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ERIN BURNETT OUTFRONT

Trump Speaks With Taiwan's President, Risks International Rift; Former Bush Adviser On Trump's Call: "Chinese Will Go Ballistic"; Former Top Diplomat On Trump's Call: "He's Winging It"; Shouting Match Erupts Between Clinton, Trump Aides; Insults Fly Between Trump And Clinton Camps; Trump Confirms Defense Secretary Pick is "Mad Dog" Mattis; Trump Taps Another General After Criticizing Them; Interview with Representative Ryan Zinke; Trump Tries to Block Recounts as Pennsylvania Lead Shrinks. Aired 7-8p ET

Aired December 2, 2016 - 19:00   ET

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


[19:00:00] WOLF BLIZTER, CNN ANCHOR: ... "OutFront" starts right now.

ERIN BURNETT, CNN ANCHOR: "OutFront" next, breaking news. Trump risking a major international incident breaking protocol, doing something no president has done in nearly 40 years. Plus, Trump and Clinton aides come face to face, insults fly and it's all on tape, you will hear it tonight. And President Obama's gift to the president- elect, why Trump is calling it a joke? Let's go "OutFront."

And good evening, I'm Erin Burnett. "OutFront" tonight, breaking news, President-elect Donald Trump shocking the world with a verboten phone call. Trump speaking by phone with the president of Taiwan, which is something, no American president has done in nearly 40 years. The reason is that China considers Taiwan part of its territory.

Democratic Senator Chris Murphy who is on the Foreign Relations Committee says Trump's move could start war, writing on Twitter in part, "These are major pivots in foreign policy without any plan. That's how wars start."

The U.S. said had no diplomatic relations with Taiwan since 1979, respecting the so-called "One-China Policy." Now, the Trump transition team releasing a statement announcing the call saying that during the discussion Trump and the Taiwanese president "Noted the close economic, political, and security ties that exist between Taiwan and the United States. President-elect Trump also congratulated President Tsai on becoming President of Taiwan earlier this year."

Now, we are learning tonight, at this hour, that an adviser to the Trump transition, Stephen Yates is in Taiwan and helped facilitate this call. This was no mistake. Yates is a former adviser to Vice President Dick Cheney, known to be pro Taiwan. Further shocking the world, the Obama administration has said it was not told about this call, no idea that it happened until afterwards.

Jim Sciutto was based in Beijing as a U.S. diplomat, has covered China for 20 years. Jim, this is a stunning development tonight.

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: Erin, if there was an expressway to cause a diplomatic uproar with China, this would be the way to do it. Clearly, it's a deep relationship U.S. and Taiwan. The U.S. sells arms to Taiwan, right? So it's never been simple between the U.S., Taiwan and China.

However, it's a relationship with China that is based on recognition, based on recognition of Beijing, of China as China. We have a One- China policy. We have since 1979. You recognized China as the seat at the U.N. Security Council. You recognized China, Beijing as the seat of government of China and Taiwan something different.

To have the U.S. head of state call the Taiwanese head of state after his election as a president-elect, there's a reason that hasn't happened for 40 years, because those communications between the heads of state should be between the head of the Chinese state and the U.S. state.

This is not just a disruption of protocol. It is something that has enormous diplomatic and political meaning, certainly to China. I'll tell you tonight, it is 100 percent certain there heads spinning in Beijing.

BURNETT: I mean it is -- in essence, truly, incredible that this is happening tonight. Jim, thank you.

I want to go to Ivan Watson now, our Senior International Correspondent based in Hong Kong, actually here locally at New York tonight. And Ivan, we are awaiting right now the Chinese response, obviously, early in the morning in Beijing.

IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes. It's only 8:00 in the morning on a Saturday there, so it is a bit early. And it will be very interesting to see the response, because at every high level meeting that you have between the Chinese and U.S. officials the policies on Taiwan reiterated again and again.

And the Chinese will certainly see this as an infringement on what they see as their sovereignty, because they view Taiwan as a renegade province. And do not like any sign that the U.S. could recognize it as a separate state, for instance, by talking to the president of Taiwan.

BURNETT: I mean -- and this is for them a pretty stunning thing to wake up to. I mean, Barack Obama sold them those weapons, but when it came to diplomacy he stuck to the policy. This is the violation of that.

WATSON: The U.S. doesn't have an embassy in Taiwan. It has an American Institute of China there. So it doesn't have official diplomatic relations and it's a very carefully calibrated relationship.

Yes, the U.S. sells weapon, billions of the dollars with the weapon to Taiwan, but it doesn't officially hold meetings with the government there. And China is the world's second largest economy. We have massive trade with China. It is a growing super power there and that relationship has to be balanced very carefully. What will the reaction be? It's a little bit too early to say, but I can anticipate the Chinese State media at the very least ...

BURNETT: Right.

WATSON: ... will likely blast this conversation.

BURNETT: Oh, yeah, you would imagine. All right, Ivan, stay with me.

I want to go now to Ambassador Christopher Hill, joining me on the phone. He was the Assistant Secretary of State for East Asian and Pacific Affairs under President George W. Bush. Ambassador Hill, when you heard this, what was your reaction? Should Trump have had this conversation with the president of Taiwan?

AMB. CHRISTOPHER HILL, FORMER ASSISTANT SECRETARY OF STATE, EAST ASIA: Well, obviously he should not have.

[19:05:01] We have had for 40 years rather clear policies of how to implement the One-China policy. Eight years during the Reagan administration this is never happened. Four years during the Bush Senior administration, this is never happened. Eight years of Clinton, eight years of George W. Bush and eight years of Obama. So this is a real break.

Obviously, it was an example of what is all too often happening now with this incoming administration, this tendency to wing it. What I'm concerned about is that rather than acknowledge a mistake, they will double down on it say that this is indeed an effort to change some of the terms of our One-China policy.

BURNETT: Yeah.

HILL: And that's a huge mistake. We have a lot of stuff going on with China. We got South China Sea. We got North Korea. We don't need this right now.

BURNETT: And Ambassador, you know, to your point about them doubling down, this was not a mistake. I mean, we know a pro-Taiwan advisor of Trump's team who worked closely with Dick Cheney facilitated this phone call, right? It was purposeful. We know no one in the Trump team camp consulted the White House or the State Department before the phone call was made. Was it done on purpose in secret?

HILL: Well, I do know the individual you are talking about, Stephen Yates. He worked for Dick Cheney, and he worked on Taiwan and he, you know, beavered way with really a concept that there is no such thing as the People's Republic of China.

Well, there is and this shouldn't have been done. And whether it was Stephen Yates trying to organize this, there should have been someone in the transition, perhaps the national security adviser say, "Wait a minute, let's think this through."

And clearly, there's just too much on the side of winging it and the side of deinstitutionalization that's going on that is, "Why asked the State Department? Why ask the National Security Council staff? Why not just go ahead because it feels right?" And this is not going to be the last to these kinds of things. So, things need to get cleaned up and cleaned up in a hurry in Washington.

BURNETT: Ambassador Hill, thank you very much for your time tonight. Joining me now, Ben Ferguson, host to the "Ben Furguson Radio Show," Nayyera Haq, who is the former State Department Spokesperson for Secretary Clinton and Kerry with some perspective here. David Gergen, advisor to four presidents including Reagan and Clinton, worked Nixon. There's a lot about China and, of course, Ivan Watson is back with me.

Let me start with you Ben. You just heard Ambassador Hill. This is a real break with policy. Trump is winging it. You heard Senator Murphy say, "This is how you start wars." Does Trump know what he's doing?

BEN FERGUSON, RADIO HOST "THE BEN FERGUSON SHOW": This maybe the most calm I've ever been on your show. One this is not winging it. Two, I think, you know, it was simply a phone call. And three, I think this can be use for leverage when you're dealing with China when it comes to trade deals.

This is well-thought out by Donald Trump and the people around him. The other thing is this is not going to start a war. This is a simple phone call. There are many people that say Trump is winging it. This was well-thought out by him and I think his team.

And the other point I think that should be made here is, let's not over react to this. When Barack Obama made phone calls to Cuba and change things under drastically, match of that was done in private. I think a lot of people appreciate the fact that we know about this early on before he's even been sworn in?

BURNETT: What do you think about that, David? It's an interesting point. Defense saying it's a simple phone call. Look, no president has made such a simple phone call to Taiwan's leader in 37 years. But is Trump right to throw protocol out, because -- by the way, keeping protocol in One-China has not stop China from going against the United States in the military build up, in the South China Sea, in North Korea or in trade.

DAVIDE GERGEN, FORMER PRESIDENTIAL ADVISER: Well, Donald Trump has given new meaning to an old phrase. "Bull in a China shop." I'm among those who seriously taken aback by learning about the call.

This has been the most carefully thought out relationship for years and years by Republicans and by Democratic presidents going all the way back to Richard Nixon that it is important to maintain a One-China policy, carefully preserving the independence of Taiwan, but also -- while insuring the Chinese don't cross the straits and attack Taiwan and take it over, at the same time, convincing the Taiwanese that they cannot go independent. As, you know, the Taiwanese government has already new administration now in place ...

BURNETT: Yes. GERGEN: ... that leads very heavily towards independence. And for Donald Trump to make this call is going to infuriate the Chinese because they're going to see he's actually making a huge shift in policy. And if that is the case, it's going to cause a serious disruption in our relationship with China.

BURNETT: And Ivan, would you say infuriate is the right word?

WATSON: Absolutely. And the Taiwanese feel very, very isolated. So any time when they are -- see some resemblance of international recognition, they're delighted. They celebrated that.

BURNETT: Yeah. I mean, it's incredible. Nayyera, now President Obama sold Taiwan nearly $2 billion in weapons, something Ivan talked about a moment ago. That deeply angered China, but he kept the One- China policy in tact, right?

So he kind of said one thing and did another. What's really so different between that and Trump saying, "Well, guess what, I'm going to come out and say, enough dancing around the issue here. I'm going to say, do the same thing. I'm going to put it out there publicly."

[19:10:09] Is that so wrong?

NAYYERA HAQ, FORMER STATE DEPARTMENT SPOKESWOMAN UNDER CLINTON & KERRY: Well, there are different layers and degrees of what's public, right? So there -- Barack -- President Obama made sure that there was some kind of conversation happening with China, but in the diplomatic community in the way things work in the rest of the world, in our relationship with the rest of the world. When you suddenly talk to a foreign head of state, it elevates everything. And to certainly do that before you're even in office is unprecedented.

Now, certainly, you know, this is the president-elect and he has ever right to decide to change policy. But really what's concerning about this, is that it doesn't seem to be based on any type of strategy or recognition of the relationship and the importance with U.S. economy has with China.

For example, China has the largest foreign debt holder of the United States. They have a big influence on our economy, which is part of the reason why we try to play nice in the sand box with them. And then on top of that ...

FERGUSON: Erin, with all due respect, this goes back to Donald Trump's campaign promise where he said China has been getting the better of us for the last 15, 20 years. Look at what China has been doing ...

(CROSSTALK)

HAQ: Right. And we would expect we ...

FERGUSON: Hold on, let me finish. Let me finish.

(CROSSTALK) HAQ: Let's talk -- no, no, but you cut me off. Let's finish ...

FERGUSON: Which one has been more aggressive towards the United States? The American has been ...

HAQ: Let's talk about. Let's talk about building.

FERGUSON: ... or trade war issues or there are military expansion in building islands in the middle of nowhere. What Donald Trump did today was saying, guess what, you're not going to keep pushing us around and he made a simple phone call. If people freak out in China over this, that's what their media which is a propaganda media is going to sell because that's going to ...

HAQ: And this is ...

BURNETT: Final words to you, Nayyera. Ben, I'm sorry. Go ahead, Nayyera.

(CROSSTALK)

HAQ: This is exactly what we're concerned about, is the buildings that are going on in the Trump universe. Actually, the only evidence we have of any strategy behind this is confirmation from a mayor in Taiwan that Trump has explored and declared interest in building hotels in Taiwan.

The American public has an expectation that when the president engaged with foreign leaders, it's for the safety and security of the United States and for the advancement of the American economy, not of Trump international.

BURNETT: All right, thank you very much. An interesting point, thanks to all. Next, Trump and Clinton aides facing off for the first time since the election.

(BEGIN VIDEO CLIP)

KELLYANNE CONWAY, TRUMP CAMPAIGN MANAGER: Do you think I ran a campaign where white supremacists had a platform? You're going to look me in the face and tell me that.

(END VIDEO CLIP)

BURNETT: We're going to take you inside that room. Plus, Trump's pick for Defense Secretary, General James "Mad Dog" Mattis. My guest tonight, a navy seal who served with Mattis on the battle field. And Donald Trump and the Michigan attorney general trying to bluff a recount in that state, is this David versus Goliath?

(COMMERCIAL BREAK)

[19:15:29] BURNETT: The Trump and Clinton team in a screaming match literally, a traditional post-election forum turning into a shouting match with one top operative choking up, leveling accusations of racism. Jeff Zeleny is "OutFront." (BEGIN VIDEO CLIP)

JEFF ZELENY, CNN SENIOR WASHINGTON CORRESPONDENT: A combustible mix of raw emotions and hard feelings as top advisors to Donald Trump and Hillary Clinton came face to face for the first time since the election. The Clinton team bluntly accusing the Trump campaign of fueling racism to help with the White House.

JENNIFER PALMEIRI, FORMER CLINTON CAMPAIGN COMMUNICATIONS DIRECTOR: If providing a platform for white supremacists makes me a brilliant tactician, I am glad to have lost. I would rather lose that win the way you guys did.

CONWAY: No, you wouldn't. No you wouldn't. That's very clear today, no you wouldn't, respectfully.

ZELENY: Clinton Communications Director Jennifer Palmeiri and Trump Campaign Manager Kellyanne Conway tangling over Steve Bannon, Trump's Chief Strategist and former Executive of Breitbart New, a website popular with the OutRight Movement.

PALMEIRI: And it is a very, very important moment, in our history of our country. And I think as, you know, his presidency goes forward, I'm going to be very glad to have been part of the campaign that tried ...

CONWAY: Hey, Jen, do you think I ran a campaign where white supremacists had a platform? You're going to look me in the face and tell me that.

PALMEIRI: It did, Kellyanne. It did.

CONWAY: Do you think you could had just a decent message for the white working class voters? Do you think this woman who has nothing in common with anybody ...

ZELENY: A postmortem on the presidential race, a staple of every campaign since 1972 erupted in the series of extraordinary exchanges at the Institute of Politics at Harvard University's Kennedy School of Government. The advisers looked one another squarely in the eye across a table as they argued about Clinton winning the popular vote and Trump the Electoral College.

BRAD PARSCALE, TRUMP CAMPAIGN DIGITAL DIRECTOR: It's hard to say we lost the popular vote, so that means we didn't do as well.

CONWAY: And there was nothing that said the road to popular vote anywhere, it's the road to 270.

JOEL BENENSON, CLINTON CAMPAIGN CHIEF STRATEGIST: Kellyanne, I'm not -- I started -- I premised my statement by saying that.

CONWAY: Hey guys, we won. You don't have to respond. I mean, seriously -- hold on, why is there no mandate? You've lost 60 congressional seats President Obama got there. You got -- lost more than a dozen senators, a dozen governors, 1,000 state legislatures. You just re-elected a guy who represents liberal New York, and a woman who represents San Francisco as your leader. You've learned nothing from this election.

ZELENY: The forum, a civil academic exercise in most elections is intended to write a first draft in history of the campaign. Amid the shouting, the conversation off for the window into white Trump aides believe he won, despite a string of offensive comments.

CONWAY: One thing that was missed all along in this election is something that we noticed early on, which is there's a difference to voters between what offends you and what effects you.

ZELENY: And why Clinton aides acknowledge struggling.

ROBBY MOOK, CLINTON CAMPAIGN MANAGER: Voters overwhelmingly wanted change. And we saw that. I think anybody looking at the race saw that. And obviously that did create some headwinds for Hillary.

(END VIDEO CLIP)

ZELENY: So as the Clinton campaign in denial or simply defending her one last time, Erin, perhaps it's a little bit of both. But I can tell you, sitting in that room yesterday was so tense. This is the fifth one of these forums I've been too. Bush/Gore was the first back in 2000. That was calm and civil compared to yesterday's exchange with the Trump and Clinton campaigns. Erin?

BURNETT: Thank you, Jeff. And stay with me for a moment because I want to go to Jake Tapper now. You also, Jake, had a chance to speak directly with Trump and Clinton's campaign managers at this event. Incredibly heated, what was that like?

JAKE TAPPER, CNN ANCHOR, THE LEAD: Well, it was really interesting and, again, both of them talking about the flaws and the faults on the other side in addition to focusing on FBI Director James Comey and Russian intelligence allegedly hacking into the DNC and John Podesta's e-mails. Clinton Campaign Manager Robby Mook talked a lot about the truth and about this horrible development of so called fake news. Take a listen.

(BEGIN VIDEO CLIP)

MOOK: You know, Steve Bannon ran Breitbart News, which was notorious for peddling stories like this. I'm not attacking him personally, but they peddled a lot of stories on that website that are just false. They're just not true and that reinforce sexist, racist, anti-semitic notions in people. You know, headlines that just make your, you know, are shocking and insulting and shouldn't be part of our public discourse.

TAPPER: Kellyanne?

CONWAY: I think the biggest piece of fake news in this election was that Donald Trump couldn't win. So there is that and that was peddled probably for weeks and months before the campaign, definitely in the closing days. (END VIDEO CLIP)

[19:20:01] TAPPER: And you heard there in Kellyanne Conway's response, Erin, no real acknowledgment of the fact that there was this propaganda, this disinformation put out there, just crazy stories about Hillary Clinton, crazy conspiracy theories. Some of them put forward by members of the Trump team themselves. Instead, just focusing on what she thought was the problem which was the media writing off Donald Trump.

Again, neither side really willing to give an inch when it comes to things that they could have done better, faults and mistakes that they made.

BURNETT: All right, Jake, thank you.

TAPPER: Thank you, Erin.

BURNETT: And you can see more of Jake's discussion on "State of the Union," Sunday morning. That is at 9:00.

David Gergen and Jeff Zeleny are back with me. David, you know, this is at every election years since 1972. You're a professor at Harvard's Kenney School. You know, you heard Jeff Zeleny a moment ago say that this was extraordinary. Has this ever been this heated this personal?

GERGEN: No. No one can remember it. It's been remembered as a civil affair. One, and actually where campaign managers put down their swords and often they become friends. They become comrades in arms. They both started in same trade, same industry and they get along together. So this is a shock.

I do think, you know, we have an unprecedented campaign and now we have an unprecedented aftermath. You know, the war goes on and it -- the wounds are deep. The war goes on and it does not spell good days ahead in terms of governance because if people are this angry at each other, they distrust each other this much, it's very, very hard to govern.

BURNETT: And reflecting, Jeff, what some in this country feel? I mean, look, you know, you heard, "Do you think I ran a campaign where white supremacists had a platform," said Kellyanne Conway, campaign manager for Donald Trump. "Are you going look me in the eye and tell me that?" And Jennifer Palmieri, Communications for the Hillary Clinton, "It did. Kellyanne, it did." I mean, that was pretty stunning.

ZELENY: It was.

BURNETT: Yes, go ahead.

ZELENY: And she did look her right in the eye and, you know, the reason there aren't pictures of this, it just sound. This is not intended to be a -- sort of ScreamFest (ph) on captured on camera here. This is an academic exercise. But, boy, they were sitting around a fairly small table about, you know, 8 or 10 feet from one another. And when Jennifer Palmeiri looked her in the eye she obviously believed what she was saying here. But it's also interesting to point out, I mean, they -- the Clinton campaign decided to come to this, I'm told, because they wanted to offer a defense. They wanted to defend her one last time. But they did offer a couple of things they could have done differently, particularly in Michigan and Wisconsin.

Robby Mook, the campaign manager said, "Yes, I wish we would have advertised there more and, yes, I wish we would have more organizers on the ground there." But, he said on election night when he saw things going south in Florida with white voters turning out in higher percentages in the rural parts of the state, he said, "Boy, I hope that's a phenomenon only in Florida," but soon he found out it was not.

BURNETT: All right, thanks to both of you. And next, Donald Trump naming another general to his cabinet after saying generals in this nation has been reduced to rubble. Plus, the Trump bumps on "Wall Street." Bump may be an understatement here, stocks are at an all time high, an unprecedented post-election surge. Can it continue?

(COMMERCIAL BREAK)

[19:27:14] BURNETT: Tonight, the Secretary of Defense, Ashton Carter weighing in on Trump's pick to replace him, Carter, of course, serving under President Obama saying he holds General James Mattis in the highest regards, his word. Mattis is getting another big endorsement from former Secretary of Defense Robert Gates, who met with Trump today at Trump Tower.

(BEGIN VIDEO CLIP)

ROBERT GATES, FORMER DEFENSE SECRETARY: I told him I thought his selection of General Mattis for the Secretary of Defense was terrific, very supporting.

(END VIDEO CLIP)

BURNETT: Trump and Mattis, though, disagree on some fundamental issues. Jim Sciutto is "OutFront."

(BEGIN VIDEO CLIP)

DONALD TRUMP, (R) PRESIDENTIAL-ELECT: We are going to appoint "Mad Dog" Mattis as our Secretary of Defense.

SCIUTTO: "Mad Dog," the nickname General James Mattis earned leading U.S. marines in the bloodiest battle of the Iraq war is Donald Trump's pick for Defense Secretary.

TRUMP: And he's our best. They say he's the closest thing to General George Patton that we have and it's about time.

SCIUTTO: Mattis is a seasoned combat commander with 44 years of service in the Marine Corps and key commands in both Afghanistan and Iraq, where he led troops in the 2003 invasion and later in the battle for Fallujah.

GEN. JAMES MATTIS, (RET), DEFENSE SECRETARY NOMINEE: The U.S. military is quite capable of giving our enemies their longest day and their worst day if ordered to do so.

SCIUTTO: Since retiring at Centcom. (ph) commander after disputes with the White House, Mattis has been critical of the Obama administration.

MATTIS: The next president is going to inherit a mess.

SCIUTTO: Like Trump, Mattis is hawkish on Iran.

MATTIS: The Iranian regime in my mind is the single most enduring threat to stability and peace in the Middle East.

SCIUTTO: Still, Trump and Mattis disagree on several key foreign policy challenges. Trump has praised Russia.

TRUMP: Wouldn't it be nice if we actually did get along with Russia?

SCIUTTO: Mattis sees Russia and Putin as a threat.

MATTIS: Putin goes to bed at night knowing he can break all the rules and the west will try to follow the rules. That is a very dangerous dichotomy.

SCIUTTO: Trump is in favor of bringing back the illegal practice of waterboarding terrorists.

TRUMP: I think waterboarding is fine.

SCIUTTO: Mattis opposes waterboarding. Trump telling the "New York Times" that during a meeting Mattis told him it is ineffective.

TRUMP: I said, "What do you think of waterboarding? He said, "I've never found it to be useful." He said, "I've always found -- give me a pack of cigarettes and a couple of beers and I do better with that than I do with torture."

SCIUTTO: Mattis is highly respected up and down the military ranks. A marine's marine and also a voracious reader and deep military thinker.

MAJ. GEN. JAMES "SPIDER" MARKS, U.S. ARMY, (RET.): Very dedicated, very focused and the smartest man in the room.

UNIDENTIFIED MALE: It carried around with him throughout his career a library of around 10,000 books and he's ready most of them.

[19:30:02] SCIUTTO: But his career has not been without controversy. In 2005, he came under fire for remarks in a panel discussion which seemed to make like of killing people in combat.

GEN. JAMES MATTIS (RET), U.S. MARINES: It's fun to shoot some people. I'll be right up front with you. I like brawling.

SCIUTTO: Jim Sciutto, CNN, Washington.

(END VIDEOTAPE)

ERIN BURNETT, CNN ANCHOR: And OUTFRONT tonight, Republican congressman, former Navy SEAL, Ryan Zinke, the author of "American Commander". He served with General Mattis in Iraq, when he was commander of Joint Special Forces in Iraq. And General Mattis was leading the first marine division.

So, Congressman, you are a regular contact with General Mattis. You have known him for more than a decade, served him with frankly in one of the fiercest battles in modern times.

Trump proudly uses his name "Mad Dog." He used it last night, Mad Dog, Mad Dog.

Why is General Mattis called "Mad Dog"?

REP. RYAN ZINKE (R), SERVED WITH GEN. MATTIS IN IRAQ IN 2004: Well, that's a term of endearment, quite frankly. And I know General Mattis from and this is the right guy at the right time. What he'll face is an uncertain world which we have to shore up relationships with our allies. He also will face a very bureaucratic Department of Defense. And the cut through the red tape is going to take a warrior.

General Mattis understands that the backbone of our military is the chief and sergeant and we have to make very calculated and slow decision to go to war. And if we do, let's make sure our troops in the front lines have the right equipment, right training, right rules of engagement to win effectively and decisively in the field of ballot. General Mattis brings that to the table.

BURNETT: So, let me ask you, because you just heard Trump say, you know, repeatedly you think he's in favor of favor or waterboarding. He recently said General Mattis feels differently, opened the door to perhaps changing his mind.

But the question for you is, what does General Mattis do? He is obviously a military man. He follows a chain of command. If President Trump were to order him to water board, would he do it?

ZINKE: Well, as the commander-in-chief, you also have a set of advisors around you. I think General Mattis will be a terrific advisor and give the president the right advice at the right time.

BURNETT: So, you don't think that order will come?

ZINKE: Well, if you had a decision of whether waterboarding and the city of New York city was in jeopardy and you knew an individual had information that would save the city, I think -- certainly I would. I would use any means available to save New York.

But, you know, those decisions are yet to be unfolded. I think General Mattis gave the correct response, in his experience, he hasn't seen it used effectively. We've heard reports of waterboarding 200 plus times. That clearly is not effective.

So, we need a policy and a leader behind it, a warrior who is again reluctant to go to war, but if he's tasked to go to war, we're going to go war to win.

BURNETT: Trump spoke glowingly of General Mattis multiple times, last night among them, very different tone from his campaign though overall. So, here is what he said last night congressman and what he said repeatedly while running for the White House. Here is Donald Trump.

(BEGIN VIDEO CLIP)

DONALD TRUMP (R), PRESIDENT-ELECT: I love the generals.

I know more about ISIS than the generals do. Believe me.

They don't much because they're not winning.

(END VIDEO CLIP)

BURNETT: I mean, this is a totally stunning change, right? Do you think the president-elect truly respects Mattis and the other generals in this country?

ZINKE: Well, he respects General Mattis enough to name him to the secretary of defense. And what I know is General Mattis knows ISIS, he knows the problem set, and he also knows Iran continues to be the number one sponsor of terrorism.

And in the Middle East, as an example, we need a policy so the military can support a known policy. But when we're rudderless in policy and don't have even an idea what do with an emerging Iran or Persia, a relationship with Russia, we have aircraft flying the same air space, deconflicting, or not deconflicting targets, that's a recipe for disaster. We have Turkey unstable up north. We have refugee, humanitarian crisis.

BURNETT: OK.

ZINKE: A lot of problems. I think General Mattis is the answer.

BURNETT: Congressman, I want to ask one question before we go here on the breaking news tonight. Donald Trump on a phone call with the president of Taiwan, something no U.S. president has done in 37 years. Democratic Senator Murrphy saying this is how wars start. Multiple members of the George W. Bush's foreign policy team saying this is a major breach and should not have happened. A major mistake.

What do you say?

ZINKE: Well, I don't believe this will lead to war. And certainly China has been aggressive in the South Pacific, building islands and fortifying them.

I would not have made that call. But the president has clearly a different agenda. I don't think it will result to war. But what I do think that China itself has been enormously aggressive too.

You had in the South China Sea's an example, they said they wouldn't arm islands. They are making islands and arming them. And to date, we've not had a policy of pushing back on the Chinese nor pushing back on Russia. And this is another example of why we need a warrior in the Department of Defense to shore up our relationships with our allies and when we make a red line, we need to make sure we hold it.

BURNETT: All right. Congressman, thank you very much. I appreciate your time as always, sir. Thank you.

ZINKE: Thank you.

BURNETT: And next, Donald Trump trying to stop recounts in several states with razor thin margins of victory. His numbers in Pennsylvania show his lead dwindling tonight.

Plus, Trump picking a billionaire fundraiser to head a major government agency. Her track record raising big questions tonight.

(COMMERCIAL BREAK)

BURNETT: Breaking news, moments ago, President-elect Donald Trump filing a suit in Michigan's court of appeals to stop Jill Stein's recount of nearly 5 million votes in the state. This is obviously when there is a very thin margin of victory here of 10,000 out of those votes count. This comes up as the state board ruled the recount could start as early as Tuesday.

Wisconsin court also blocking a bid from Trump supporters in Wisconsin to stop the recount there that's already underway.

[19:40:01] And Trump's lead is shrinking in Pennsylvania where his lawyers have filed suit as well.

Now, the latest figures here show Trump's lead is down to nearly 49,000, which is in 0.03 percent of when an automatic recount is triggered.

Sunlen Serfaty is OUTFRONT from Trump Tower.

I mean, Sunlen, these are razor thin margins and could change things. It seems the Trump campaign is taking these recounts seriously.

SUNLEN SERFATY, CNN NATIONAL CORRESPONDENT: Yes. Certainly, Erin, they don't want anything that questions the legitimacy of Donald Trump's win, even if slightly out there. So, they are making efforts to make sure that these -- to try to make sure these recounts don't go on. You know, we've already seen them, Donald Trump himself, members of his transition team really blast Jill Stein's effort in these three states.

And specifically today, the Trump team of lawyers filing a motion in a court of appeals court in Michigan basically to expedite the process. Weave that court document and basically asked for this pushed very quickly to the Michigan Supreme Court of Appeals where it is their hope that this will be killed essentially ending the recount in Michigan.

BURNETT: So, Sunlen, the Michigan attorney general siding with Trump.

SERFATY: That's right. The attorney general earlier in the day in essence did the same thing the Trump team did later in the day, filing this motion in a Court of Appeals, saying this needs to be pushed Supreme Court. The attorney general in a statement saying, quote, "Michigan voters rejected Stein's candidacy by massive margins, but her refusal to accept that state-verified result possess an expensive and risky threat to hard-working taxpayers and abuses the intent of the Michigan law."

So, that from the attorney general in the state this morning. And notably, Jill Stein firing back really at both them this morning, but specifically to the attorney general, saying that she believes this is a politically motivated attempt by the attorney general to side with Donald Trump.

BURNETT: All right. Sunlen, thank you.

I want to go straight to Jeffrey Toobin, our senior legal analyst, also the author of "Too Close to Call: The 36-Day Battle to Decide the 2000 Election".

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: Recount expert.

BURNETT: You are recount expert.

And when people hear numbers like 5 million votes cast in Michigan and a 10,000 vote margin, you know, that seems to people so close that it could go either way.

TOOBIN: And it can't.

BURNETT: You can't.

TOOBIN: You know, you refer to razor thin. It is a razor thin margin from a political perspective. But from a recount perspective, it's really not that close.

BURNETT: You never recount and change 10,000 votes.

TOOBIN: You never change 10,000 votes.

BURNETT: How many they would change?

TOOBIN: Five hundred tops.

BURNETT: Wow.

TOOBIN: That -- you know, remember, Florida, 2,000. The margin there was just over 500 votes. That is a state where a recount was really justified and a recount really could have changed the results. Here, you're talking about 10,000, 12,000, 50,000 votes, it never works.

And there you see on the screen -- the margins, I mean, all close in terms of an election result, but not for a recount.

BURNETT: So, razor thin politically. But mathematically --

TOOBIN: Absolutely. Absolutely not.

BURNETT: Jill Stein has called herself an underdog. She's gone out and raised the money to these recounts. Is she really the David to Trump's Goliath?

TOOBIN: No, she's a grifter. She is exploiting the grief of a lot of people on the left to raise money than she did even in her campaign. And it's really pretty rich that Jill Stein, who's margin, whose votes may well have cost Hillary Clinton the election is acting like Hillary's advocate here. I mean, it's really preposterous.

And where this story is even stranger is why the Trump campaign or people affiliated with the Trump campaign aren't just saying go ahead? Count all the votes you want.

BURNETT: Why are they fighting?

TOOBIN: Well, I think it is just the Trump way, which is you fight when people defy you. And I mean, the irony here is if Trump campaign succeeds in stopping any of these recounts, they are going to plant the seeds --

BURNETT: Well, it is going embolden people to say the election was stolen.

TOOBIN: Exactly. If he said, look, count all the vote, go ahead. If he said I'm completely confident, he's going to wind up the winner anyway. And then there would be no argument that, you know, there were some secret, ultimate result. But the Trump brand is aggression and aggression it will be in the court.

BURNETT: Jeffrey Toobin, thank you very much. Interesting as he says. Razor thin politically. Not so mathematically. Not going change with a recount.

Next, stock-setting records, record after record. Something Trump is touting and proud of. Will the bull market last?

Plus, new questions about one of Trump's top cabinet picks.

(COMMERCIAL BREAK)

[19:48:42] BURNETT: Tonight, the White House celebrating a nine year low for the country's unemployment rate, which, of course, is something that will benefit Donald Trump. It went down to 4.6 percent, the lowest since 2007 which, of course, was at the peak. Jobs added in November, 178,000.

Now, as far as what this means for markets, there has been a Trump effect. There's no question about that. Fourth straight week of gains after a series of record highs.

OUTFRONT now, the Bespoke cofounder Paul Hickey.

I mean, Paul, this is pretty incredible. Donald Trump is proud of this. You know, everyone said -- you know, Mark Cuban came on the show and said stocks are going to fall 20 percent.

PAUL HICKEY, CO-FOUNDER, BESPOKE INVESTMENT GROUP: Right.

BURNETT: And others came out and said, Larry Summers, you're going to have a recession if Trump takes over now.

HICKEY: Right.

BURNETT: Now, you know, we'll see what happens in the future. But so far, that's been dead wrong.

HICKEY: No, I mean, the market reaction has been great to Trump's election. It is second -- third best reaction to an election by a newly elected president, behind only Reagan and Nixon. So, I mean, this really a big deal here.

And I think what, you know, the long term effects, I think the quickness with which the market rebounded, you saw that overnight selloff, but then quickly the market went up.

BURNETT: In the middle of the night, people were -- when the shocking results came in market sold off around the world.

HICKEY: It was so short-term.

BURNETT: Right. It was so short term and it wasn't done in the United States. It was done by traders overseas, right?

[19:50:01] And once U.S. traders started, it went up.

HICKEY: Yes, people came in and started buying and I think there's a flood of retail money. Discount brokerage saw in money coming in.

And I think there is just, you know, you tend to measure the market on fundamentals or technicals, which is the chart patterns. But the often overlooked aspect is sentiment. And the sentiment here, it's hard to measure, but sentiment is what's clearly been driving this market and it is relief that regulation is going to be rolled back. There is going to be tax relief and infrastructure spending in the market.

So, there is a lot of optimism here. You know, again, no -- nothing -- this is like sort of the honeymoon phase. I think the long-term picture for the market, under full Republican control is historically been a positive.

But, you know, there's always going to be bumps on the road. Nothing goes up forever.

BURNETT: And when you say behind Reagan and Nixon, one other thing you point out is they have honeymoon and then sort of from now, from early December until inauguration day, the markets went down.

HICKEY: Yes.

BURNETT: Do you have that fear for Trump?

HICKEY: Well, I think what you would see is we have come so far so fast, what are called extremely overbought levels in the market as of last week. So, you could see a little bit of a pullback here.

But again, the long-term implications for the market I think are going to be positive. How much of what this optimism comes through and actually gets legislated is another question. But, overall, I mean, the S&P is up about 4 percent. I mean, that's not a huge move in a grand scheme.

BURNETT: When you use the world retail money what that means is regular people, regular people putting I small amounts of money. If you talk about this election as elites thinking one thing and regular Americans thinking another, it is regular Americans --

HICKEY: Right. And we've a bull market for seven years right now. But individual investors mostly sat out most of this run and they've been sitting on the side lines, and the day after the election comes in you saw a flood of money coming in. You know, the forgotten man ideal Trump appealed to was the forgotten investor. Individual investors were not in the market.

BURNETT: Earlier this week, I spoke to Wilbur Ross, who Trump has nominated for commerce secretary. He said, calling out everyone for saying there'd be a recession, saying they are dead wrong. He said, "I see record breaking prices. Pretty soon, in the next year, you are going to see a real impact in the economy."

What he's basically saying is, this run up in stocks is going to effect the economy. It's going to affect jobs. It's going to affect, not just good jobs numbers today, but jobs that pay, quality jobs.

HICKEY: Yes.

BURNETT: Is he right?

HICKEY: I think so. First of all, let's not forget what we've seen in the last seven years. It's been a great market but we're seeing what can be real movement in Washington. The people Trump is appointing are pragmatists and willing to get things done, I think. They're going to reach across the aisle, whereas in Washington right now, on both side, we haven't seen much, you know, interest in coming together.

So, I think we'll get things done and that's going to, you know, grease the skids -- grease the gears of the economy and that's going to be ultimately a positive for equity prices.

BURNETT: All right. Thank you very much.

HICKEY: Thanks. Thanks for having me.

BURNETT: Paul Hickey. And OUTFRONT next, new questions tonight about a controversial Trump

cabinet pick. We're going to break down her record, as a billionaire power broker.

(COMMERCIAL BREAK)

[19:56:10] BURNETT: Tonight, new questions about the record of one of Donald Trump's top cabinet picks. The president-elect tapping billionaire Betsy DeVos for education secretary. Could it mean, as some say, the end of education in America?

Sara Ganim is OUTFRONT.

(BEGIN VIDEOTAPE)

SARA GANIM, CNN CORRESPONDENT (voice-over): (AUDIO GAP) altogether.

TRUMP: I may cut Department of Education.

GANIM: And if he does, Betsy DeVos would be the right person to help make that happen, according to the head of her nonprofit education advocacy group.

GARY NAEYAERT, EXECUTIVE DIRECTOR, GREAT LAKES EDUCATION PROJECT: She's not in this because she's looking for a condo for eight years in Washington. Mrs. DeVos and the president elect both agree that we should be reducing the footprint of the federal government.

GANIM: Betsy DeVos is a controversial figure here in Michigan. An advocate of school choice, she's often called an architect of Michigan's school system. And she has many critics.

TONYA ALLEN, PRESIDENT & CEO, THE SKILLMAN FOUNDATION: When I hear her name I think about choice without quality.

GANIM: DeVos' husband is the air to the Amway fortune. Her family has donated millions to political causes, and even started its own lobbying group, mostly to promote her educational ideas. More school choice, less regulation and unlimited number of for-profit charter schools.

ALLEN: I would be really concerned if Michigan was the role map for the country. I actually think we should be looking at Michigan and saying this is what we should not do.

GANIM: Nearly half of charter schools here are ranked in the bottom quarter of schools statewide, according to the Education Trust Midwest. Twenty percent were given a D or F grade.

And there is no rule about where charter schools should be placed. So, kids like 11-year-old Judis Shelton often end up going to schools far from home.

ARLYSSA HEARD, CHARTER SCHOOL PARENT: It is somebody else's neighborhood that I'm traveling to while passing three or four other schools and six ore seven closed schools to get to his school in the neighborhood that I don't live in.

GANIM (on camera): So, in your opinion, has choice worked in Michigan?

HEARD: Choice has not worked. It is a joke, especially here in Detroit. What we don't have is quality choice in our neighborhoods.

GANIM (voice-over): Even the popular schools founded by the DeVos family and touted as a proud example of their contribution to education ranked in the bottom third for performance in the state, according to the state Department of Education. But DeVos supporters say many places in Michigan have long struggled with education and the charter schools have helped.

NAEYAERT: I think there's been an actual drummed up multi-year effort by the critics in charters and choice, mainly the Democratic Party and teachers unions, to discredit charters.

GANIM: He says decades of Betsy DeVos advocating for students will help her make changes at the national level.

NAEYAERT: We're going to be doing things differently than we've done in the past and I would say to people, hold on to your seats.

(END VIDEOTAPE)

GANIM: Erin, we tried to talk to Betsy DeVos ourselves. We were not successful.

But I did talk to Republicans here who support her, who say she cares a lot about kids and I talked to Democrats who said they are for charters in Michigan. But people on both sides of the political aisle say the current system here, this free market for schools, it's not working for children -- Erin.

BURNETT: All right. Sara, thank you very much. And thanks to all of you for joining us. Have a good weekend. Don't forget, you can watch OUTFRONT any time anywhere on CNN Go. We appreciate your team.

"AC360" begins right now.