pretty dreadful poll numbers who show the majority of Americans who simply do not like this bill. And he said,
look, the progress -- the results will be shown, and the progress this brings to America in essence, the proof is in the pudding here. And that
certainly is a big gamble for many Republicans heading into very hard races next year. The Republicans have talked about for a long time that they
want this tax bill. They have been a broken record. Now they have this tax bill. They have to make sure it's actually, helping people. And
that's something that so many Republicans are reliant on next year heading into their races.
ASHER: Yes, and it's such a major win for President Trump, his first real win technically. Let's talk about the Senate. Because you had a handful
of Republicans, including Senator Bob Corker initially saying, you know what, this adds way too much to the deficit. I'm not interested in this.
But then he was persuaded. What persuaded him?
SERFATY: Yes, there was a lot of back and forth over this. It's a little bit of he said/she said, so to speak. Bob Corker saying that he had no
role in adding that provision that would benefit commercial real estate holders. He, of course, among them. He said he did not have any role in
adding that in the last minute. Was not aware of it. But, of course, it was rather puzzling why he indeed came around, went from a no to a yes on
the bill at the very last hour when the concerns over the deficit that he had for so long were still there. Now we've heard from Orrin Hatch, we've
heard from Senator Corker himself, saying, look, I didn't know about this. But certainly, some Democrats up here raising that specter that this was a
kick back specifically, for Bob Corker to come round and vote yes on the bill.
ASHER: All right, Sunlen Serfaty, live for us there. Thank you so much.
Now, the House Speaker, Paul Ryan, is saying that when people actually, start to feel the benefits of these tax cuts, the bill will actually grow
in popularity. As people realize that this actually benefits their bottom line, their wallet. So what exactly are those benefits? The Tax Policy
Center found that the bill would reduce taxes by an average of $1600. Higher-income households -- this is controversial. But higher-income
households would actually get the larger cuts. Economists at the University of Pennsylvania predict the bill will actually add between .6
and 1.1 percent economic output by the year 2027. And the nonpartisan joint committee on taxation says it will raise the deficit -- this is
really what a lot of Republican hawks -- deficit hawks, are against. It will raise the deficit by 1.46 trillion dollars over the next 10 years.
And that number will actually go up if Congress ends up deciding to extend the individual tax cuts.
At the moment, the individual tax cuts are set to expire in 2025. Maya MacGuineas is the president of the Committee for a Responsible Federal
Budget. She joins us live now. Maya, thank you so much. So, the expectation is that these tax cuts will actually add $1.46 trillion to the
U.S. deficit over the next ten years. Do you believe that estimate? Is that a fair estimate, or do you think it will be higher?
MAYA MACGUINEAS, PRESIDENT, COMMITTEE FOR A RESPONSIBLE FEDERAL BUDGET: Well, I think there are two points. I think it is legitimate to say that
after the economic growth that this bill creates and there will be some, the number will be less. So, it's more likely to be about $1 trillion
after you account for growth. But then when you add back all of the gimmicks that are throughout the bill and the problem is, in order to fit
in that $1.5 trillion restriction -- which is not a very tight restriction. They put in a lot of gimmicks, which would actually bring the entire cost
of the bill up another $1 trillion. If you assume those things that are expiring will actually be extended as the lawmakers have said they want.
So, full cost even after you account for any economic growth that comes from this, and that growth is likely to be more in the short-term. In the
longer-term it could do damage to the economy because the debt is so much higher, is going to be about 1.5 trillion dollars or possibly more. And
that is certainly something people should be worrying about at a time when our debt is already so high.
[16:10:10] ASHER: Right. So Maya, if you had your say and got to have your say in this particular tax bill, how would you have implemented these
tax cuts in a way that didn't add so much to the deficit? In a way where corporations got their tax cuts, but in a way that the deficit wasn't
dramatically increased by $1.5 trillion over ten years?
MACGUINEAS: Yes. I would have stuck with the original principles that everybody who was for tax reform -- and I count myself among those folks --
put out. That this will be a bill that is revenue-neutral, and that the growth actually from tax reform would go to bringing down the debt. The
way you do that is that our tax code has over $1.6 trillion a year. Most of these numbers we talk about are ten years. But per year, $1.6 trillion
in tax breaks. I would have gone through the code and gotten rid of so many of those and for every tax break we are willing to get rid of, brought
the rates down accordingly.
And I should say that I think the improvements on the business side of the tax code are very important to help with competitiveness in a global
economic system. And so, I think that's an important priority. But I would not do it by saying, we're not going to do anything hard. We're not
going to get rid of any tax breaks. We're just going to cut this and pretend magical economic growth will result. Because that's wishful
thinking, and that's going to do ultimately -- have a very negative consequence on the fiscal picture. So, again, getting rid of tax breaks
was the key to making this more balanced.
ASHER: OK, but aside tax breaks or getting rid of tax breaks rather, what would you have done on the spending side?
MACGUINEAS: First, I would have paid for this bill all with getting rid of tax breaks, the easiest way to do it. But I do think we also have to
reduce spending and reform our entitlements, because for two reasons. We have an unsustainable debt picture in this country. We need to bring our
debt down, not up. And our two biggest programs Social Security and Medicare don't have enough in revenues coming in to pay for all the
benefits that we've promised.
So, I would do a lot to reform those programs so that they're sustainable. And I would put together a big debt deal that finds a way to generate more
revenues and cut spending so that our debts in and of itself back closer to historical levels. But on this key piece of tax reform, I think the key
was broaden the base, lower the rates. We could have had something, in fact, that would do more for growing the economy than this current bill and
simplify it more by getting rid of so many of the tax breaks that managed to stay in our tax code.
ASHER: OK, Maya. One-word answer very quickly. Overall are you happy with this tax bill, yes or no?
MACGUINEAS: No.
ASHER: OK. Very honest. Thank you so much. Maya MacGuineas, appreciate you joining us.
All right, President Trump is, of course, selling this tax bill very hard. He is predicting that his tax plan will actually turbo charge the economy.
He tweeted -- let's look at his tweets right here. He actually tweeted, Stocks and the economy have a long way to go after the tax cut bill is
totally understood and appreciated in scope and size. Immediate expensing will have a big impact. Biggest tax cuts and reform ever passed. Enjoy,
and create many beautiful jobs.
And that is also to be debated. Because some people are saying this is not actually going to necessarily add to jobs or wage growth either. It's just
going to benefit the corporations. The president will have to wait for his stock boost, though. One on Wall Street, the major indices fell from
record highs. The Dow ended up closing the day off by 37 points. Let's discuss this with Paul La Monica, who joins us live now. So, Paul, I
actually was staring at the big board from my computer from Richard Quest's desk, and I was staring, and I didn't understand why on earth the Dow ended
the day pretty much flat. It's not down by that much.
PAUL R. LA MONICA, CNNMONEY CORRESPONDENT: No, it isn't.
ASHER: Only 37 points. But it's a day when you have expected another record high.
LA MONICA: Well, I think --
ASHER: What are your thoughts?
LA MONICA: We just had a record high yesterday.
ASHER: Right.
LA MONICA: Pretty much on everything, the Dow, S&P 500, the Nasdaq. And the market obviously knew this was coming. There was no chance whatsoever
that Republicans with the majority they have in the House bill, weren't going to approve the tax bill. Everyone expects that the Senate will
likely approve it later tonight or early tomorrow morning. President Trump will sign it. So, it's that classic case of, is this all priced in? The
markets had a phenomenal year. So, what have you done for me lately? What's next?
ASHER: Let me ask you. Who is this tax bill going to really benefit? You know, there has been some question as to how much it will benefit ordinary
Americans. Most people are saying, this is not going to add to wages. It's not necessarily going to add to jobs. It's really just going to
benefit corporate shareholders. What are your thoughts?
LA MONICA: I think there is a very good chance of that, Zain. And that is going to be potentially a problem for President Trump. He loves to tout
the markets gains. But the average --
ASHER: But he's saying -- he just tweeted, it's going to add to jobs.
LA MONICA: The average American doesn't have a 401(k). They're not vested in the stock market. If corporations who now have lower taxes decide to
hire more and build plants, that would be great news. But history suggests that what they're going to do is reward their shareholders with stock
buybacks and dividend increases. Which, as a person who has a 401(k), I'm not upset with that, but --
ASHER: Yes, keep it going.
[16:15:00] LA MONICA: It would be nice to also have a stimulus package that boosted the economy and not just people like me who are fortunate
enough to have money in the market.
ASHER: You know, Paul, we've been talking pretty much the whole year, ever since Donald Trump was actually elected, we have been talking about the
fact that investors -- the reason why we're seeing this 5,000-point gain in the stock market, because investors are so excited about the possibility of
what a Trump presidency means for corporate America. Now that the tax bill is pretty much going to be signed by tomorrow, what else do investors have
to look forward to?
LA MONICA: I think what they turn to next is the possibility of some sort of infrastructure reform, which a lot of people I talk to thought was what
president Trump should have started with.
ASHER: Yes.
LA MONICA: It was an easier sell with Democrats than trying to dismantle Obamacare, which obviously was a failure. Trying to undo so many of the
financial reform laws through Dodd/Frank, which a lot of Democrats, including Senator Elizabeth Warren, are very big proponents of. No one
really would be against the notion of spending more to increase infrastructure and build out new infrastructure. Of course, it's a
question of how you pay for it.
ASHER: Yes, they can reach a consensus on that, both sides.
LA MONICA: But I think people would probably agree that rebuilding infrastructure is a good idea, and that that could actually add jobs in a
sort of New Deal sort of way from FDR after the Great Depression.
ASHER: All right. Paul La Monica, live for us there, thank you so
LA MONICA: Thank you.
ASHER: And I actually forgot to mention, that one of the reasons why the Dow ended the day pretty much flat is because Apple. Apple was a big drag
on the Dow, because it shares were downgraded. All right, still to come here on QUEST MEANS BUSINESS, the White House is pointing the finger at
Pyongyang over one of the biggest global cyberattacks of the year. We'll explain, that's next.
(COMMERCIAL BREAK)
QUEST: So, do you remember that massive cyberattack that happened back in May this year? It was called the "WannaCry" cyberattack? The U.S. in the
U.K. are saying that North Korea was behind it. This is the attack back in May that ended up crippling I.T. systems and everything from hospitals, to
car firms, all around the world, pretty much in 150 countries. The White House is saying that, you know, there is a silver lining, because the
attacks could actually have been much, much worse.
(BEGIN VIDEO CLIP)
TOM BOSSERT, WHITE HOUSE HOMELAND SECURITY ADVISOR: We got lucky. In a lot of ways, in the United States, we were well-prepared. So, it wasn't
luck. It was preparation. It was partnership in private companies and so forth. But we also had a programmer that was sophisticated that noticed a
glitch in the malware, a kill switch, and then acted to kill it. He took a risk, but it worked. And it caused a lot of benefit. So, we'll give him
that. Next time we're not going to get so lucky. So, what we're calling on here today is an increased partnership and increased rapidity and
routine speed of sharing information. So that we can prevent patient zero from being patient 150.
(END VIDEO CLIP)
ASHER: And even though the attack could have been much, much worse, as Tom Bossert was just saying. It turns out the attack was still very, very
expensive. The U.S. is saying that it cost governments and companies billions of dollars.
[16:20:00] In fact, the British National Health Service, the NHS, was targeted, forcing thousands of appointments to be cancelled. In the U.S.,
some infrastructure systems were hit. Also, you had individual companies being hit, as well. Talking about, for example, FedEx. And in China,
students and businesses were impacted with reports of digital payment systems being shut down.
So, Clare Sebastian has been on this story for us all day. She's joining us live now in the studio. So, in terms of how the U.S. forces North Korea
to pay for this attack, Tom Bossert basically said, we're going to shame them. We're going to call them out and shame them. What exactly does that
mean?
CLARE SEBASTIAN, CNNMONEY CORRESPONDENT: Well, I don't want to take away from the fact that attribution when it comes to cyberattacks like this is
critical. It's one of the hardest and most important ways that you can add accountability consequences to people's actions in cyberspace. But then I
think the administration is under no illusions that this is certainly not a quick fix, and that may well not change anything when it comes to North
Korea's behavior.
Tom Bossert in the briefing said himself, we've got very little room left to apply pressure to the regime. And just look at the precedent in this
case. Back in 2014, around this very time in December, the Obama administration blamed North Korea for that hack on Sony Pictures and
Entertainment. Remember it was a major scandal at the time. North Korea came out and denied it and then went on to be linked to further attacks
from, you know, bitcoin exchanges in South Korea to even stealing warship blueprints earlier this year. So, I think there is very little hope out
there that this is act as any kind of deterrence.
ASHER: OK. So, it's going to be hard to actually force them -- hold them accountable in that sense. But the U.S. can indeed work with private
companies, private tech companies, to prevent this from happening again.
SEBASTIAN: Absolutely. This is one of the key take-aways from the briefing today, is that the U.S. government wants tighter and deeper
cooperation from tech companies. Both Microsoft and Facebook have helped. They independently acted last week to disrupt the actions of this Lazarus
group that's linked to North Korea. That they have now link today this "WannaCry" attack. Facebook taking down accounts associated with it. And
the feeling is mutual. Brad Smith is the president of Microsoft, came out and said, I'll read the quote.
If the rising tide of nation-state attacks on civils is to be stopped, governments must be prepared to call out the companies that launch them.
Today's announcement represents an important step in government and private sector action to make the Internet safer.
Now that, Zain, is in stark contrast to comments we had from Brad Smith back in May when this was first announced. Don't forget, that the original
exploit was the software behind the entire "WannaCry" attack, was based around an NSA exploit that was leaked online. And he said this was the
cyber equivalent of the U.S. having its tomahawk missiles stolen. So this is certainly an about turn in that attitude. And Tom Bossert was asked
about whether there was any, you know -- should the government take responsibility for some of this? He said absolutely not. This NSA exploit
predated the current administration, and that the U.S. government only stockpiles 10 percent of the exploits it finds. I think there are still
questions remaining about this software out there.
ASHER: Should we all, Clare, just brace ourselves about the fact these sorts of attacks are going to become more frequent. That they're going to
happened again. Hint, the answer is one word. It starts with a y and ends with a s, right?
SEBASTIAN: Yes, I guess. You know, this has been a big year for cyberattacks. Not just "WannaCry," which was a real wake-up call I think,
not just the government's and tech companies, but for individuals as well. We saw Equifax, and the revelation that all of Yahoo accounts were affected
by those previous hacks.
So, I think, you know, this really is a time for both government companies and, of course, individuals to take real responsibility. I think one take-
away, again, from this news today is that the governments can only do so much. You know, you have to take responsibility yourself. And, you know,
don't forget that the "WannaCry" attack was due to many systems not being updated. The patch already existed. Many people just hadn't installed it.
So, I think the message is, you can take individual responsibility, update your systems, back up your data. Don't be a victim to attacks like this.
And if you can possibly know that.
ASHER: And it was fixed by a 22-year-old who discovered the sort of solution or patch for the malware. So, that's interesting as well.
SEBASTIAN: They got lucky.
ASHER: All right, Clare Sebastian, always good to see you. Thanks for joining us.
All right, Facebook is in hot water in Germany. The country's cartel office is saying that the social media company is actually abusing what it
calls, its dominant market position. So, it says the specific problem lies in the way that Facebook collects user data. It's basically a privacy
concern, which Facebook has had to deal with in the past, especially in Europe.
In a blog post, Facebook issued a response. Facebook is basically saying that it's cooperating fully, but said the idea that it has a dominant
market position is not completely accurate. Let me read to you part of their quote.
[16:25:00] They're saying, we have repeatedly had to change to keep up with what Our size does not allow us to create products, and force people to use
them. That's how our company acts in a competitive marketplace. It's not how a dominant company behaves.
And the president of the Federal Cartel Office says that because Facebook is so powerful, it has an even stricter obligation to be responsible with
how exactly it collects data. And how transparent it is in terms of what users know about how it collects data. I spoke with Andreas Mundt, a few
hours ago. I began by asking which findings concerned him the most. Take a listen.
(BEGIN VIDEOTAPE)
ANDREAS MUNDT, PRESIDENT, GERMANY'S FEDERAL CARTEL OFFICE: We found that the market shares, for example, of Facebook in the market for social
networks is extremely high. It's 90 percent of the daily active users that are active on Facebook. We've seen a lot of network effects. We've seen
access to data. So, everything that might create market power and dominance. And this is why we believe that Facebook is under -- well,
strict obligations than maybe other companies when it comes to how to generate data, what to do with this data. And with regard to privacy in
general.
ASHER: That's interesting, because when you hear Facebook tell their side of the story, they don't believe that they have market dominance in Germany
at all. They're saying that German citizens use at least seven different social media apps, not just Facebook. And that half of all German internet
users don't have Facebook at all. Is that a fair sort of other side to the story, do you think?
MUNDT: Well, we believe that our investigations point to a different direction. Facebook has millions of users in Germany. And we have defined
the market for social networks. That market does not really include professional networks, like Xing which is quite popular over here in
Germany, or LinkedIn. We believe that Facebook is active on a market of its own. A market for social networks on which you try to find friends,
you try to stay in contact with your friends. You exchange views. You exchange opinions. That is quite different from other networks that we
know. And by the way, what is not part of the market, a messaging service as well. So, if you take that as a market, we found that Facebook holds --
the market share of 90 percent. And that, in addition with other effects like access to data and network effects, et cetera, et cetera, from our
point of view really creates a dominant position with regard to Facebook.
ASHER: So, Mr. Munt, what do you want to see changed in all of this? Just in terms of privacy being protected for German users.
MUNDT: We are worried about the collection of data by Facebook. That is not so much about the collection of data when you as a user make use of the
Facebook website. It's more what is happening outside that website. Most users -- most consumers, are not aware that whenever you call up a website,
where you find a like button or a messenger service for Facebook embedded, that already from there on Facebook collects your data. I firmly believe
that most users are not aware of this. And, of course, a lot of data is gathered by that way. And this is what we think in our -- well,
preliminary legal assessment, might be harmful with regard to consumers.
ASHER: So, I see. So, it's not just the privacy issue. It's also the education and transparency aspect to it as well.
MUNDT: I think it's both. From our point of view, it's more or less a competition issue. Because the data that is collected by Facebook is the
price that the consumer, that the user has to pay. If the user wants to make use of services that are provided by Facebook. And if that is kind of
a price, according to German competition law, the price can be excessive. And if Facebook collects data in a way that is not in line with the privacy
regulation, we believe that Facebook as a dominant firm might abuse its dominance, might abuse its market power to the detriment of the consumer.
So, we see a pretty close link between privacy issues on the one side, but also with regard to competition issues on the other side.
(END VIDEOTAPE)
ASHER: All right. Still to come here on QUEST MEANS BUSINESS, beneficial, historic, generation-defining. These are just some of the adjectives,
superlatives that Republicans are using for this massive tax reform bill that passed in the House. The big question is, what do ordinary Americans,
what do ordinary voters, actually think of this bill? That story next.
[16:30:00] (COMMERCIAL BREAK)
ASHER: Hello everyone, I'm Zain Asher. Coming up in the next half hour of QUEST MEANS BUSINESS, I'll be joined by the CEO of Blockchain as regulators
crack down on companies trying to hop on the bitcoin bandwagon.
And also on the ground in Puerto Rico, where the U.S. government doesn't know how it's going to pay emergency workers. This is CNN. And on this
network, the facts and the news always come first.
All right. Republican House Speaker, Paul Ryan, is calling Tuesday a, quote, good day for America. Just minutes after the U.S. House approved a
substantial tax overhaul bill, it passed along sharply partisan lines with only Republican votes. The tax bill now has a vote in the senate.
And at least 11 people are dead in a tour bus crash in Mexico. The bus was carrying cruise line passengers to a Mayan archeological site. More than
20 people were also injured, they were transferred to a hospital. There is no word on what caused the crash.
Houthi rebels in Yemen say this video shows a missile fired toward the Saudi Royal palace. The Saudi said they intercepted the missile over
southern Riyadh. There were no casualties. This is the second missile the Houthis have fired in two months toward Riyadh.
German Chancellor Angela Merkel is vowing to change things that have not gone well in the past. Mrs. Merkel was speaking at a memorial service,
marking the anniversary of the Christmas market terror attack in Berlin. A dozen people were killed on December 19th last year, when a Tunisia man
rammed a stolen truck into shoppers.
All right. More now on our top story. Top political story. The U.S. tax reform bill that house Republicans have just passed just a few hours ago,
while they hail this bill as historic, voters increasingly don't exactly sure their enthusiasm. According to a CNN poll, more than half -- more
than half of all Americans actually oppose this tax bill. Only one-third are in favor. And President Donald Trump's approval ratings when not
exactly that much better, in fact they are at a record low.
[16:35:00] Only 35 percent of those who took part in the survey think the president is doing a good job. So, let's just talk about why all of this
is. David Drucker joins us live now from Washington. He's a CNN political analyst and senior political correspondent for "The Washington Examiner."
David, thank you so much for being with us. The irony here, just before President Trump passes this massive tax bill he's touted as a gift, a
Christmas gift to the American people, his approval ratings are at an all- time low, why?
DAVID DRUCKER, CNN POLITICAL ANALYST AND SENIOR POLITICAL CORRESPONDENT, "THE WASHINGTON EXAMINER": Well, I don t think -- I think the president is
suffering from the fact that he never really transitioned from a campaign footing to a governing footing. And so, he has continued to jaw bone
Democrats, and in a sense, treat his opposition and even a lot of his allies on Capitol Hill at times very aggressively. And I think that has
made it harder for Americans that might be inclined to support some of his policies. And some of his policies, actually, conceptually might receive
some broad support from the public. It's made it hard for them to take a look at those policies in support the president's leadership. And so, what
we have seen in a U.S. that continues to be very divided politically is the president suffering because of that, and because of his behavior.
ASHER: But if his approval rate is at 35 percent, that is beyond just along partisan lines. That's actually very, very low. And if you look at
what's exactly in this tax plan, Republicans have pushed hard that this tax cut is going to really benefit the middle class. But a lot of people are
not buying it, why?
DRUCKER: Well, a couple of reasons. First of all, when you're dealing with a split electorate right off the bat, half of the country is pre-
dispositioned not to like it. They're not going to like it philosophically, and they're not going to trust the opposition that they
have good intentions. And they're not going to give it the kind of listen they might if it was coming from the party they supported.
But you're right in that the Republicans are facing a real uphill battle to convince the right voters in the right places. And those electoral battle
grounds in the 2018 midterms that this bill is good for them. And one of the challenges they face is convincing traditionally Republican voters in
American suburbs, upscale communities, in fact, that they're not going to get hit by some of the reforms in this bill that makes it harder for them
to deduct their state and local taxes from their federal returns.
The Democrats have done a very good job of messaging this. The president's ability to talk about the tax bill while he's done better than he did with
health care, has been adequate, and not that great. And so, Republicans find themselves in a position where on the corporate side, there are a lot
of reforms in there that might juice economic growth, both Democrats and Republicans, for years have talked about the need to make the U.S. more
competitive internationally.
But what voters look at is their individual bottom line. Not the corporate side. Not the business side. Even though they might benefit from it
later. And so far, they're not convinced this thing is going to be a big help to them.
ASHER: And when people look at the corporate tax cuts, I mean, the fear is it's not going to necessarily help wages, and the individual tax cuts
expire in 2025. So, people are thinking, what is really in this for me long-term. David Drucker, we have to leave it there. Thank you so much.
We appreciate that.
DRUCKER: Thank you.
ASHER: You're welcome.
Bitcoin is booming and so are small companies turning to the technology it is built on.
I will discuss with the CEO of Blockchain. That story next.
[16:40:00] (COMMERCIAL BREAK)
ASHER: The Securities and Exchange Commission has suspended the trading of companies trying to ride the bitcoin where by rebranding. Shares in the
crypto company have surged nearly 160 percent in the last five days. The SEC says it's concerned about compensation paid to promote the firm, and
plans for insider sales, as well. The financial tech company Longfin has rocketed around 500 percent in the last week after revealing plans to buy a
blockchain related company.
And the retailer overstock is up 42 percent this week, fueled by the company's plans to turn into a bitcoin tech firm. And the crypto currency
craze is not limited to bitcoin. Some big banks are using blockchain technology, which underpins bitcoin to operate their own digital pseudo
currency.
Peter Smith is CEO of Blockchain, one of the companies offering a platform for the technology and joins us live from London. Peter, thank you so much
for being with us. So, people hear about blockchain technology and automatically associate it with bitcoin, with cryptocurrencies. Beyond cryptocurrencies like bitcoin,
what else is -- are the technology?
PETER SMITH, CEO BLOCKCHAIN: Well, the technology is fundamentally about being able to execute transactions in a low trust environment for high
value. It's an efficiency technology. Today the only uses of blockchain technology and certainly where our business is focused is around digital
currency. And we have seen a huge uptick in that over the last half year.
ASHER: So, when you think about the fact that bitcoin has surged 2,000 percent over the past year or so, and a lot of people are talking about the
fact that, you know, that kind of increase is obviously not sustainable, this was reminiscent of the dotcom bubble. You hear all of that, and you
think what?
SMITH: You know, I think that we're at a stage in the industry where there's a lot of hype. There's been a lot of growth. And that's, you
know, obviously on the side or maybe it is bubble. On the other hand, you've seen millions and millions of new entrants come into the space our
own platform is up about 10 X in the last quarter.
And so, I think there is a lot of real underlying economic activity. What's challenging any time you're adopting a new technology is
understanding where you are in the adoption cycle. And I think right now things are probably heated. But I am trying to look at the long curve,
three or four-year curve and that's where I think our focus should be.
ASHER: So, in terms of the three or four-year curve, three or four years from now, just in terms of widespread adoption of cryptocurrencies, you
actually believe that central banks around the world will actually hold cryptocurrencies. Which sort of banks -- which sort of central banks are
you talking about, the ECB has already said, not really. Not for us. The U.S. obviously is doubtful. Which sort of governments are we talking about
here?
SMITH: Yes, I highly doubt it would be one of the G3. But I think you'll see central banks around the world, particularly those in Latin America and
eastern Europe start to hold digital currency. Kind of by accident. But Bulgaria is one of the largest holders of bitcoins in the world now. Kind
of by accident. But I think you'll start to see it happen intentionally. And I think that will be one of the biggest shifts in the market over the
next year.
ASHER: I actually spoke with the CEO of Overstock.Com, Peter Burn. And -- Patrick Burn. And he basically said that, you know, he does not believe in
the sustainability in the long-term sustainability of fiat currencies. I want to play you what he said. Take a listen.
(BEGIN VIDEO CLIP)
PATRICK BURN, CEO, OVERSTOCK.COM: We need a sound currency. We need a -- we -- so even though bitcoin, yes, has had this bubble. Who knows, there
is a bubble, who knows if it's on its way to $100,000 a bitcoin. I don't know. But I love the idea that we have a form of sound money, whether it
be a return to the gold standard, which isn't going to happen, or bitcoin or some other similar currency.
(END VIDEO CLIP)
ASHER: All right. A return to the gold standard is obviously not going to happen. But given the popularity of cryptocurrencies, what do you think
that means in the long term for currencies like the U.S. dollar?
SMITH: I think fiat currencies like the U.S. dollar are ultimately a product, much more unlikely to adopt the underlying innovations around a
faster, cheaper, higher velocity money than they are to be replaced. I don't think the dollar is going anywhere in the short-term.
But what I do think is going to happen is over the next two or three years you're going to see the total market cap of digital assets and digital
currencies go past $1 trillion.
[16:45:00] And I think that will be a really interesting development in global finance, but I don't think the dollar or the euro or the pound are
in any danger of being replaced in the short or medium term.
ASHER: So, when you hear the likes of JPMorgan CEO Jamie Dimon saying, you know what, bitcoin is a fraud, anyone who invests in bitcoin is absolutely
crazy, you know, it's not going to last, the bubble is going to burst, what do you think?
SMITH: Listen, I'm biased. My life's work has been making digital currency easy for people to use. But I will say that Jamie is probably the
only major bank CEO to not have a bitcoin investment or a digital currency investment.
ASHER: All right. Peter Smith, thank you so much for joining us. I appreciate you sharing your Perspective. Peter Smith, CEO of Blockchain.
And by the way, a bit of a tough day for bitcoin prices, headed back towards $17,000.
Actually, by the way not to shabby. We have seen losses of almost 10 percent at some point during the day.
News just into CNN, breaking news to bring you. The U.S. House of Representatives will vote again -- remember, they just voted about an hour
and a half ago, but they're going to vote again on this tax bill after passing it earlier today. Some provisions in the bill the house passed
actually violate the rules of the senate, which is expected to vote on the bill tonight. Those provisions will be stripped out. The house revolt is
actually expected tomorrow. We'll be back in a quick moment, just after the break.
(COMMERCIAL BREAK)
ASHER: Just want to recap the breaking news we got just about 10, 15 minutes ago. Really throws a wrench in the president's plan to sign the
tax bill tomorrow. So, here's what we know so far. The U.S. House of Representatives is going to be voting again. They're going to be voting
again on this tax bill after passing it today, after passing it just about an hour maybe two hours ago.
Some provisions. Here's the reason why. Some provisions in the bill that the house passed actually violate rules in the senate. I know it is a
little bit complicated. But some provisions in the bill that the house passed violate rules in the senate. So, the senate is actually still going
to be voting on this particular bill tonight. Those provisions are going to be stripped out.
The house is going to be re-voting on this bill tomorrow. And then the senate is going to vote on this bill again. And then the president will
sign it. So, it's complicated but I'm being told both chambers are informed of what's going on. So once again, the senate signing this bill
tonight. The house re-voting on this bill tomorrow morning. And then the senate will be re-voting after that, and then the president is expected to
sign it. Just to recap that for you.
All right. Some other stories so we are following. Violent protests in Argentina could not stop congress from passing a controversial pension
reform bill. More than 160 people were injured, and 48 people arrested after clashes in Buenos Aires.
[16:50:00] Demonstrators threw rocks and Molotov cocktails as police fought back with tear gas and rubber bullets. Lawmakers spent 12 hours debating
before reaching their final decision. The bill is aimed at slashing the fiscal deficit. Daniel Politi is a reporter from "The New York Times" in
Buenos Aires. He joins us live via Skype. Explain what this bill means for retirees who have spent years and years paying into the system. What
are they going to be getting back now?
DANIEL POLITI, REPORTER, "THE NEW YORK TIMES": Well, what the bill does is, it changes the formula of how the increases are calculated. So
obviously, Argentina is a very inflationary economy, especially in the last decade or so. And so, the way that these increases are being done, used to
be twice a year now three times a year. And what is used to calculate those increases is changing. That's what the bill was all about.
ASHER: And what will it mean for the deficit then in Argentina?
POLITI: It's going to cut the deficit 56 billion pesos, around $3.2 billion. It is going to save the money for the government. The government
is arguing that it's not really austerity, because it's a change in the formula, and it's -- I mean, it's a complicated issue, but basically,
they're going to take into account inflation as a more important part of that formula than they used to, before it used to be tax revenue and wages.
Now it's more -- mostly inflation and part of the government -- President Macri's government, part of his plan is to cut taxes. So, he's saying we
didn't change the formula. Retirees would also see a cut in their pension. So, this is a big debate. The truth of the matter is, next year retirees
are going to get smaller increases than they would have otherwise. And it's not just retirees. Also, welfare programs are tied to this formula.
So, this affects almost 15 or 17 million people.
ASHER: And actually, as we can tell by the images on the screen, these reforms have been hugely unpopular. President Macri actually being forced
to -- forced his hand in terms of some concessions to people protesting. Daniel Politi, thank you so much, we have to cut it short, with thank you
so much for joining us.
POLITI: Thank you.
The U.S. Housing Secretary, Ben Carson, says he's impressed with recovery efforts in Puerto Rico. Congress has proposed an $81 billion aid package
for areas hit by hurricanes this year. This as CNN investigation prompted a review of hurricane-related deaths in Puerto Rico. Here's our BILL WEIR
with more.
(BEGIN VIDEOTAPE)
BILL WEIR, CNN CORRESPONDENT (voice-over): When we first met Deanna and Miguel in the hills of Aguas Buenas. They had just made it through the
worst storm of their lives. But the fight for survival was just beginning. The Vietnam vet had a just few doses of insulin spoiling in a powerless
fridge. When I went back a month later the transmission tower that nearly crushed them inside their home was back up.
(on camera): Wow, that's a good sign. Look at that, they got it back up. How are you?
(voice-over): Folks at the VA had seen our story and sent help. Miguel was resting, and Deanna's spirits were high. I'm going to keep fighting
she said. And then pointed up. They put a flag on top of the tower, but just before Thanksgiving her hope turned to grief and she wept atop the
flag that's on Miguel's coffin. The aftermath was just too much for him. But will he be counted as a victim of hurricane Maria? After reporting by
CNN and others, sparked an official review the fatality number could jump from 63 to over 1,000.
But that is just one horrible puzzle to solve here.
(on camera): How the hell did you get the contract?
(voice-over): Whitefish, the tiny company promised $300 million to help fix the grid was fired just weeks into the job. The head of the island's
power authority quit amid the scandal. And now as the Army Corps of Engineers struggles through jungle terrain a third of the island remains in
the dark. About 20,000 blue roof tarps have been installed. But another 50,000 are waiting. But Puerto Rico is just one of dozens of disaster
zones from the Caribbean to California. Nearly 5 million Americans have filed for federal aid in just the last few months. And among those begging
for help is the guy in charge of helping.
BROCK LONG, FEMA ADMINISTRATOR: I haven't even been here six months yet. And what I hope to do is inform Americans about how complex this mission
is. It might be a time to sit back and say, are we in charge of too much?
WEIR: After a career as an emergency manager in Georgia and Alabama, Brock Long was tapped by President Trump right before one of the most destructive
summers in American history. But he's been there long enough to say that FEMA is broke, and the system broken. Many of his 19,000 personnel have
worked such long hours. They've hit a pay cap and will have to give back overtime.
(on camera): What does that do for morale? Are there people who are essentially working for free?
[16:55:00] LONG: We've got to fix that problem. And I've been very vocal within Congress. I mean, you know, yes, it impacts morale. We cannot do
this alone. Any time FEMA is the first responder and primary responder, like we were in Puerto Rico, it's never an ideal situation. But I do
believe, for example, with Puerto Rico, that we kept that island from complete and total collapse.
WEIR: You think so?
LONG: I do.
WEIR (voice-over): But things are so dire there now, 10 percent of the island has evacuated to Florida. Stephanie and Victoria are among the
quarter million Puerto Ricans who have fled so far. They are grateful to Miami's St. Thomas University for taking them in, but they're worried
about an entire future in flux.
(on camera): Do you feel like Americans on that island? Do you feel like second class Americans?
STEPHANIE ROSANO, PUERTO RICAN WHO EVACUATED TO FLORIDA: It's like we feel we aren't a priority, you know, we aren't being taken care of we deserve to
be taken on the island.
VICTORIA ROSANO, PUERTO RICAN WHO EVACUATED TO FLORIDA: And we need the help. We are really needing the help.
WEIR: So, when President Trump goes to Puerto Rico, for example, and throws paper towels to storm survivors, what sort of message does that send
and how are you graded on that?
LONG: You know what, President Trump has been incredibly supportive of emergency management. At one point we were in day-to-day conversations
with the White House. And he is highly involved. He calls me directly. He's very engaged. His message to me is help people. And expedite the
processes to do so. People are excited and asking, hey, what about me back here. He picks it up, he throws it, and the media captured it and can spin
that story anyway they want, but I was in the room. He generally cares about the people in Puerto Rico, about the people in California, about the
Americans in Texas and Florida as well.
(END VIDEOTAPE)
ASHER: All right, guys. That is QUEST MEANS BUSINESS' with me, Zain Asher and for my colleague, Richard Quest. Thank you so much for watching. I'll
be back tomorrow. You're watching CNN.
END
