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THE LEAD WITH JAKE TAPPER

Will Congress Embrace Trump Agenda?; President Trump Set to Address Country; GOP Pushes Back on Trump Over Obamacare, Budget. Aired 4-4:30p ET

Aired February 28, 2017 - 16:00   ET

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


JAKE TAPPER, CNN ANCHOR: Hello, everyone. Welcome to THE LEAD. I'm Jake Tapper.

We're starting with this breaking news in our money lead. We're watching Wall Street closely right now, very, very closely, the Dow so close to making history today, with a 13th straight record-breaking day.

[16:00:02]

I don't even know how it ended.

But let's go to CNN money correspondent Cristina Alesci in New York.

Cristina, what happened?

CRISTINA ALESCI, CNN CORRESPONDENT: It looks like we're going to finish the day down.

TAPPER: Oh.

ALESCI: But, Jake, this is still -- but it's still an incredible streak for the markets.

Look, activity for most of the day today looked like the classic case of buy the rumor, sell the news. That's when traders are bullish about a big announcement, in this case the speech from the president tonight about boosting jobs and cutting taxes.

And then they sell as the day of the announcement nears. Look, this market has been hitting record after record for several reasons, low interest rates, yes, but chiefly because Trump is dangling some red meat in front of investors.

He's out talking about 4 percent economic growth. We're at 2 now, so we're talking about double economic growth. Cutting corporate taxes, also something that hasn't really been tackled too much, talked about too much.

Everyday investors are actually buying into this market. J.P. Morgan says today, today came out with a report that says mom and pop investors are comfortable about jumping into stocks. Now, ironically, that might not be a good thing, because some in the industry, the professionals see that as a sign of a mature bull market, AKA, time to get out, Jake.

TAPPER: What happened, Cristina? What would it take to sustain a rally, do you think?

ALESCI: Well, look, the Dow is up 13.5 percent, 2,500 points since Election Day. Look, the only real movement that we're going to get from here is on policy.

That's what's going to justify another move. The stakes are pretty high for Trump tonight. Wall Street will be listening for details on the tax plan. When is it coming, how big will it be? Remember that Treasury Secretary Steven Mnuchin promised significant tax reform by August.

They will be looking for any hints on whether Trump will shoot down the Republicans' plan for a border adjustment tax. That's another big issue for them, Jake. So, we're going to be watching very closely tonight to see and hear more details, more specifics.

TAPPER: Also keep an eye out for a big infrastructure investment as well. Cristina Alesci, thank you so much.

We have some breaking news in the politics lead now. A senior official told reporters at the White House today, including me, that President Trump would like to see a compromise immigration bill, one where both sides compromise, that allows those nonviolent undocumented immigrants to have some sort of path to legal status, as long as they work and pay taxes.

There would not be a path to citizenship in the president's vision, except possibly for the dreamers, those brought into the U.S. illegally when they were children.

Now, the senior administration official added that it's unclear if President Trump will discuss this, this evening when he has the nation's full attention, addressing the joint session of the United States Congress for the very first time. We are expected to hear the president lay out plans for what they're calling a renewal of the American spirit and what that might cost, along with something special, TBD, to replace Obamacare.

CNN senior White House correspondent Jim Acosta joins me now.

Jim, how much do you think President Trump sees this evening as an opportunity for a reset of sorts?

JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT: I think they do see it that way, Jake. And as for immigration, we should point out in just the last several minutes, a senior White House official told reporters here that the president remains focused on border security and deporting criminals who are undocumented.

So, perhaps some tempering of expectations on the compromise bill. But no question President Trump will be delivering his most important speech since his inauguration when he addresses joint session of Congress later on tonight. White House officials maintain it will be an optimistic speech, but

Democrats aren't buying it, warning that the president and his allies up on Capitol Hill are about to bring radical change to the country.

(BEGIN VIDEOTAPE)

ACOSTA (voice-over): With polls showing a majority of Americans disappointed with his first month in office, President Trump will try to hit the reset button in a speech to a joint session of Congress.

In a rare moment of humility, the president is acknowledging he hasn't been perfect.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I think in terms of effort, which means something, but I give myself an A-plus, OK, effort. But that's, you know, results are more important. In terms of messaging, I would give myself a C or C-plus.

ACOSTA: The president will attempt to get that messaging right tonight, laying out his plans to repeal and replace Obamacare, crack down on illegal immigration, tackle the budget, grow the economy, and beef up national security.

But the president is learning quickly health care may be the most daunting task.

TRUMP: All I can do is speak from the heart and say what I want to do. We have a really terrific, I believe, health care plan coming out.

ACOSTA: CNN has learned House Speaker Paul Ryan has received assurances the president is expected to embrace much of the House GOP plan for Obamacare, with one source saying the White House is now working hand in glove with Republicans.

UNIDENTIFIED PROTESTERS: Do your job, do your job!

ACOSTA: The speaker hopes a replacement proposal will calm tensions flaring up at congressional town halls.

REP. PAUL RYAN (R-WI), SPEAKER OF THE HOUSE: Look, I think you're going to have a lot of churning on any kind of legislative product like this. This is a plan that we're all working on together.

ACOSTA: On immigration, a senior administration official is signaling an important shift, saying the president is interested in a compromise bill that could give the undocumented a path to legal status.

[16:05:07]

But the White House is floating the proposal just as the president is expected to point at guests sitting with first lady Melania Trump, including Jamiel Shaw, whose son was killed by an undocumented immigrant.

Democrats are countering that with their own guests who are impacted by the president's travel ban on majority Muslim countries.

SEN. CHUCK SCHUMER (D-NY), MINORITY LEADER: He talks like a populist, but governs like a pro-corporate, pro-elite, hard-right ideologue.

ACOSTA: The president is already facing deep skepticism over his initial budget plan that ramps up defense spending while slashing domestic programs, a plan budget experts say will blow a hole in the budget. The improving economy, the president said, will make up any shortfall.

TRUMP: I think the money is going to come up from a revved-up economy.

You look at the kind of numbers we're doing, we were probably GDP of a little more than 1 percent. And if I can get that up to 3 or maybe more, we have a whole different ball game.

ACOSTA: But there are looming questions hanging over the president's speech, such as the multiple investigations into his campaign's contacts with Russia during the election. In an interview with FOX News, the president blamed his predecessor without offering any evidence.

TRUMP: I think that President Obama is behind it, because his people are certainly behind it. And some of the leaks possibly come from that group, you know, some of the leaks, which are really very serious leaks, because they're very bad in terms of national security.

But I also understand that's politics. And in terms of him being behind things, that's politics. And it will probably continue.

(END VIDEOTAPE)

ACOSTA: Now, back to budget matters. The president has insisted ever since he was a candidate that he will never touch Social Security and Medicare, but House Speaker Paul Ryan told reporters today up on Capitol Hill that long-term entitlement reform is -- quote -- "an open question," a sign the president and his party are once again not on the same page on a critical issue.

Jake, we should point out on a separate front, we are told the president does intend to address these recent threats to Jewish sites across the country in his speech later on tonight. So we should expect to hear the president touch on that issue as well, Jake.

TAPPER: We will have more on that subject later in the show. Jim Acosta, thank you so much.

CNN has also learned that the White House asked the Pentagon for information about the special operations raid in Yemen that could be made public in the president's speech this evening.

Navy SEAL Ryan Owens was of course killed in that mission, and this comes after Owens' father over the weekend blasted the Trump administration, saying the White House should conduct a full investigation into the raid and whether it was necessary and sufficiently planned, and the White House should not hide behind his son's death to avoid such an investigation.

CNN's Barbara Starr joins me now live from the Pentagon.

Barbara, what might President Trump say about this, this evening?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, that's what we don't know just yet, Jake.

What we do know is last night the White House came to Pentagon officials and said what could be made public about this highly classified, highly controversial raid? The White House clearly feeling some of that heat because the Navy SEAL died. Several were wounded. Civilians on the ground were killed. A U.S. aircraft was destroyed.

A very controversial raid last month by special operations forces in Yemen, the first of the Trump administration in that country, they were going after an al Qaeda affiliate. They were gathering up intelligence. What everyone is waiting to see, what the president might address, we don't know for sure, is, did they get enough valuable intelligence on this raid to make the high price of it really worthwhile?

There is a lot of dispute about that. There have been some news reports that they got no valuable intelligence. Sources are telling us here at CNN that they got large amounts of intelligence, and that, in fact, this all reflects a new expanded military posture in going after al Qaeda in Yemen.

Expect to see more raids, expect to see more U.S. troops going in on the ground. They want to wipe out al Qaeda in that country, for a very clear reason. This is a group, an al Qaeda affiliate, that is very experienced in making bombs, bombs that can get onto airplanes, and they were behind that "Charlie Hebdo" attack in Paris, it is said.

They have proven they can export terrorism to the West. The U.S. under the Trump administration, the U.S. military really turning a very focused eye on Yemen. Now we will see tonight how much and if the president talks about it -- Jake.

TAPPER: Barbara, the SEALs on the ground encountered quite significant resistance. I guess one of the questions is, were Pentagon officials aware of just who was in the compound at the time?

STARR: This is a key question. You have honed in on it exactly about why this raid is so controversial.

When Navy SEALs, Army Delta Force go in, you know better than I do, Jake, they keep surveillance on a target for days before they go in. They know who is there. They know the opposition forces that are there. They know how heavily they are armed.

[16:10:01]

How is it that the SEALs encountered a wall of fire that resulted in these deaths, in the wounding of so many? What didn't they know when they went in? How did they get surprised? This will all be part of the investigation.

TAPPER: Barbara Starr at the Pentagon for us, Barbara, thank you so much.

So, will Congress embrace the agenda that President Trump is expected to present in his speech this evening? Or are Republican lawmakers on a different page?

That story next.

(COMMERCIAL BREAK)

TAPPER: Welcome back to THE LEAD. I'm Jake Tapper.

More on our politics lead.

President Trump is right now preparing to give his first major address to Congress this evening. It comes at a critical time for Republicans who are looking for their top guy to pave the way, as the party breaks into factions over a promise made more than six years ago to replace President Obama's health care law.

CNN's Manu Raju is live for us on Capitol Hill.

And, Manu, Republicans passed an Obamacare repeal with a Democratic president.

[16:15:04] Why so much trouble getting done with President Trump waiting to proudly display a brand new law for the cameras?

MANU RAJU, CNN SENIOR CONGRESSIONAL REPORTER: Well, Jake, a lot of concerns from conservatives over the details, including a centerpiece of the plan to give refundable tax credits for people to buy health insurance. But, Jake, one thing is clear, that it's hardly the only issue that is causing some concerns among Republicans on the Hill.

(BEGIN VIDEOTAPE)

RAJU (voice-over): Tonight, President Trump prepares to sell his agenda to Congress, but he's confronting a party divided over the path ahead. The president is facing questions from fellow Republicans about the cost of his proposals, including the wall on the border with Mexico. And his new defense budget, which promises to ratchet up spending by $54 billion, some top Republicans say that falls short.

SEN. JOHN MCCAIN (R), ARIZONA: This is not enough. There's not nearly enough, and it simply will not take care of the issues and challenges we have. For example, half the F-18s are now grounded for lack of parts, and we have increased operations both in Syria and Afghanistan.

RAJU: And new push back from House conservatives, now threatening to derail GOP plans to repeal and replace Obamacare.

(on camera): So, you'll vote against this plan if it were to come up?

UNIDENTIFIED MALE: I've got big concerns. I think a lot of members do with the plan as it's proposed right now.

RAJU (voice-over): A growing number of House Republicans are questioning a central element of the health plan. New refundable tax credits that Americans would use to buy health insurance. Some conservatives view that plan as another entitlement.

(on camera): Do you have any concerns with that, specifically their concern about this creating potentially new entitlement?

UNIDENTIFIED MALE: Correct. I think that's the $94 question. Do you go from -- again -- a non-means-tested program where Bill Gates and others are going to be getting a check with regard to their health care I think opens up Pandora's box in terms of what comes next on health care.

RAJU: Would you oppose that bill?

UNIDENTIFIED MALE: In its present form, yes.

RAJU (voice-over): House Speaker Paul Ryan predicted the party will ultimately unite behind one plan.

REP. PAUL RYAN (R-WI), SPEAKER OF THE HOUSE: This is a plan that we are all working on together, the House, the Senate, the White House. When we get everything done and right, we're going to be unified on this.

RAJU: Yet some Republicans are uncertain about other elements of Trump's agenda, including ramping up defense spending at a time of rising deficits.

UNIDENTIFIED MALE: Don't exempt the Department of Defense from cuts itself in terms of cutting Pentagon waste. I just -- I think that the Pentagon is way too top heavy.

RAJU: And threatening to overshadow the president's agenda is the investigation into alleged Trump campaign contact with Russian officials during last year's elections.

UNIDENTIFIED MALE: I'm not downplaying it. We have started our investigation.

(END VIDEOTAPE)

RAJU: And, Jake, today, even more pushback over the White House's plans to cut spending for the State Department by roughly 37 percent. Lindsey Graham who is a key appropriator said, quote, "It's definitely dead on arrival," and the Majority Leader Mitch McConnell saying, it, quote, "Probably wouldn't pass the Senate at those funding levels." So, a sign, Jake, that the president has a lot of work to do on Capitol Hill -- Jake.

TAPPER: I remember all that talk about increasing spending for security for diplomats after Benghazi.

Manu Raju, thank you so much. We'll talk to Senator Rand Paul about Republican plans to repeal and

replace Obamacare and why some GOP lawmakers say they won't replace one draft of the plan, as you just heard. That's ahead.

Then, President Trump giving himself a "C-plus" for messaging and "A" for effort and "A" for accomplishments so far. Are those fair grades? That story next.

(COMMERCIAL BREAK)

[16:23:00] TAPPER: Welcome back.

We've got lots to talk about in the politics lead. So, let's talk to my panel.

First of all, let's talk about this breaking news. A senior administration official tells me and some other reporters today that President Trump is eager to have some sort of compromise immigration bill, one that would not have a path to citizenship for undocumented immigrants, but a path to a legal status as long as they have a job and pay taxes.

When we were talking to the senior administration official, won't this upset the president's base? The feeling was, no, it will be everybody coming together. It will be a negotiation. Is it possible, do you think this would be the thing the president would actually possibly lose his base on?

MARY KATHARINE HAM, SENIOR WRITER, THE FEDERALIST: Well, there's always been an outside possibility that Trump -- I'm hopelessly naive -- that Trump could be a Nixon to China on comprehensive immigration reform --

TAPPER: Yes.

HAM: -- because people believe him when it comes to security. And that's been the missing part. You cannot get this part over here, the comprehensive immigration reform, if people do not believe you're serious about the border and about enforcement and enforcing the law. People believe him. So, I think he could have some leeway on that.

But it was such a huge part of his campaign. That being said, a couple years before his campaign, he clearly didn't believe what he was saying during the campaign about immigration.

TAPPER: Right, because he faulted -- he faulted Mitt Romney for doing self-deportation.

RUTH MARCUS, COLUMNIST, THE WASHINGTON POST: The problem with the Nixon to China analogy, that Nixon knew exactly what he wanted out of the China relationship. Trump or senior administration official have been, if this is the path they're going to pursue, all over the lot on this. You know, we heard during the campaign -- no, everybody needs to leave and then we'll bring the good ones back. Now, all of a sudden, the DREAMers, those are, you know, his heart goes out to them, see what we can do for them. TAPPER: And, in fact, he said, perhaps, perhaps the senior

administration official said perhaps a path for citizenship for the DREAMers, too.

MARCUS: All power to him, all power to Nixon in China, going to be interesting.

TAPPER: This is definitely not Steven Bannon whispering in his ear. This is something else, I think.

JEFF MASON, WHITE HOUSE CORRESPONDENT, REUTERS: Yes, and I think, you know, you'd also have to get Democrats to come on board.

[16:25:03] And everything that President Trump has done so far on the issue of immigration and refugees has not exactly built goodwill about with Democrats in Congress. So, I think it will be a challenge to get bipartisan wave of support for anything he wants to do on immigration.

(CROSSTALK)

TAPPER: Challenge what?

HAM: Also a challenge for them to say no --

TAPPER: For the Democrat.

HAM: Right.

TAPPER: If he actually come to the table and says I really want to make a deal.

HAM: And the whole thing could be --

MASON: But will he? I mean, is that really something he's going to make a priority after the rhetoric that he has used for immigration?

TAPPER: I don't think this is a priority, but he did say it was something he'd like to do.

MARCUS: You know, I'm reminded I thought one of the most interesting things he said as president, he said the other day about health care -- wow, this is really complicated. And if you move one piece of this it affects all these other pieces. Welcome to the complications of making policy, Mr. President.

Sort of same thing with immigration. It's a really easy during campaign to talk about wall-building and mass deportation forces. It's a lot harder when you're governing. I hope he moves.

TAPPER: And let's talk about on the same subject these things called Skutniks, named after Lenny Skutnik who President Obama -- I mean, President Reagan in 1982 invited to the State of the Union, he had rescued a drowning woman who was in a plane crash. And since then, presidents and the opposition party bring Skutniks to herald an American hero or to illustrate a policy. Last year, President Obama's State of the Union guest included the Skutniks of a Syrian refugee and a Mexican immigrant.

This year, President Trump is bringing victims of crimes committed by undocumented immigrants. So, he is certainly still on the hard line path at least in that way.

MASON: That's right. That reinforces the message he made during the campaign and the message he's given since coming into office about cracking down on illegal immigration and the detriments of having people here who commit crimes.

MARCUS: I know it will never happen, but I really wish we could dispense with these human props.

TAPPER: You don't like the Skutniks?

MARCUS: I do not. I think they're just being used. And, you know, now, we have counter Skutniks, right?

TAPPER: Right.

MARCUS: Because Democrats in response to him inviting the families of people who have been harmed, have invited DREAMers and their own human props.

HAM: I'd do away with the whole speech.

TAPPER: You want it delivered by paper like Thomas Jefferson.

HAM: The first president who promises to do that got my vote.

TAPPER: So, President Trump was asked this morning on "Fox and Friends" to give himself a grade. Take a listen.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I think I've done great things, but I don't think I've -- I and my people, I don't think we've explained it well enough to the American public. I think I get an "A" in terms of what I've actually done, but in term of messaging I'd give myself a "C" or "C-plus".

UNIDENTIFIED FEMALE: How are you going to change that then?

TRUMP: Well, maybe I'd change it during the speech.

(END VIDEO CLIP)

TAPPER: So, kind of a reset he's hoping for this evening.

MASON: Maybe change the tone of the speech. He said that suggests that he realizes there needs to be a total shift tonight and I think a lot of people will be watching for that.

TAPPER: Do you agree with his assessment, "A" for achievement, "C", "C plus" for messaging?

MARCUS: I agree with part of his assessment. You can probably guess which part.

TAPPER: The messaging?

MARCUS: Yes. I mean, and possibly lower than that. Achievement is really easy to sign executive orders. The ones that have been most important have been, you know, particularly the one on extreme vetting and exclusion of not just Muslim, but people from Muslim majority nations have been the least successful.

I'm a card grader, but that's not an "A" or an "A-plus" in my book.

TAPPER: Mary Katharine, you know who he sounds like to me when he says "A" for what I'm doing, but I'm having communication issues?

HAM: Yes, I think it's President Obama.

TAPPER: A lot like President Obama.

HAM: I don't know that's actually a nod to that. It would be very trolly to nod to that.

But, look, I'm not sure -- here's the thing about him. The sound and the fury of Trump is part of what has worked for him in the past, so I'm not sure he thinks there need to be a tonal shift. What I think there needs to be is some pointing to a legislative path forward which we have not yet seen. So, maybe there is some of that here. And maybe the immigration talk is some attempting to bring some Democrats around.

MARCUS: He doesn't have enough kind of really complicated legislative things on his agenda, things that he said he was going to do. So, he's got health care, that's complicated. He's got infrastructure, that's popular but complicated because of how to pay for it. He's got tax reform which is super complicated and now, we're going to sort of layer in immigration here. That's a really big lift.

HAM: Yes, and Trump is very comfortable with layering all that rhetoric and then what you get to you get to. That's part of how he speaks. It's like, I'm going to layout all these things and we're not going to get to all of them.

MASON: That's another reason why the stakes for tonight's speech are so high. He has focused on executive orders so far, but he's going to need lawmakers support in order to have some legislative achievement. And so, when he comes and sort of delivers that pitch tonight, he'll be looking for some support, perhaps from both parties.

But in order to make some successes on infrastructure, on taxes, he'll need to set the right tone.

MARCUS: If you want, you know, he had an opportunity when he came in 39 long days ago --

TAPPER: Is that it?

MARCUS: I think that's correct. TAPPER: Oh, my God.

MARCUS: Emphasis on the long. To get that kind of Democratic support on things like infrastructure, but he has so enraged the Democratic base and --