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Gutting Ethics Reform; Team Trump Lowering Expectations;Trump Taunts North Korea;Manhunt For Istanbul Gunman Intensifies. Aired 5:30-6a ET

Aired January 3, 2017 - 05:30   ET

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


[05:30:00] JOHN BERMAN, CNN ANCHOR: President-elect Donald Trump promised to drain the swamp. Last night, behind closed doors, Republicans voted to end the independence of the independent Office of Congressional Ethics.

Some specifics here, they would bar the ethics office from reviewing alleged criminal violations by House members that require the office to refer complaints to either law enforcement or to the House Ethics Committee. The measure would allow the House Committee to stop any ethics office investigation and it would bar the committee from making any public statements.

In English, that really just means that it would give Congress the right to stop investigations of itself and they would stop investigating anonymous tips, and they're going to do away with any press secretary or public communications from this ethics office so they control the message from it completely. It just takes away its independence completely.

CHRISTINE ROMANS, CNN ANCHOR: And zero public debate about this, by the way.

BERMAN: No.

ROMANS: Zero public debate. Virginia Republican Bob Goodlatte said in a statement that his proposal strengthens the mission of the Ethics Office and it improves due process rights for House members who are under investigation. House Democratic leader Nancy Pelosi blasted the change. She says it would destroy the Ethics Office. She tweeted, "So much for draining the swamp." The full House votes on the measure today. Speaker Paul Ryan and other Republican leaders oppose the change.

BERMAN: This morning, key advisers to President-elect Trump say he might not really make public the secret information he claimed to have that casts doubts on the intelligence community's allegations that Russia hacked into the U.S. political season. The president-elect has said he was meeting with intelligence leaders this week. Now we learn that that will not happen today. This was senior adviser Kellyanne Conway on "AC360".

(BEGIN VIDEO CLIP)

ANDERSON COOPER, CNN ANCHOR, "AC360": I want to be clear about the information about the hacks that Trump says he knows. He says, "You'll find out on Tuesday or Wednesday". Will he actually announce what the information is Tuesday or Wednesday, as he said he would, after being briefed?

KELLYANNE CONWAY, SENIOR TRUMP ADVISER: Well, he didn't -- he didn't say that he -- he didn't necessarily say he'd announce it. What he's saying is that he'll -- we'll find out -- he'll find out. I think it's all very contingent on what these intelligence officials reveal in their briefing, Anderson.

COOPER: OK.

CONWAY: And everybody should be very happy that the president-elect is open to receiving that briefing.

(END VIDEO CLIP)

ROMANS: So Conway edging back from a big reveal. It comes as the new White House press secretary -- the incoming White House press secretary Sean Spicer is suggesting Mr. Trump will not be offering new information but, rather, analysis of existing intel.

(BEGIN VIDEO CLIP)

SEAN SPICER, INCOMING WHITE HOUSE PRESS SECRETARY: As president- elect, he is privy to information that most people aren't and he is able to understand what the intelligence is and draw conclusions from that. He's going to talk about his conclusions and where he thinks things stand, so he's not going to reveal anything that was privileged or shared with him classified.

(END VIDEO CLIP)

ROMANS: OK. So all of this as U.S. intelligence officials tell CNN they have identified what they are calling digital fingerprints and computer code that add to the evidence Moscow was, indeed, behind these intrusions. This and other new information prompting one Trump senior adviser to break away from his team, saying that Russia is likely behind the hack.

Joining us now with the very latest live from Moscow, our senior international correspondent Fred Pleitgen. Good morning, Fred. Walk us through all of these developments from the past 24 hours on this hacking front.

FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, sure. Good morning, Christine. It's, of course, those digital fingerprints that are of a lot of interest not just to U.S. authorities but to many people here in Russia and, of course, in the U.S. as well.

And essentially what that source was telling CNN is that it was saying that what they were able to do is they were able to trace all of this back to a keyboard -- one specific keyboard using the Cyrillic alphabet which is, of course, the alphabet used in the Russian language and, therefore, the conclusions are that in some way, shape or form the Russian government was at least in and probably involved in all of this.

Now, it's interesting because a second source also told CNN that the information -- the quality of intelligence that they're getting on Russia a lot better than the quality of intelligence they get on other places like, for instance, China -- for instance, North Korea and, therefore, they believe that the -- that the evidence -- the intelligence they're getting leads them to say that Russia was involved.

Now, of course, you've noted the president-elect is still casting doubts on all of this but one of the members of his transition team, former CIA Director James Woolsey, is now saying that he believes the Russians were involved, even though it's unclear at what level and whether or not they were the only ones. Let's have a listen.

(BEGIN VIDEO CLIP)

JAMES WOOLSEY, FORMER CIA DIRECTOR: It looks from all the indicators that we've read about from the NSA and CIA and so forth, is if the Russians were there and perhaps even principally there, it doesn't mean that there isn't somebody else in there. Donald Trump is an expert at this kind of weaving around and attracting everybody's attention. It's exactly what he did during the campaign.

JIM SCUITTO, CNN CHIEF NATIONAL SECURITY CORRESONPONDENT: So you're saying he's playing us, in effect?

WOOLSEY: I -- there's a possibility that he is a little bit, yes.

TAPPER: But is that something the president-elect should be doing on a serious issue of national security?

WOOLSEY: Well, why not? I mean, he's not interfering with anything. He's not talking about anything classified.

(END VIDEO CLIP)

PLEITGEN: Former CIA Director James Woolsey there speaking to our own Jim Scuitto yesterday. Now, of course, the Russians, for their part, are continuing to deny any sort of involvement. They're calling the claims -- or continue to call the claims baseless. And, of course, all of this playing out huge in Russian media as well, especially that Sean Spicer interview. That's getting a lot of airplay here in Russia, I can tell you that.

[05:35:13] ROMANS: That, it is. All right. Fred Pleitgen in Moscow for us. Thank you, Fred.

Congress returns to work this morning. In fact, Republicans take the reins in Congress and on the top of the to-do list dismantle -- get rid of -- abolish Obamacare. But the big question is does the GOP have a legitimate plan to replace it? Republicans do not control enough seats in the Senate to repeal and replace right away so, instead, they'll likely try to gut some provisions, change others using the budget process. So, "CNN MONEY" has done this really nice, deep analysis showing some of the changes that might be coming. First, tax credits instead of subsidies. That could help more middle-class families who don't qualify for help under Obamacare, but it would hurt some lower-income families.

Second, high-risk pools for the sick. This would cover some people with preexisting conditions who have insurance and would send money to states for new enrollees. States would also get federal block grants from Medicaid. That limits how much money the federal government spends on insurance for the poor and some worry limits coverage for the poor.

And finally, bolstered health savings accounts. This is a favorite policy tool of Republicans. HSA's are common with high deductible plans. There's so -- you know, for seven, eight years now Obamacare has been slowly working through the healthcare system. There's a lot of discussion about the parts of Obamacare that simply are part of the healthcare, you know, architecture right now. How hard it would be to pull some of that back.

BERMAN: You know, we should talk about this.

ROMANS: I think we should, actually.

BERMAN: Let's talk about this. Joining us now, Ellis Henican, best- selling author, political columnist. Thanks so much for being with us right now.

ELLIS HENICAN, POLITICAL COLUMNIST: It's good to see you guys, sure.

BERMAN: Look, repeal or replace has been the mantra of Republicans for a long time. Donald Trump promised to do it if he's elected president. Republicans, they already have control of Congress but the new Congress is sworn in today. Donald Trump is sworn in in 17 days. They're going to change Obamacare, period, full stop, they will. You know it's going to happen. The question is how much and how soon?

HENICAN: Right, and how much of it is a branding question, right? I mean, as Christine was pointing out, a lot of the elements of Obamacare are so ingrained in our system that it's almost impossible to get rid of it. They're not really going to get rid of the preexisting condition rules, right? They're not really going to bump all those kids in their twenties off of their parent's health insurance.

BERMAN: But you have to pay for them. You have to explain and show how you will pay.

HENICAN: Right, but what you don't have to do is call it Obamacare and so maybe what we'll see in the end is a lot of the stuff that people like. Get rid of some of the things that people don't, but a lot of the things we like, they're just giving it a different name. Honest to God --

ROMANS: I mean, could they fix the things that are wrong with Obamacare and say they got rid of Obamacare, but they really didn't?

HENICAN: There's one problem in that. It's the mandate.

BERMAN: The individual mandate.

HENICAN: The individual mandate is really what finances those other things. Telling Americans you have to have health insurance because that would bring in some of those healthier people who are supporting the people who are less, I think. Very difficult to come up with a financial equation that does the stuff you like without having everybody be --

BERMAN: By the way, it's complicated because of the congressional rules here to overturn the individual mandate. That would probably take, you know, 60 votes in the Senate --

HENICAN: Exactly.

BERMAN: -- which the Republicans don't have. However, you could theoretically, with a majority, do away with the tax penalties for not signing up. So you can still have an individual mandate without an enforcing mechanism. That might be tested.

HENICAN: And the penalties are not that high, honestly. I mean, people who don't want it -- I think a lot of them are swallowing the penalties, aren't they?

ROMANS: OK, so that's healthcare policy. Let's talk about nuclear policy and foreign policy via tweets. Donald Trump tweeting about North Korea. I want to read the tweet that he said. He said, "North Korea just stated that is in the finals stages of developing a nuclear weapon capable of reaching parts of the U.S. It won't happen." Then he goes on to sort of slam China in the next tweet, saying that China, basically, "has taken all of our money but it's not helping with North Korea. Nice."

Is this appropriate for a president-elect -- he's not even the president yet -- to be talking directly to the North Korean leader, essentially, and slamming China in 140-character tweets?

HENICAN: Well, the president-elect part of it gives me the willies a little bit. I mean, I'm in the school that says you have one at a time when it comes to presidents. But, I mean, he's going to be the president soon so that part of the issue is going to fade very quickly. It's an odd way to deal with highly complex policies but you know what, it's Trump. I mean, I don't think it's going to change. I think we can point out some of the limitations but I think we're going to keep getting it.

BERMAN: He says it will not happen, which you point out, Ellis, is another way of drawing a red line --

HENICAN: It is.

BERMAN: -- which could be problematic if in two weeks North Korea tests an intercontinental missile. HENICAN: What do you do? And do -- and do you have a plan? I don't know.

BERMAN: Let me ask you, Ellis, about what happened in Congress overnight. The Republicans in Congress, last night, voted to take the independence away from the independent congressional ethics office. This was created in 2008 after a whole bunch of congressional scandals and over the last eight years it has investigated many members but some don't like it and now, essentially, gone.

[05:40:06] HENICAN: Right. I've never met a politician who enjoys being the subject of an ethics investigation.

BERMAN: But that's the point.

HENICAN: Right. I mean, it's not something most people like. You know, you ticked off a moment ago, John, some of the actual provisions in this -- in the exchange. One struck me as interesting. It was refusing to accept anonymous complaints. You've been around law enforcement long enough to understand that you've got to have anonymous complaints --

BERMAN: Right.

HENICAN: -- and particularly, when the enforcement agency is beholden to the very politicians you're investigating. So not only will they know who's making the complaint, but the investigators will have no independence to investigate it. I mean, that's not much of an investigative operation.

ROMANS: Wow.

BERMAN: It's swampy.

HENICAN: It is swampy, yes.

BERMAN: It's a little swampy.

HENICAN: It's a little swampy.

ROMANS: Ellis Henican, nice to see you.

HENICAN: Have a great day, guys.

ROMANS: Happy New Year.

HENICAN: I love seeing you all together, by the way.

ROMANS: Happy New Year. I know, we love having you here.

HENICAN: All is right in the world when you all --

ROMANS: It's a mutual admiration society. Come back often.

HENICAN: Thank you.

ROMANS: Thanks, Ellis.

BERMAN: All right. Thousands of international travelers, they were delayed for hours at airports across the country on one of the busiest travel days of the year. The problem, a computer outage that lasted for four hours and that created a long line -- a bunch of long lines of inbound international travelers. Customs and border patrol officers, they were forced to process passengers through so-called alternative procedures.

ROMANS: The old way.

BERMAN: U.S. officials tell CNN that at this time there is no indication that the service disruption was malicious in nature.

ROMANS: It raises questions about how easy it is to snag international travel like that and the repercussions.

BERMAN: Computers do malfunction.

ROMANS: They do. So do people, sometimes.

BERMAN: Yes.

ROMANS: Never on this program.

BERMAN: Never.

ROMANS: Forty-one minutes past the hour. The manhunt intensifies in Turkey for the gunman who opened fire at a nightclub on New Year's Eve. We are live in Istanbul.

(COMMERCIAL BREAK)

[05:45:25] ROMANS: Welcome back. In Turkey, the manhunt is intensifying for the Istanbul nightclub attacker. Officials have not publically identified this suspect but they have released this. (Video playing) This is a selfie video of a man wanted in connection with the New Year's massacre. They've released this to Turkish media. Thirty-nine people died, most of them foreigners. ISIS has now claimed responsibility. Police have detained eight people in connection with the attack and fingerprints found on the scene could help identify the shooter.

CNN's Ian Lee is following developments. He is live in Istanbul. Ian, what can you tell us about that selfie video, first of all? They released it saying this is the man they're looking for?

IAN LEE, CNN CORRESPONDENT: Yes, that's what it appears to be, the man. But it is quite chilling just to think about him walking around the streets right before he's going to commit that attack. And then the next time we see him in video is the night of that attack where he so methodically and chillingly moves into that nightclub, shooting people on site, and then he just slips away.

But that manhunt for him right now is really nationwide. Hundreds of police officers are looking for him but the real risk here is if he is an ISIS operative that he might try to slip back into Syria where ISIS has territory and thus, out of the grasp of Turkish authorities.

They do have those eight people detained. They're interrogating them. They're also looking for any other connections that he might have and with ISIS operating here in Turkey, this isn't the first attack that they've carried out. They do have cells here and so authorities are going to be looking to see if they can disrupt those cells, find those cells, and prevent an attack like this happening.

But, on New Year's Eve there was already a heavy security presence in Istanbul, yet this man was able to slip in and shoot the club and then run away, which is creating a lot of questions right now about security in Turkey. Can authorities really secure this country?

ROMAN: Well, they have a fingerprint, they have that selfie video. We'll look for developments, hopefully, soon on the manhunt. Ian Lee in Istanbul. Thank you so much.

BERMAN: All right. Let's take a look at what's coming on "NEW DAY". Chris Cuomo joins us now. Good morning, Chris.

ROMANS: Happy New Year.

CHRIS CUOMO, CNN ANCHOR, "NEW DAY": Happy New Year to you both. How's the new health regimen going, John?

BERMAN: Very healthy, extremely healthy.

CUOMO: You look even more buff than usual.

BERMAN: I had a lot of work done.

CUOMO: So, a big day -- big day. The 115th Congress is going to be sworn in today but there's controversy already. What do you think of this? We're going to take you through the details of what's going on with the office of the committee for ethics. Now, what has just happened? There was a move -- this is not really new, you know. You have to cover these things straight.

The idea of a separate ethics panel that doesn't have just sitting congressmen on it, that may be able to pursue very aggressively against members in Congress has always been a little controversial, but right now it's being gutted by a new set of amendments. We're going to talk to representatives on both sides of the aisle about the consequences for this vote. How does it line up with the president- elect and the GOP mandate to drain the swamp?

Plus, GOP leaders have promised to repeal Obamacare and replace it. The first part is easy. It's pretty much a stroke of a pen. The second part is very hard. Do they have a plan? What do they think will be done with the millions of Americans that are on the plan right now? We're going to help -- we're going to talk to one of the men who helped shape the Affordable Care Act, Zeke Emanuel. He is honest about the things that need to be improved. What does he see? Is there any chance of a middle ground here? That's what we got.

ROMANS: All right, Chris Cuomo. Happy New Year. CUOMO: Happy New Year.

ROMANS: Talk to you soon. It is also the first trading day of 2017, so do you know where your money is? We're going to show you some bullish and not so bullish predictions for stocks in 2017 when we get a check on CNN Money Stream, next.

(COMMERCIAL BREAK)

[05:52:25] BERMAN: All right. If you love watching college football then we know what you were doing yesterday. Four bowl games on T.V. and, of course, the Rose Bowl which was pretty amazing.

ROMANS: Hines Ward has more in this morning's Bleacher Report. Good morning.

HINES WARD, CNN SPORTS CONTRIBUTOR: Good morning, guys. Yes, I told you, the Rose Bowl game yesterday lived up to all the hype between USC and Penn State. The 103rd edition of the Rose Bowl went back and forth. USC down seven with a minute and one-half to go. Sam Darnold finds Deontay Burnett for his third touchdown catch of the day to tie the game up.

Now, Penn State tried a late game drive but Leon McQuay with an interception on the ill-advised pass by the Penn State quarterback that sets up USC kicker Matt Boermeester who had already missed two field goals but this one was good. Trojans win 52-49 in the highest- scoring game in Rose Bowl history.

Now yesterday, Broncos head coach Gary Kubiak is picking his health and family over football. Last year's Super Bowl winning coach announcing his decision at a press conference to step away from coaching, and he really got emotional when thanking his wife.

(BEGIN VIDEO CLIP)

GARY KUBIAK, SUPER BOWL 50 WINNING COACH: Oh,I thank my buddy. She kept me in one piece for a long time and she let me go do what I loved to do. I'm coming home. That probably scares the hell out of you. I'm coming home, butI love you.

(END VIDEO CLIP)

WARD: And to college basketball. Duke announcing yesterday that Coach K. will be having back surgery on Friday. The 69-year-old coach will have the surgery and then he will step away from the team to heal. The recovery time is expected to be around four weeks. Assistant coach Jeff Capel will take over while Coach K. is out.

And finally, to the NBA. Milwaukee hosting Oklahoma City. Russell Westbrook with a cardinal sin in the state of Wisconsin. After making the three-pointer he mocks Packers quarterback Aaron Rodgers with the discount double check move. Lots of Packers fans on hand to watch. They let him know how they felt about it with lots of boos, but the Bucks would get the last laugh, though. They would go on to win 98- 94. So back to you guys. BERMAN: You've got to be careful. You've got to be careful where you do your celebrations and exactly how you celebrate, Christine Romans. Hines Ward, thanks so much.

WARD: No problem.

BERMAN: All right. A violent storm system is sweeping across the southern U.S. It's blamed for at least five deaths right now. Emergency officials say four people were killed in southern Alabama when a tree fell and collapsed a mobile home. That happened during a tornado. A fifth weather-related death was reported in Florida. In Mississippi, trees ripped from the ground and homes were damaged in more than a dozen counties that may have been hit by tornadoes. Remarkably, no injuries have been reported there.

[05:55:20] ROMANS: All right. A South Carolina judge clearing the way for convicted church shooter Dylann Roof to represent himself when the sentencing phase of his federal hate crimes trial begins tomorrow. After a day-long hearing Monday, the judge ruled Roof is mentally competent to act as his own lawyer. The judge also issuing an order that prevents Roof from approaching the jury or any witnesses during the proceeding. Roof plans to make an opening statement. He is refusing to present any kind of psychological defense at his sentencing. Prosecutors seeking the death penalty.

BERMAN: The daughter of Carrie Fisher and the granddaughter of Debbie Reynolds is speaking publically for the first time since losing both last week. Actress Billie Lourd posted a picture on Instagram of herself with Fisher and Reynolds, who died just one day apart. Lourd also posted a message that said, in part, "Receiving all of your prayers and kind words over the past week has given me strength during a time I thought strength could not exist. Your love and support means the world to me."

ROMANS: Oh, wow. We wish her the best. All right, let's get a check on CNN Money Stream. Stocks set to ring in 2017 with big gains at the open. Rally mode, folks. Dow futures jumping 125 points right now. That's about six-tenths of a percent. S&P futures, they're up, too. The optimism really coming from global stock markets. They started the year strongly. Rising commodity prices. Shares in Europe started the day off with strong gains and stock markets in Asia rose overnight as well.

OK, back here in the U.S. Lots of economic data for investors to consider this week including a big jobs report on Friday. That will be the final jobs report for last year, which was one of the best years for job gains in a very long time.

All right, so it's looking like a solid start to the year for stocks, but what about the finish? Predicting how the stock market will perform is nearly impossible. But you know what, every year some big banks do it anyway and then I tell you what they say. Royal Bank of Canada is bullish. It's predicting an 11.6 percent jump in the S&P 500 by the end of 2017. Deutsche Bank sees a -- about a five percent rise. Citigroup forecasts a 3.8 percent increase. Bank of American and Goldman Sachs, they predict gains of about 2.7 percent by year's end.

OK, a lot of are talking this morning about a new law going into effect in France. It will give workers the right to ignore emails when they're not on the clock. Imagine! The French Ministry of Labor says the law is to promote a better work-life balance by respecting rest periods. Here's how it works. Companies with 50 or more employees have to negotiate new out-of-office email guidelines with their staff. Firms must ensure employees get a break from answering their bosses' email. If management and staff cannot agree on new terms the firm must publish rules on when employees can switch off.

Now, the French unions have long used for this so-called disconnect rule. They say digital technologies have created an "explosion of undeclared labor". Can you imagine?

BERMAN: Bonjour.

ROMANS: I like it when my boss emails me at 11:00 at night.

BERMAN: That never happens, by the way.

ROMANS: Thanks for joining us.

BERMAN: And no, it never happens at all. Look, why limit it to after hours? Why not ban the emails when you're at work also because that's creating a lot of stress?

ROMANS: I'm just going to ban email because I don't want to be hacked.

BERMAN: I don't believe we should email at all.

ROMANS: Thanks for joining us. I'm Christine Romans.

BERMAN: All right, I'm John Berman. An independent ethics panel overseeing Congress, not independent anymore. Big change overnight. "NEW DAY" starts right now.

(BEGIN VIDEO CLIP)

BERMAN: Congress set to effectively neuter the independent ethics office.

DONALD TRUMP (R), PRESIDENT-ELECT: Drain the swamp. (INAUDIBLE).

CONWAY: This man is allowed to have a celebration with his business partners.

ROMANS: Trump is using Twitter to challenge North Korea.

UNIDENTIFIED MALE: You can't allow North Korea to get their hands on nuclear weapons.

TRUMP: Hacking is a very hard thing to prove.

UNIDENTIFIED MALE: Case closed in the KGB code (ph). CONWAY: Donald Trump ought to know many things that the rest of us do not know.

UNIDENTIFIED FEMALE: Lines were completely chaotic.

BERMAN: Thousands of international travelers delayed for hours.

UNIDENTIFIED MALE: Everybody was yelling, people fainting here and there.

(END VIDEO CLIP)

ANNOUNCER: This is NEW DAY with Chris Cuomo and Alisyn Camerota.

CUOMO: We want to welcome our viewers in the United States and around the world. This is NEW DAY. It is Tuesday, January 3rd, 6:00 here in New York. Up first, House Republicans secretly voting to gut the independent congressional ethics watchdog just hours before the new Republican-controlled Congress gets sworn in today.

ALISYN CAMEROTA, CNN ANCHOR: This, after President-elect Trump has repeatedly promised to "drain the swamp". And, of course, there are still many questions about Mr. Trump's potential conflicts of interest. Donald Trump takes the oath of office in 17 days. So let's begin our coverage with CNN'S Phil Mattingly. He is live on Capitol Hill. Give us the latest, Phil.

PHIL MATTINGLY, CNN CORRESPONDENT: Well, good morning, Alisyn. This is the moment Republicans have been waiting years for. The most powerful, ambitious majorities will be sworn in in just a couple of hours.