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ERIN BURNETT OUTFRONT

Trump Rallying Supporters in Nevada; Trump Campaign: Bill Clinton is Now Our Best Surrogate; Trump Lived Lavishly Despite $916M Loss. Aired 7-8p ET

Aired October 5, 2016 - 19:00   ET

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


[19:00:10] ERIN BURNETT, CNN ANCHOR: OUTFRONT next, the breaking news. Donald Trump speaking live this hour in the crucial state of Nevada as new details emerged about Trump's debate strategy. Is he running out of time?

Plus, Donald Trump claimed nearly a billion dollars of losses in a year? But did it stop him from living a lavish lifestyle? Our special report.

And Bill Clinton in damage control mode after calling ObamaCare the crazy system. Is he doing his wife more harm than good? Let's go OUTFRONT.

And good evening, I'm Erin Burnett. OUTFRONT tonight the breaking news. It is down to the wire. Donald Trump at this hour rallying supporters in the crucial swing state of Nevada. There are less than five weeks until voting and the slew of national and state polls showing Trump trailing Hillary Clinton. Can he turn it around just days ahead of the next debate? Trump today celebrating running-mate Mike Pence's well-received performance at the VP debate and basking in some reflected glory.

(BEGIN VIDEO CLIP)

DONALD TRUMP (R), PRESIDENTIAL NOMINEE: I'd argue that Mike had the single most decisive victory in the history of vice presidential debates. I believe that too. And last night America also got to look firsthand at my judgment.

(END VIDEO CLIP)

BURNETT: Now, the next all important presidential debate is just four days away. This time it will be a town hall debate. Half of the questions coming from people in the audience, just citizens of this country. Will Trump take a lesson from Pence and prep more, study more ahead of the face-off? Tomorrow, trump attends the town hall meeting in New Hampshire which is being built as the dry run for Sunday.

New Jersey Governor Chris Christie is helping Trump prepare. It was a format that the New Jersey Governor did again and again and again in the state of New Hampshire. Hillary Clinton is off the campaign trail huddling with advisors prepping for the debate. Jim Acosta is OUTFRONT tonight at the Trump rally in Reno. And Jim,

obviously the pressure is now on Trump. He got the assist from Mike Pence. The pressure is now all on Donald Trump and Sunday night.

JIM ACOSTA, CNN CORRESPONDENT: Absolutely, Erin. Mike Pence did so well last night at that vice presidential debate, he was generating talk of Mike Pence in 2020. That is not the effect that the Trump campaign intended. And Mike Pence spent part of the day trying to tamp that down. But it certainly puts pressure on Donald Trump to outdo his number two.

(BEGIN VIDEOTAPE)

ACOSTA (voice-over): Donald Trump is taking a victory lap. Declaring the bottom of his ticket came out on top in the vice presidential debate.

TRUMP: Mike Pence did an incredible job. And I'm getting a lot of credit. Because that is really my first so called choice. I'd argue that Mike had the single most decisive victor in the history of vice presidential debates.

(CROSSTALK)

ELAINE QUIJANO, DEBATE MODERATOR: Gentlemen, the people at home cannot understand either one of you.

ACOSTA: But in the rumble of the running mates, Mike Pence was at times sprinting as fast as he could away from Trump as Tim Kaine was in hot pursuit.

GOV. MIKE PENCE (R), VICE PRESIDENTIAL NOMINEE: I'm happy to defend him. Most of what you said is completely false and the American people know that.

ACOSTA: While the Indiana Governor state cool deflecting most of Kaine's attacks, Democrats are seizing on Pence's defense of Trump's past comment that some undocumented Mexican immigrants are rapists and criminals as a defining moments.

PENCE: Look, he whipped out that Mexican thing again. He, look --

TIM KAINE (D), VICE PRESIDENTIAL NOMINEE: Can you defend that?

PENCE: There are criminal aliens in this country. And he also said many of them are good people. You keep leaving that out of your quote.

ACOSTA: During the debate, Pence was talking tough on Putin insisting a President Trump would stir down the Russian leader in Syria. That is despite reservations voiced by Trump himself.

TRUMP: I would have stayed out of Syria.

PENCE: If Russia chooses to be involved and continue, I should say to be involved, in this barbaric attack on civilians in Aleppo, the United States of America should be prepared to use military force.

ACOSTA: Still. Post-debate polls show the Reganesque performance carried the night. The Indiana governor shrugged off the likelihood that Trump didn't pay federal income taxes for nearly two decades.

KAINE: He stood on the stage last week. And when Hillary said you haven't been paying taxes, he said, that makes me smart. So it is smart not to pay for our military. It's smart not pay for veterans.

PENCE: Senator, do you taken all the deductions that you are entitled too?

ACOSTA: But after the debate, when Trump's son Eric was asked by Dana Bash whether his father had in fact paid any federal income taxes over the last 20 years, his answer hardly put the matter to rest.

ERIC TRUMP, SON OF DONALD TRUMP: Of course. Yes absolutely. My father paid a tremendous amount of tax. We as a company pay a tremendous amount of tax.

(END VIDEOTAPE)

ACOSTA: Now, unlike the last debate. Donald Trump's top advisors are actually talking up his chances for this upcoming face-off with Hillary Clinton. Campaign Manager Kellyanne Conway is saying that the town hall format coming up on Sunday is tailor made for Donald Trump and she's pushing back on any notion that Trump is taking on a lighter schedule. Heading into Sunday, Erin as Kellyanne Conway told me earlier today, that is what Hillary Clinton is doing -- Erin.

[19:05:09] BURNETT: All right. Thank you very much, Jim Acosta. And now, Jason Carroll, he is OUTFRONT in Henderson, Nevada. That is where Trump spoke this afternoon. So really, tripling down on this must win state. And Jason, now we're 24 hours away from a town hall. Trump's practice run for Sunday night's debate.

ACOSTA: Right. In sun down New Hampshire, this is where it's going to take place, the same place where Chris Christie held his town hall during the primary season last year. Look, as you say, this is going to be a dry run for Donald Trump. There was a lot of criticism that he did not prepare as well as he should have for the last debate. Clearly the camp does not want to see this happen this go around. Part of the reason they are holding this town hall, where he can sharpen his skills, get more familiar with the format.

Also, there is a question though going forward, Erin, will Donald Trump learn from some of the things that Pence arguably did well during his debate? He did not take the bait when he was challenged on some of those controversial things that Donald Trump has said about Mexican-Americans or women or Muslims. He didn't interrupt as much as well as we saw Donald Trump do during his debate with Clinton. So going forward, yes he's getting this practice but will he learn from some of things that Pence did well during his debate? That is a question that remains to be seen -- Erin.

BURNETT: All right. Jason, thank you very much. Interrupting obvious seems to matter very much. Tim Kaine tonight admitting his own wife had criticized him for interrupting too much last night.

OUTFRONT now. Manu Raju, our senior political reporter. Philip Bump, a Washington Post political reporter. Dana Bash, our chief political correspondent. And Mark Preston, our executive editor for Politics.

So, Dana, Pence won, that is what our poll says. He prepared. He was substantive. He didn't take the bait. Is Trump now going to follow Mike Pence's lead and do serious debate prep? He has just days left and he's got to turn it around.

DANA BASH, CNN CHIEF POLITICAL CORRESPONDENT: No. I mean, that is the simple, honest answer that I'm getting from sources who are familiar with Trump's preparation. His style and how he likes to prepare. Which is not a whole lot. The very fact that he is going to New Hampshire tomorrow. He wants to stay on the campaign trail. But, here is the "but." They did as Jason mentioned, convince Donald Trump that he does have to get familiar in some way, shape or form with the classic town hall format.

Again it is not just about taking questions from voters, undecided voters. He hasn't actually done as much of that as a Chris Christie or a John McCain did back in the day. People who spent a lot of time in states like New Hampshire where that is expected of them.

BURNETT: Yes.

BASH: But he still needs to have some basic skills about what do when a voter asks a question, do you stand up? Do you walk towards them? Do you address them by name? How do you show that empathy factor that Bill Clinton first did so well during the presidential town hall debate? That is the kind of thing that they have convinced Donald Trump that he needs to do. Which is why he's going to do that tomorrow night. So, preparation Mike Pence did? Not even close.

BURNETT: Not even close. Philip, I mean, so we're talking about the town hall? That's it.

PHILIP BUMP, POLITICAL REPORTER, THE WASHINGTON POST: Right.

BURNETT: That's it?

BUMP: Right. Yes, I mean, I think the point is well taken that this is a format where Donald Trump should do better. It is more casual. It's more informal. He likes having a rapport, one on one with folks in a way --

BURNETT: Right.

BUMP: -- that didn't come through in that first debate.

BURNETT: Right.

BUMP: I think it is interesting to think of this like 2012. Mitt Romney beat Barack Obama soundly in the first debate.

BURNETT: Uh-hm. BUMP: And then the second debate was a town hall that meant Obama was more casual and more comfortable. Played to his strengths. Right. Donald Trump is not a Barack Obama type politician for a lot of reasons. And I think that he will be challenged in a way to, you know, follow-up on policy and so on and so forth but it is going to be harder for Hillary Clinton goad him there as well which is one of the main reasons --

BURNETT: You know, Manu, I'm remembering, I had hosted some town halls with Donald Trump on the business side and he did like to interact with people. He let people come in and touch his hair at times. I mean, I don't know if you'd seen anything like that.

(LAUGHTER)

But I am simply saying, I know he hasn't done a lot on the campaign trail, but I have been with him in that format and he did like to be with people.

MANU RAJU, CNN SENIOR POLITICAL REPORTER: This format suddenly lends itself to that. But it also lends itself to him answering very difficult questions off the cuff which we know sometimes is not Donald Trump's strength. But I would be surprised he does not take some serious lessons from not just how Mike Pence did but just the fact that he lost that first debate and he was criticized relentlessly about his tone and the way he interrupted Hillary Clinton.

I look at the way Donald Trump handled the primary debates and as instructive in this. Remember that South Carolina primary debate, Donald Trump was really a loose cannon in that debate. Attacking all his opponents. I think George W. Bush was responsible for 9/11. Then after that. The next debate. The Florida debate. He was very reserved. Muted.

BURNETT: He was completely different.

RAJU: Completely different Donald Trump. So, I would be surprised if he doesn't learn a little bit from, not just Mike Pence's performance but his own performance.

[19:10:06] BURNETT: Now, Mark, Pence did seem to try to reinvent Trump last night on some level. Here is some of what Mike Pence said last night versus what Trump has actually said.

(BEGIN VIDEO CLIP)

KAINE: Let's start with not praising Vladimir Putin as a great leader. Donald Trump and Mike Pence have said, he's a great leader. And Donald Trump --

PENCE: No, we haven't.

TRUMP: He's running this country. And at least he's a leader. You know, unlike what we have in this country.

PENCE: I think it is inarguable that Vladimir Putin has been a stronger leader in his country than Barack Obama has been in this country.

KAINE: Donald Trump believes in deportation.

TRUMP: You are going to have to deportation force and you are going to do it humanely.

KAINE: No nation should get nuclear weapons.

PENCE: Well he never said that Senator.

TRUMP: At some point we have to say, you know what? We're better off if Japan protects itself against this maniac in North Korea.

(END VIDEO CLIP)

BURNETT: Does that juxtaposition matter, Mark?

MARK PRESTON, CNN POLITICS EXECUTIVE EDITOR: Well, facts are certainly stubborn, Erin. You know, the reason why Mike Pence was able to get away with that in real time last night is because his opponent Tim Kaine was so aggressive that he really sucked up a lot of oxygen in the air. When I say the oxygen, kind of the bad oxygen. You know, Mike Pence came across in a very calm, collected manner. Even though he wasn't necessarily answering that in the, you know, truthfulness way that he possibly could.

Heading into this though, just very quickly Erin, heading into this town hall, Donald Trump cannot come in red hot. He is going to have an audience of 50 or so people in there. They will not be interacting with him other than asking the questions. These are not these big rallies.

BURNETT: Right.

PRESTON: But this is something where Donald Trump is going to have to actually answer the question. And guess what, they can go right back Erin and ask him to fulfill their answer if they don't think they got it.

BURNETT: Hmm. That could be very interesting. All right. All of you staying with me.

Next, Bill Clinton is trying to damage control. He came out in great detail, called ObamaCare the craziest thing and he laid out why. Is he a liability or an asset?

Plus, this is Hurricane Matthew as seen from space. Pretty incredible picture. A deadly storm right now headed right to Florida, millions of Americans in its path could have one of the biggest evacuation in American history. We're going to go there live to the ground.

And what was Donald Trump's life like? When he lost the billion dollars, what was he living like? Well, we're going to show you and it is pretty stupendous.

(COMMERCIAL BREAK) [19:15:53] BURNETT: Breaking news. Live pictures, as you can see. Donald Trump going to be taking the stage there at that rally in Nevada. We know he is going to be talking specifically about Bill Clinton who called ObamaCare the craziest thing in the world yesterday. Trump tweeted moments ago, quote, "Bill Clinton is right. ObamaCare is crazy, it doesn't work and doesn't make sense." By the way those are in all quote. Those are things Bill Clinton did say. "Thanks Bill for telling the truth." That is the end of Bill's tweet. The former president tried earlier today to walk his comments back. But can you, when you were in such detail?

Brianna Keilar is OUTFRONT.

(BEGIN VIDEOTAPE)

BRIANNA KEILAR, CNN SENIOR POLITICAL CORRESPONDENT (voice-over): Hillary Clinton off the trail fundraising and prepping for her second debate showdown with Donald Trump on Sunday but her big name surrogates are out in force. One time rival Bernie Sanders imploring voters to look past Clinton's unfavorable ratings on Election Day.

SEN. BERNIE SANDERS (R), FORMER PRESIDENTIAL CANDIDATE: Politics is not about personality. Now I know, if you watch TV and watch national media, they think their politics is like dancing with the stars.

(LAUGHTER)

You know, it's like the Super Bowl. The World Series. It is not. It is not entertainment. What politics is about in a Democratic society, it must be about. Is which candidate will have a positive impact on your lives.

KEILAR: Sanders is trying to rally young voters to support Clinton in Iowa where early voting is already under way and Clinton has been trailing Trump in the polls.

CHELSEA CLINTON, DAUGHTER OF HILLARY CLINTON: We don't want anyone to sit out and stay home.

KEILAR: Chelsea Clinton also in the Hawkeye State but her dad is in hot water after saying this about ObamaCare.

BILL CLINTON (D), 42ND PRESIDENT OF THE UNITED STATES: All of a sudden 25 million more people had healthcare and then the people are out there busting it, sometimes 60 hours a week wind up with their premiums doubled and their coverage cut in half. It is the craziest thing in the world.

KEILAR: Today in Ohio, Bill Clinton tried to walk it back.

BILL CLINTON: There are problems with it. And everybody knows it. The Republicans want to repeal the law. Their idea of solving the problem is to take 20 million people who got insurance and take it away from them. Give it all back to insurance companies again. Hillary's idea is recognize what the problem is.

KEILAR: Donald Trump is seizing on the assessment of President Obama's signature domestic achievement.

TRUMP: Bill Clinton torched President Obama's signature legislation. Remember Hillary Clinton called ObamaCare one of the greatest accomplishments. But Bill had different view. He said it is just a crazy system.

KEILAR: Campaign Manager Kellyanne Conway making it clear ObamaCare will come up at the next debate.

KELLYANNE CONWAY, TRUMP CAMPAIGN MANAGER: I think it is a huge issue that's been left on the table in these debates. We've got now President Bill Clinton as our best surrogate. And thinking of having him in the spin room with us in St. Louis.

(END VIDEOTAPE)

KEILAR: In the final five weeks before Election Day, the Clinton campaign has all of her big name surrogates out on the trail. You have President Obama who is supposed to be in Miami today, Erin for Secretary Clinton but that's an event that was postponed due to Hurricane Matthew. He's now scheduled to hit the trail next week in North Carolina and Ohio. And former Vice President Al Gore being added to the list, he is also going to be on the campaign trail very soon -- Erin.

BURNETT: All right. Brianna, thank you. And now Hillary Clinton supporter Karine Jean Pierre and Donald Trump supporter Jeffrey Lord join Manu and Phil who are both back with me.

Karine, look, this was not just a casual comment from Bill Clinton as you could see from the sound bite that Brianna included in her piece. He went into detail. Premiums double. Benefits cut in half. So, people who are working hard with 25 million people, the implication was essentially just jump on to the back of the system. Does he really think he can unsay what he said? He's calling this a clarification. But that was clearly what he thought yesterday.

KARINE JEAN PIERRE, HILLARY CLINTON SUPPORTER: Yes. But look, I don't think there's -- I honestly don't think there's a damager here that was done. What Bill Clinton said is that there are some people out there who are paying high insurance premium and that is a problem. Obama believes that. The President believes that. Hillary Clinton believes that. What this is turning into is the Republicans are seizing this moment, this narrative, right, to try to turn this into a discord between Obama and the Clintons which just doesn't exist. It's not what's happening here.

Bill Clinton has always been on the same message as Hillary Clinton. He has said. They have both said, ObamaCare is good but it could be better and now his words are being parsed out to be much worse than it actually is.

BURNETT: She has of course said this is a great achievement for Democrats going back to the days of Harry Truman. Staunch supporter of ObamaCare.

JEFFREY LORD, DONALD TRUMP SUPPORTER: Right.

BURNETT: That is not what a staunch supporter of ObamaCare would say.

LORD: No.

BURNETT: That is not how you would say.

[19:20:38] LORD: No. And the political point of this which I think is a serious one. I get stopped, you know, because of CNN in the grocery store. And some guy stopped me whom I don't know. And what was he upset about. He was upset about ObamaCare. He went on chapter and verse. He had a stroke, he recovered from the stroke, he had to deal with ObamaCare. He was really angry. And then included by saying, pointed finger, that is why I'm voting for Donald Trump.

So when you hear Bill Clinton say this, I can only tell you that there are people out there, regular folks, saying yes, exactly and I've had to deal with it.

BURNETT: I mean, and Manu, here is the question though. It is something that President Obama has said. This is going to be his legacy. This maybe his biggest legacy. Sure, he thinks it needs tweaks, not exactly what he wanted but this is his legacy. Hillary Clinton has said he's a staunch supporter. How much does it hurt that Bill Clinton came out and said, essentially it's spilling and it's the craziest thing in the world.

RAJU: I can tell you, Democrats in Washington and the White House are not happy about this.

BURNETT: Well, I'm sure.

RAJU: Yesterday at the White House briefing, our colleague Michelle Kosinski asked Josh Earnest, do you wish he used different words than calling it the craziest thing in the world and they said of course, that was Josh Earnest on the record --

BURNETT: Right. Admitting that.

RAJU: Admitting that.

BURNETT: Ordinarily they would not directly admit that.

RAJU: Absolutely.

BURNETT: Yes.

RAJU: And that is the double edged sword of Bill Clinton. I mean, he's one of the most naturally gifted politicians there is out there but he's also can say things that put his wife in a very difficult spot. Raises a lot of questions what he would be like as a first spouse. And it also shows why the Clinton campaign has been careful at how to utilize Bill Clinton in this campaign. While he's been doing rallies, he's been doing interviews and not getting into the situations that he could get into political trouble.

BURNETT: Right. That was his own choice that he made that decision.

Philip, but you know, this is not just about ObamaCare. OK. You have President Obama and Michelle Obama certainly in her case, the most popular surrogate for Hillary Clinton. Barack Obama has said this election is about cementing his legacy. OK? Hillary Clinton has said, she's going to continue that legacy. And yet Bill Clinton has said some pretty frankly things that Republicans would love about Barack Obama. Here he is.

CLINTON: Keep in mind unlike when I became president, a lot of things are coming apart around the world now. A lot of people say, oh well. You have to understand. It is different now. It is rigged. Yes, it is rigged. Because you don't have a president who is a change maker who Congress will work them. If we believe we finally come to the point where we can put the awful legacy of the last eight years behind us and the seven years before that when we were practices trickledown economics and no regulations in Washington which is what caused the crash, then you should vote for her.

(END VIDEO CLIP)

(LAUGHTER)

BUMP: You know, I mean, I think Bill Clinton was president of the United States. Right? He spent eight years of people saying you are the president of the United States. And like he clearly thinks the best president of the United States that ever was, was Bill Clinton. Right? And so, that informs on how he looks at things. Yes, ObamaCare is not perfect and he just sort of goes off and starts talking about, you know, I mean I think that it is very easy to look at the flip side of what he said and say, well, yes, there also those 25 million people who got health coverage which I think is probably where we'll see this conversation evolve.

Yes. I mean, Bill Clinton's focus here as it has been for some time is, I'm talking about how Bill Clinton was this great president. I'm sure he wishes Hillary Clinton would talk more about his legacy. I'm sure he's very disappointed about all the topics about the crime bill that keep coming out, about all the things now seen as failures as a politics of change. But, you know, I think this is very easily explain through psychology and that's --

(CROSSTALK)

RAJU: -- intention from that 2008 primary --

BURNETT: That is use of the word legacy. I mean, legacy obviously is such a crucial word for our next president.

OK. Thanks to all. And next, Donald Trump claiming nearly a billion dollars in losses but at the time how was he living? Here is what he was telling the world?

(BEGIN VIDEO CLIP)

TRUMP: Trump is definitely back. Much to the chagrin of some people. (END VIDEO CLIP)

BURNETT: And Trump today reaching out to voters in Nevada. Specifically Latino voters. Not all of them oppose the wall.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I would electrify it on the top. I would put centrics on the ground to see if anybody can --

UNIDENTIFIED FEMALE: You will electrify the wall?

UNIDENTIFIED MALE: The top of it so people wouldn't go over.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

[19:28:53] BURNETT: Donald Trump under fire for his taxes tonight. His son Eric coming into his defense speaking to our Dana Bash.

(BEGIN VIDEO CLIP)

BASH: Has he paid federal income taxes over the last 18 years. Yes or no?

E. TRUMP: Yes. Of course. Absolutely.

BASH: Have you seen your father's income taxes?

E. TRUMP: Yes, I don't study the tax returns.

BASH: No. How about have you seen them? I mean --

E. TRUMP: Of course, you see tax returns.

BASH: No. Have you seen your father's tax returns --

E. TRUMP: I'm answering the question. Of course I've seen my father's tax returns.

(END VIDEO CLIP)

BURNETT: Now questions about Trump's taxes of course have been swirling since The New York Times reported that he declared a $915 million loss in 1995. But that did not stop him from living big and lavishly, frankly.

Jessica Schneider OUTFRONT.

(BEGIN VIDEOTAPE)

JESSICA SCHNEIDER, CNN CORRESPONDENT (voice-over): To hear Donald Trump tell it, his business was back and better than ever at the end of 1994.

TRUMP: I think it's the best year I ever had. Yes. Trump is definitely back.

SCHNEIDER: Trump invited cameras to get a glimpse of his revamped Mar-A-Lago resort in this December 1994 interview. But only a year later, he declared a $916 million loss for reasons unknown on his 1995 state tax returns. Documents revealed by the New York Times, the loss may have allowed Trump to legally skip paying federal income taxes, for years. But despite that nearly billion dollar loss that could have been accumulated over years, including 1994 the year Trump claimed was better than ever, the real estate mogul was still in a buying mood.

TRUMP: I could have billions of dollars in debt but I also had billions of dollars in assets.

SCHNEIDER: At Mar-A-Lago, Trump's Florida estate, he paid nearly $2 million at the end of 1993 to buy an adjacent home to his empire, according to "The Palm Beach Post". We searched public records and found more than 2,000 miles away in Colorado, deeds from San Miguel County show Trump purchased three lots near Telluride for $1.1 million in March 1994.

Attorney Alan Pomerantz led the negotiations between Trump and more than 70 banks in the early '90s, when Trump was on a brink of personal bankruptcy, and he says Trump has a penchant for purchases.

(on camera): How would you describe his spending habits?

ALAN POMERANTZ, REAL ESTATE ATTORNEY: Lavish.

SCHNEIDER: Pomerantz says in the beginning of 1990, Trump owed a combined $4 billion to dozen of banks and about $800 million was personally guaranteed from his own assets.

It was a grim reality Trump laughed off a few years later in 1994.

TRUMP: I was walking down 5th Avenue and I said to Marla, do you see that man over there? And it was a man who was a beggar in front of Tiffany. I said, he's worth $900 million more than me.

SCHNEIDER: Trump's admittedly dire financial straits didn't stop the Trump organization from securing a $4 million mortgage for a Bedford, New York estate in Westchester at the end of 1995. Or from getting a $10 million loan to purchase 40 Wall Street in Lower Manhattan in 1996, according to New York City Public Records.

Real estate investment expert David Eisenberg said Trump's reported loss on his tax returns didn't stymie his spending power.

DAVID EYZENBERG, NYU REAL ESTATE FINANCE PROFESSOR: Tax losses sometimes have noting to do with cash flow, and he was living the lifestyle that he was accustomed to.

(END VIDEOTAPE)

ERIN BURNETT, CNN ANCHOR: I mean, living a lifestyle he was accustomed to and doing it through more debt. SCHNEIDER: Exactly. You know, Donald Trump has repeatedly declared

that he is the king of debt. This summer, he tweeted about it, saying that he made a fortune off of his debt, that debt made him a great businessman. But in the same tweets, saying that he would actually fix the debt of this nation. So, we'll see.

BURNETT: Certainly a man who's built his fortune on debt and leverage and getting rid -- all right. Thank you so much. Pretty incredible to see that.

Well, Trump's loss seems huge, right? When you talk about a billion dollars. But where does it really rank? Like what are the facts? It sounds big, is it?

Well, Tom Foreman joins me now. He has put this number into perspective, which is the crucial perspective we need, Tom.

So, how unusual is it, $916 million?

TOM FOREMAN, CNN CORRESPONDENT: It's pretty unusual. Hard to imagine anyone surviving that kind of loss and moving forward. In fact, an expert with the Tax Foundation told "The Wall Street Journal" this represented almost 2 percent of all the net operating losses for businesses that year in 1995 in the United States.

Another way of looking at it, you would have to gather together more than 9,000 other average businesses and put all of their losses together to equal how much Trump lost that year.

So, how did he survive this? Well, one of the things maybe that there are unique laws that play to real estate people that don't apply to everybody else and that may have played a role here. These deductions that real estate professionals are written into the tax code.

Among the things that these tax code provision provide is the ability for people to function a little bit as an individual and as a company simultaneously in terms of their tax liability. And it allows them to use their real estate losses to offset their income. And we don't know if that's what Trump did here, but all of that was available to him. And these laws were actually put into place in the 1980s, Erin, to keep real estate people from being unfairly tax and suffering too much from market fluctuations. But what's happened to Trump and others like him is why some tax reform people think it needs to be reformed again.

BURNETT: Right. Of course, they say, you have to invest in real estate. You need years and years of investing. You want people to do it, do good times and bad. That's the argument for it. Obviously, it needs reform.

But beyond the real estate situation, how widespread is it, Tom? The practice of avoiding taxes, perfectly legally by big corporations? Do people -- do companies do what Trump did?

FOREMAN: Well, it certainly looks like a lot of them do. A new report out this week from a couple of progressive groups out there that said that if you look at the Fortune 500 companies, 70 percent of them use offshore tax havens, for example. And in those tax havens, they have put $2.2 trillion in profits beyond the reach of Uncle Sam. Now, how much does that amount to? Well, their argument is, if you could somehow claw this all back.

Now, remember, these are liberal groups that promote that agenda. But if you could bring it all back here, they say it would automatically at a 6 percent rate put $718 billion extra dollars into the federal bank account -- Erin.

BURNETT: It is pretty stunning when you think about it. And that, of course, is something Donald Trump and Hillary Clinton have said needs serious reform, which is pretty stunning when you think about it.

Now, of course, it's pretty something when you think about it.

[19:35:01] And that, of course, is something both Donald Trump and Hillary Clinton have said need serious reform, which is companies parking all that money overseas.

Thank you, Tom Forearm.

And Dana Bash and Mark Preston are back with me now.

And, Dana, you know, this whole issue, you know, Donald Trump living so lavishly. It's hard to comprehend, but he was able to do it. It's sort of once you get rich enough, it seems people assume you'll eventually get back on your feet.

You asked Eric Trump directly whether his father pays federal taxes, he said yes. But obviously, there is still no proof. Is there any chance those returns come out?

DANA BASH, CNN CHIEF POLITICAL CORRESPONDENT: I think it's very slim. Very slim that the returns come out.

They have gotten this far and it is hard to imagine anything beyond what we've seen even over the weekend with the reporting from "The New York Times" on that huge almost billion loss. The fact that he still hasn't done it, I don't see it changing.

The one thing I do find fascinating is the politics of this all, how the Clinton campaign is trying to use this not so much as the see, he doesn't really get business, because people do sort of see Donald Trump as a lavish guy and they know that he had ups and downs. He wrote a book called "The Art of the Comeback".

BURNETT: Right.

BASH: But more of a patriotic issue. That how can somebody who wants to be president not pay taxes to support the military, infrastructure -- things that he's now saying are important and lacking.

BURNETT: And, of course, Mark, to that point that Dana is making, Trump has touted his use of the tax laws. He says this is what someone who's really smart and who knows how the system works would do. Here's what he said.

(BEGIN VIDEO CLIP)

TRUMP: I have legally used the tax laws to my benefit, and to the benefit of my company, my investors and my employees. I have brilliantly used those laws.

(END VIDEO CLIP)

BURNETT: I have brilliant used those laws, Mark, he said. The lawyer who signed off on that particular tax returns says, no, he was the one that did the work and figured out how do it.

Does this -- does this undermine Trump or just simply prove that he indeed can find smart, clever people to put in the right position?

MARK PRESTON, CNN POLITICS EXECUTIVE EDITOR: Well, let me keep this short. It should undermine. It should be devastating. It would kill any other politician at this point. It is not sticking to Donald Trump.

Look, I think his supporters, Erin, are looking at him and they see hope in him. They say, look, if he can do it, I can do it. They like the idea of him being the comeback kid, so to speak, and Donald Trump can simply say, oh, I have used the tax system to my benefit, but now, I work for you. That is the new line. We'll see if it continues.

But right now, the lack of release of his tax records hasn't hurt him.

BURNETT: Yes. All right. Thank you both very much.

And next, the breaking news, a massive hurricane right now heading to Florida. Massive flooding, death across the Caribbean. Our report coming up.

And outrage among some Latino voters after this remark last night.

(BEGIN VIDEO CLIP)

GOV. MIKE PENCE (R), VICE PRESIDENTIAL NOMINEE: Senator, you have whipped out that Mexican thing again.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

[19:41:53] BURNETT: Breaking news, Donald Trump on the stump at this hour in Nevada, trying to win over Latinos, a group that makes about 20 percent of the voters in that must-win state. This after this exchange between Tim Kaine and Mike Pence.

(BEGIN VIDEO CLIP)

SEN. TIM KAINE (D), VICE PRESIDENTIAL NOMINEE: When Donald Trump says women should be punished or Mexicans are rapist or criminals, or Johnny McCain is not a hero, he's showing you who he is. PENCE: Senator, you whipped out that Mexican thing again.

(END VIDEO CLIP)

BURNETT: Kyung Lah is OUTFRONT with tonight's number.

(BEGIN VIDEOTAPE)

KYUNG LAH, CNN NATIONAL CORRESPONDENT (voice-over): The battleground state of Nevada -- emphasis on battle.

The guy in the red Trump shirt --

JOHN ELIZONDO, DONALD TRUMP SUPPORTER: Don't forget to vote.

LAH: -- is John Elizondo.

ELIZONDO: Don't forget to vote. Don't forget to vote. Don't forget to vote.

LAH: Proud Latino for Trump.

(on camera): Do you think that Latinos in Nevada are even considering Trump?

ELIZONDO: Absolutely. Absolutely.

LAH: But the great majority are going Democrat.

ELIZONDO: We'll find out. I don't think so. I don't feel that way.

LAH (voice-over): The limo driver believes it's a mistake to think Latinos who make up approximately 20 percent of all voters in Nevada are a uniform voting bloc.

ELIZONDO: Time to wipe the crap out of Washington with Trump.

You know what toilet paper does, huh?

LAH (on camera): Certainly.

ELIZONDO: It wipes the crap from your hoo-ha! So I tell people there is a lot of crap in Washington.

LAH (voice-over): Trump's tough talk is why even though Elizondo's mother and grandparents immigrated from Mexico, his grandparents illegally, he backs Trump's immigration policy like the wall.

ELIZONDO: I would electrify it on the top. I'll put sensors in the ground to see if anybody digging through --

LAH (on camera): You'll electrify the wall?

ELIZONDO: The top of it, so people wouldn't go over it. Yes, I would. I think more of the Latinos are asking questions, especially now. LAH (voice-over): Refrigeration technician Jehovanny Molina, an

immigrant from Guatemala, has plenty of questions. An evangelical Christian, the married father of three is looking for a higher power for an answer before November.

(on camera): Who are you going to vote for?

JEHOVANNY MOLINA, UNDECIDED VOTER: I'm not sure yet.

LAH: Why would you vote for Donald Trump?

MOLINA: I don't see myself voting for him.

LAH (voice-over): Molina's biggest problem with Trump, like many Hispanic voters, is his stance on immigration.

TRUMP: They are bringing drugs. They are bringing crime. They are rapists.

LAH (on camera): Then wouldn't you vote for Hillary Clinton?

MOLINA: If you would think.

LAH (voice-over): But many evangelicals are against Clinton's stance on abortion and same sex marriage.

MOLINA: Most people that I've talked to are decided, just like I am.

LAH: That undecided voter is the target for Culinary Union 226. The union touts 57,000 members, more than half of them Latino. The union says it will deliver the Latino vote for Democrats.

CHRISTINA AGUILA, HILLARY CLINTON SUPPORTER: I love this lady.

LAH: Christina Aguila takes this election personally.

(on camera): You took a leave of absence from work?

AGUILA: Yes.

LAH (voice-over): She emigrated from Mexico. She's a military mom. Her son fought in Iraq.

[19:45:00] "I'm walking because even though it is hot", she says, "and I'm thirsty, Latinos are a team fighting for our rights."

(END VIDEOTAPE)

LAH: Latino support for Clinton has remained strong, but true to its nature as a swing state, polls in the state of Nevada have swung back and forth in favor of both candidates throughout the year. All eyes will be on the state on October 19th when Las Vegas hosts the last presidential debate -- Erin.

BURNETT: All right. Kyung, thank you. And now, millions across the Southeast are in the path of a deadly hurricane. It could be the biggest to hit since the year of Katrina hit. Where will it strike?

And the breaking news. A contractor, another one arrested for allegedly stealing top secret classified information. Our live report.

And Jeanne Moos on Tim Kaine's eyebrows stealing the show.

(COMMERCIAL BREAK)

BURNETT: Breaking news: Hurricane Matthew barreling towards the United States at this hour and it is getting stronger. Right now, a deadly category three, winds at 120 miles an hour, 16 million in its path. And it is forecast to become even more deadly, perhaps making land fall as a category four storm.

Now, Florida could get a direct hit. Keep in mind that Katrina hit this country as a category three. This would be the strongest storm to hit the United States since at least 2005, the year Katrina hit.

[19:50:05] Tom Sater is OUTFRONT in the CNN Weather Center.

And, Tom, when do we expect this massive storm to strike?

TOM SATER, CNN METEOROLOGIST: You know, Erin, typically, it's easier to forecast the track than it is the intensity. However with this storm, it's been the opposite. I can give you an idea within a frame of several hours and maybe, you know, several miles.

But again, what we do know is it did make landfall as a four into Cuba as well, interacted with land, it's a three, and will become a four again.

But, first, let's talk about the Bahamas. There are 700 islands here that make up the Bahamas islands, 400,000 residents. But the greatest population is in Nassau, 245,000 live there, and they are going to be in the worse quadrant for the winds, and most likely go through hell tonight, in the darkness of the night, most likely many losing power.

This computer model that's usually reliable keeps it offshore. That would be best-case scenario. We're not so much in agreement with that. We think it is going to be closer to shore. We do agree with the movement and the curve.

Now, the National Hurricane Center has this strengthened to a category four, but places at a little closer to land, making landfall. And then, what is this? Curving back around.

Let me show, 14 computer models, all in agreement. Some making landfall and they all agree with the turn. But nine of the 14 want to turn back around. Is it possible not only one but two landfalls? It's unusual. It's happened before with Ivan and Gene and others.

But let me show the models. European model right now places land fall near Cape Canaveral Friday at 7:00 a.m. It's getting in agreement with the American model now and that is what you want, agreements, although you don't want to see this.

This is earlier in the American model, further to the south, near Vero Beach, at around 2:00 a.m. One thing we know for sure, the warnings have now been extended, and here's why. When you look at the larger pattern, what's going to happen here, as the storm winds approach and in red, you're going to see some hurricane warning winds, or hurricane winds that is. We're going to see downed trees and power lines, 8 to 12 inches of rainfall. If it moves more inland, it is going to create more destruction.

A power outage forecast came out today, Erin, and possibly by Tuesday, we could be looking at 7 million Americans in the dark.

BURNETT: Wow. It's absolutely stunning.

All right. Thank you very much, Tom, as we follow that.

More breaking news, though, right now. A contractor working for the National Security Agency, another one, arrested for allegedly stealing classified information, top secret. The FBI believes this man, Harold Martin, stole classified information about the hacking tool that the NSA was using to break into other country's computer systems. And, of course, the other shock here is that he works for the same company Edward Snowden did.

Pamela Brown is OUTFRONT tonight.

I mean, Pam, this is pretty stunning.

PAM BROWN, CNN JUSTICE CORRESPONDENT: It is, it's a big blow to the NSA, Erin. The FBI now accusing Harold Martin of stealing some of the nation's most sensitive secrets. Some classified at the highest levels, and as you pointed out, Martin worked at Booz Allen Hamilton as contractor to the National Security Agency, the same contractor that employed Edward Snowden.

So, the FBI believes Martin stole documents detailing a sophisticated hacking tool that the NSA developed to break in to foreign computer systems, and authorities are still trying to determine what his motivation was. Sources say that the FBI and NSA have been suspicion of Martin for some time, and then after a computer code for a U.S. hacking tool showed up on the Internet recently, you may recall that, the investigation into him intensified.

And in that case, someone calling themselves the shadow brokers was offering the tool for sale on line. The identity of the shadow brokers has not been revealed.

Now, Martin was arrested back in August but the arrest was also made public today after the "New York Times" reported his arrest.

CNN spoke with Martin's wife outside his home in the D.C. suburbs and this is what she said.

(BEGIN VIDEO CLIP)

DEBBIE MARTIN, WIFE OF HAROLD MARTIN: He's a good ma and that is you will all I can really tell you, OK? I would greatly appreciate it if you guys would respect my privacy and respect my family's privacy. I love him very much and he's a good man.

(END VIDEO CLIP)

BROWN: And his attorneys issued a statement that reads in part, "There is no evidence that Martin betrayed his country. What we do know is that Mr. Martin loves his family and America. He served his nation honorably in the U.S. Navy as a lieutenant and has devoted his entire career to making America safe."

But as I said, Erin, a major blow to the NSA after the Snowden leaks. The agency tried to prevent any future so-called insider threats -- Erin.

BURNETT: All right. Thank you very much, Pamela.

And OUTFRONT next: Jeanne Moos on how Tim Kaine's left eyebrow took the world by storm.

(COMMERCIAL BREAK)

[19:58:08] BURNETT: And now the eyebrow. Here's Jeanne Moos.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT: You could say Tim Kaine browbeat his opponent --

KAINE: Slobs.

MOOS: -- with his eyebrows.

KAINE: He said, "That makes me smart."

MOOS: The debate was best summed up by the Grinch.

GRINCH: Hmm. It is a wonderful night for eyebrows.

MOOS: From the first word Tim Kaine uttered. His eyebrows rose to the occasion.

KAINE: That passion throughout life.

MOOS: His left brow in particular.

KAINE: Twitter war with Miss Universe.

MOOS: In the political universe, Kaine is famous for his levitating brow.

UNIDENTIFIED MALE: Tim Kaine, of course, is the people's eyebrow.

MOOS: The brows first came to national attention back in 2006.

KAINE: My fellow Americans --

MOOS: As Kaine gave the Democratic response to the State of the Union.

KAINE: From huge surpluses.

MOOS: The state of his brows was up.

KAINE: When we work together.

MOOS: Though the left brow seemed to work separately.

KAINE: We must.

MOOS: Tim Kaine's eyebrow must have its own Twitter account. "Clear eyes. Full brows. Can't lose."

By the time he was nominated for V.P. --

KAINE: Do you really believe him?

MOOS: Kaine seemed to have tamed his brows a bit. They were no longer the furry caterpillars of a decade ago.

KAINE: It's an honor tonight.

MOOS: But even the more buttoned down of Tuesday's debate launched GIFs and tweets, speculation that Kaine prepped for the debate but lifting weights for his eyebrows.

Can we all be honest and admit this VP debate is really about eyebrows versus no eyebrows?

"Fun fact, Mike Pence doesn't have eyebrows," read another tweet.

The Democrats definitely don't think Kaine's eyebrows are low brow.

They flaunt them on tee shirts. Kaine himself Instagrammed a pumpkin with an arched brow last Halloween.

KAINE: I have an uncontrollable left eyebrow.

MOOS: He once gave Jon Stewart a button.

An eyebrow raising debate may be a distraction, but how bad can it be being compared to Spock and the rock.

KAINE: He trash talks --

MOOS: Jeanne Moos --

KAINE: Hard work.

MOOS: -- CNN -- KAINE: There's a better way.

MOOS: -- New York.

(END VIDEOTAPE)

BURNETT: And thanks for joining us.

Anderson starts now.