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Trump's 2005 Tax Return Revealed; Resistance To Health Care Bill Grows;Fed Expected To Raise Rates. Aired 5:30-6a ET
Aired March 15, 2017 - 05:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[05:30:04] DAVE BRIGGS, CNN ANCHOR: Welcome back to EARLY START, everybody. I'm Dave Briggs.
CHRISTINE ROMANS, CNN ANCHOR: Good morning.
ROMANS: I'm Christine Romans. It is 30 minutes past the hour. Let's start with the tax reveal. Overnight, the big Trump tax tease turned out to be something closer to the Trump tax distraction, perhaps. The White House confirming a report that Donald Trump's 2005 tax return showed $38 million in taxes paid on more than $150 million in income.
The White House releasing the figures after MSNBC's Rachel Maddow teased a major scoop. She brought on Pulitzer prize-winning journalist David Cay Johnston, a tax expert, who said an anonymous source left the first two pages of Mr. Trump's return in his mailbox. In the end, Maddow's report was widely criticized as overhyped and a disappointment with only the topline figures on earnings and taxes paid. There's still a lot of questions here.
BRIGGS: There is, indeed. One of the big questions hanging over all of it, is there a chance the return was leaked by Mr. Trump, himself, perhaps in order to draw unwelcome attention away from the Republican health care bill and the Russia connection. CNN's Don Lemon asked the journalist who obtained the tax return that question.
(BEGIN VIDEO CLIP)
DON LEMON, CNN ANCHOR: Do you think it's possible that he could have sent them to you?
DAVID CAY JOHNSTON, JOURNALIST WHO RECEIVED TRUMP TAX RETURNS: Oh, absolutely. Donald Trump has a long history of leaking information about himself and he doesn't think like most of us do. He doesn't have the sort of framework of what makes him look good or look bad that the rest of us have.
(END VIDEO CLIP)
BRIGGS: The White House, for its part, took aim at the messenger saying, in part, "You know you are desperate for ratings when you are willing to violate the law to push a story about two pages of tax returns from over a decade ago." For the record, it is not illegal to report the contents of a legally obtained tax return. Mr. Trump promised to release his tax returns himself after the conclusion of a routine audit but it remains unclear when that might be. More recently, aides have suggested that since he won the election he will not be releasing his tax returns.
ROMANS: What these pages don't display are the biggest concerns over the president's finances. Where his income comes from, the nature of his investments, and more importantly, any financial ties to Russia or any other sovereign country. So what do President Trump's 2005 tax returns show? First, the president wrote off more than $100 million in losses in the year. Of the $38 million the president paid, about $5 million was regular income tax.
The rest was paid under the alternative minimum tax -- the AMT. It is an additional tax meant to prevent wealthy Americans from avoiding income taxes. The president wants to eliminate it. It has crept into the middle-class. You know, people hate this AMT. Without that, Trump would have paid a four percent tax rate in 2005. That's less than what most middle-class Americans pay.
BRIGGS: Joining us from Washington this morning, our "CNN POLITICS" digital editor Zach Wolf. Good morning to you, sir. Trump, Jr. -- Don, Jr. tweeted, "I don't know how much, but if I recall correctly $38 million is a lot more than zero, right?" The point is the speculation was that Donald Trump paid zero taxes for many, many years, at least leading up when people were asking for these tax returns. Is there any chance that this leak actually helps the narrative of the White House?
ZACHARY WOLF, DIGITAL EDITOR, CNN POLITICS: Well, it certainly doesn't hurt because we're talking about this right now. We're talking about the fact that he actually paid taxes and that was an open question and, honestly, continues to be an open question for, you know, the majority of years since the seventies after all those write- downs. So we have kind of a little bit of information that works in his favor and it is potentially a distraction from some of these other things you see going on. And that's why Democrats, oddly enough, are saying to themselves do we need to be focusing on this.
ROMANS: Yes. I mean, there's a health care battle going on right now and that's where Democrats would like to have their fire focused on. You know, people who may lose insurance or may walk away from their insurance, and for the higher cost for people. You know, AARP with this big push about an age tax for people aged 50 to 64. That's what Democrats would like to be talking about, Zach.
WOLF: That's right, and so you saw people like, you know, Brian Fallon, who was a spokesman for Hillary Clinton during the campaign. That was one of their main things during the campaign -- let's see Donald Trump's tax returns. Now that we see it and that he did pay some income tax, they're interested in looking at something else.
ROMANS: Yes. We were showing Brian Fallon's tweet that people should be distracted by two pages of tax returns from 2005. (INAUDIBLE). We need to see the tax returns for so long, you're right.
BRIGGS: Yes, this probably helps the overall narrative. Let's switch now to the health care narrative which is not going well. You've got fire from the right, from the left, not a lot embracing this bill beyond those architects of it.
Chris Ruddy, who is a friend of the president's -- he runs the website "Newsmax," he's a member at Mar-a-Lago -- wrote an article about this bill encouraging the president to scrap this -- come up with a more bipartisan bill. "Clearly, Trump has been acting in good faith, but he shouldn't trust House Republicans. The president should be sticking to his guns on health care reform. He did so in the campaign, helping him win Democratic states like Wisconsin, Michigan, and Pennsylvania. Here is a game plan for Trump to regain the initiative. Ditch the Freedom Caucus and the handful of Senate Republicans who want a complete repeal of Obamacare."
[05:35:25] He speaks tonight in Nashville. The question, Zach, is what do you expect the public embrace of this bill to be? Will he own it, will he cast it off as Paul Ryan's plan, or will he make the big public sell?
WOLF: It's interesting. As you've seen him refer to this bill, he keeps saying well, you know, the best thing to do -- for me to do would just be to let Obamacare die, essentially. You can let it die. It's not the right thing to do but that would be the best thing to do. So you kind of wonder if maybe he's going to move in that direction.
There is so much swirling around about this bill, you know. The math appears to be so hard on this particular bill without some sort of changes. At first, to make the conservatives and the House happy, but then you have to change it again or figure out a way to get the moderates and the Senate happy. So the legislative path is so difficult, it's not clear to me how they fix this.
ROMANS: Is this the only vehicle? I mean, Sean Spicer -- if you listen to Sean, this is the last, best hope, and let's listen to what he told reporters yesterday.
(BEGIN VIDEO CLIP)
SEAN SPICER, WHITE HOUSE PRESS SECRETARY: This is the only vehicle that seeks to achieve what people on our side of the aisle have been talking about since 2010. This is it. If we don't get this through, the goal of repealing Obamacare and instituting a system that will be patient-centered is going to be unbelievably difficult.
(END VIDEO CLIP)
ROMANS: Is he right? Is this it?
WOLF: Yes. There certainly is no other bill out there that would even come close to having votes in the House and votes in the Senate, so this is the only sort of viable alternative at the moment. Maybe there's some other bill they could come up with in the future but if they want to deliver on that core promise that Republicans have been saying they would do if they got power, for the last seven years, this is the one. ROMANS: Is it true that if Obamacare were to continue to be the law of the land it would wither and die and implode on itself? I don't think that all health care economists think that's actually true.
WOLF: Right, and in fact, the CBO, in their estimate, said that it could -- it could survive as well, I believe. So, you know, on the other hand, if you have the president, if you have Congress -- the people who control government and the purse strings -- essentially trying to smother it in the future that could make it very difficult.
BRIGGS: Quickly, before you go, what do we expect James Comey to say today regarding the Russia investigation?
WOLF: That's the great question. He told some senators that he would tell them by today if he's investigating that so we'll have to see. Everybody's going to be paying attention to that.
ROMANS: All right. Zach Wolf has another very busy day in Washington with that beautiful Capitol behind him. Ah, the government at work. Thanks, Zach.
WOLF: Thank you.
ROMANS: If you want your questions answered about the health care bill, be sure to join us tonight for what promises to be a very interesting discussion. The Health secretary, Tom Price, joins CNN's Wolf Blitzer and Dana Bash for a live town hall. That's what's next for the Republican bill and for tens of millions of people who could be faced with new health care decisions. Join us tonight at 9:00, only on CNN.
BRIGGS: And remember, he said, "I firmly believe nobody will be worse off financially in the process." That may come up tonight.
ROMANS: That may come up. All right, speaking of money, time for an early start on your money. An East Coast blizzard could not stop the two-day Fed meeting and it may be time to get ready for another interest rate hike. The Federal Reserve is expected to raise interest rates later today, the second time in three months. If so, it means the Central Bank thinks the American economy can handle it. The American economy had strong job gains, inflation is starting to percolate.
A rate hike would not be a surprise to Wall Street. They've really already priced this into financial markets. What investors will look for is timing -- how many times the Fed will hike rates this year and how quickly. The Fed has only raised rates two times since 2015. Before that, it was 10 years of just really ultra-low interest rates to goose the economy. What will Fed chair Janet Yellen say, if anything, about President Trump's financial policies? In the past, she has pushed back against his plans to dismantle Dodd-Frank. That's the financial regulation reform.
So what does a rate hike mean for you? Well, it isn't just a wonky two-day meeting with charts and graphs about the economy. Higher interest rates mean higher borrowing costs. So millions of Americans can expect to pay a bit more on their credit card debt if you're holding a balance, on your car loans -- new car loans -- new mortgages. Mortgage rates will likely rise. It's good news for savers. A bump in interest rates means more interest on savings accounts, and savers have really been hammered since the financial crisis.
BRIGGS: Any inkling what that might mean for the markets?
ROMANS: I think that if they do it slow and steady and Janet Yellen really projects what they're going to do for the rest of the year, it will -- it will be easily handled by the markets.
[05:40:05] BRIGGS: Hope so. All right. Well, the U.S. concerned Russia may be meddling beyond its borders once again. We're live in Moscow, next.
BRIGGS: The Pentagon growing increasingly concerned about Russia interfering in Libya. U.S. aerial reconnaissance detecting Russian transport aircraft and a large drone at an air base in western Egypt, close to the Libyan border. One U.S. general testifying he believes the Kremlin is trying to determine the course of the political future there in Libya. Let's go live to Moscow and bring in CNN's Clare Sebastian for the latest developments. Good morning to you, Clare.
CLARE SEBASTIAN, CNN INTERNATIONAL CORRESPONDENT: Good morning, Dave. Well, Russia is denying these reports. The Kremlin spokesman, Dmitry Peskov, saying he has no information either on the presence of a drone in the west of Egypt near the Libyan border or Russian Special Forces, as was earlier reported by Reuters. The defense minister flat-out denying that, calling it a hoax.
[05:45:15] But the Kremlin also said that they are looking to see the situation stabilize in Libya and certainly not denying that there have been contacts with all sides in the conflict. Now, those contacts, the ones that have caused the most attention in the west, are not with the internationally-backed government in Tripoli but with Gen. Khalifa Haftar who leads a rival faction out of the eastern city of Tobruk. He visited Moscow twice last year. He also boarded a Russian aircraft carrier in the Mediterranean in January this year and held a videoconference there with the Russian defense minister.
And that is suddenly raising concerns that Russia may be looking to install a pro-Russian leader in Libya to perhaps expand its sphere of influence in the Middle East in North Africa, as it did in Syria by propping up the regime of Bashar al-Assad. The prize would certainly be significant not only in increased presence on the world stage but, also, access to Libya's ports in the Mediterranean and to its lucrative oil sector. Russia lost billions in canceled contracts that it had with the Gaddafi regime during the Arab Spring and it certainly has interest in that sector.But as for its part, Russia is saying that it is talking to both sides. It simply wants to see the situation stabilized to stop the spread of terror in that region, Dave.
BRIGGS: Yes, amazing to still see a leadership void there in Libya. We appreciate it. Thank you.
ROMANS: All right. The alleged hackers behind that widespread Yahoo hack, they will soon be revealed. We're going to check on CNN Money Stream, next.
[05:51:05] BRIGGS: Voters are heading to the polls in the Netherlands today in what's seen as the first of several elections testing the populous sentiment in Europe this year. Immigration and the continued membership in the European Union have been some of the hot-button issues of the campaign to elect a new Parliament. And it comes amid growing tensions with Turkey serving as a backdrop. CNN's Atika Shubert live in the Netherlands as voting gets underway there. Good morning to you. Why are some comparing this to the United States situation and of our elections?
ATIKA SHUBERT, CNN INTERNATIONAL CORRESPONDENT: Well, what we've seen in this election is that a lot of voters are abandoning mainstream parties, especially the Labor Party but also the liberals as well. Really, they've dropped in the polls and a lot of the voters are contemplating voters for much more fringed protest votes such as the Freedom Party which is led by Geert Wilders.
And he's been compared-- he's been called the Dutch Donald Trump, something he doesn't like but he does share some of the same views as Donald Trump. He's very tough on immigration. He wants to ban the Muslim holy book, the Quran, and he's very anti-E.U. as well. So there's a lot of question as to how much support he will get and whether this is a litmus test for other elections happening in France and Germany later this year.
Now, we're in the town of Volendam, which is about 23,000 people. In the last election they voted quite strongly for Geert Wilders but this election that may not be the case. A lot of voters are telling us that the economy is more important to them now, health care is more important, and the talk about immigration hasn't featured as much for them when they go into the voting booths. But we won't know until the results are finally in. That will happen at around 9:00 p.m. local time, Dave.
BRIGGS: All right, we'll check in with you tomorrow. Thank you, Atika.
Five deaths now blamed on the Nor'easter that slammed the Northeast, but the snowfall, strong winds not over yet for some areas. The storm easier than expected on major cities like Philadelphia, Washington, and here in New York, but smaller ones like Binghamton, New York were buried. Spot the car there under all that snow? You see a mirror, at least. Record-breaking snow totals of almost 30 inches there with more expected today, Christine.
ROMANS: The snow, the wind, the sleet making a mess in Pennsylvania. This downed tree crushed a car and a car spun out as cameras were rolling near Boston. Amtrak will upgrade modified service today between Boston and D.C. Nearly 1,000 flights canceled so far for today. We've got, I think, a total of almost 9,000 cancellations since Monday. Schools in Boston still closed today. Some of the New York suburbs have closed schools as well.
BRIGGS: Including yours.
ROMANS: And mine.
BRIGGS: Good luck with that. So who has the most snow to dig out from and what conditions are they facing? Meteorologist Pedram Javaheri has the very latest.
PEDRAM JAVAHERI, AMS METEOROLOGIST: Now, Dave and Christine, after yesterday here seeing some improvement across parts of the major cities, but you work your ways towards the north it is a different story. Still some heavy snow left in places around the southwest. The nineties in place -- around places like Phoenix.
But look at this. Bridgewater out in the Catskill Mountains, 41 inches came down. In places like Norfolk, we're talking about say 15 to 25 or so inches, and just a few miles make a significant difference. Central Park, seven inches. Four miles north of town, observation of 13 inches in place. So again, it shows you the significant differences based on the track of that storm.
But still, some snow showers left in places around northern Vermont, northern New Hampshire today. About three million underneath the blizzard warning that's in place and about 20 million in the winter weather alerts. But I expect about eight to 12 more inches to come down in places like Syracuse, potentially around Burlington, and work your way out toward Stowe. Could see another foot of this before it's all done with by this afternoon.
And just a blustery day left in store across much of the Northeast today and notice it really wants to warm up but not by much. Not at the seasonal levels there where we should be around 49. We keep it below that level through at least the next week across the Northeast.
ROMANS: All right, Pedram. I see snow again on Sunday.
[05:55:00] All right. Secretary of State Rex Tillerson arrives in Tokyo this morning. The North Korean missile threat at the top of the agenda in his meetings with Japanese officials. He will also discuss U.S. economic and security interests in the region. The meetings come as the U.S., Japan, and South Korea are conducting naval drills in the area where the North launched missiles last week. Tillerson will also visit South Korea and China on his first Asian trip.
BRIGGS: So many questions there. If only the media were able to ask those questions.
ROMANS: Oh, yes.
BRIGGS: Boy --
ROMANS: He's not -- he's not going with a --
BRIGGS: -- it's a major trip. All right, they were able to laugh afterwards -- the couple here -- as this viral video -- the BBC interview -- after two toddlers busted into the home -- the interview room -- followed by his wife. A mad scramble to retrieve them. This guy's speaking publicly for the first time with the family, this time in a follow-up interview with the BBC. The kids were welcomed guests this time. He's Professor Robert Kelly. His wife -- they say there were mortified at first, then found the humor in it all.
(BEGIN VIDEO CLIP)
PROFESSOR ROBERT KELLY: We watched it multiple times, too, and our families have watched as well, and everybody we know seems to think it's pretty hysterical -- yes. So we understand why people find it enjoyable and sort of catching a regular family off guard and stuff. So, yes, it was -- it was funny. We understand that.
(END VIDEO CLIP)
BRIGGS: He's still not really laughing about it just yet but Kelly says he usually locks the door. He forgot this time, setting off what his wife described as chaos. How do you think he handled it?
ROMANS: And the international, you know, fascination sort of surprised him. He said his parents live in Ohio and the reporters like tracked down his parents. And he had to turn his phone off because he couldn't -- he couldn't even -- he was being called by so many reporters.
BRIGGS: They're talking about approaching 100 million YouTube views so it has been --
ROMANS: Love it.
BRIGGS: -- an explosion.
ROMANS: All right, let's get a check on CNN Money Stream this morning. Global markets mostly higher. A little bit of a dip yesterday. The big story here -- the only story today -- the Federal Reserve is expected to raise interest rates, the second time in three months and investors are waiting on an announcement. It comes at 2:00 p.m. Eastern time. Also watching oil prices. They hit a three-month low yesterday, dragging down energy stocks. Right now, a check of futures, they are slightly higher.
The Department of Justice will announce charges today against hackers with ties to Russia who investigators believe were behind the hacking of hundreds of millions of Yahoo accounts. That's according to a law enforcement source who would not say if the breach is connected to the Russian government. Hackers stole data that included names, email addresses, passwords. We're told it wasn't financial information, though. Yahoo announced last year it had been breached at least twice. Ivanka Trump's fine jewelry line is no more. Ivanka's brand has discontinued its high-end bracelets, necklaces, and rings. The company confirming this to "The New York Times." Prices for those pieces range from anywhere -- $1,000 to $20,000. Now the brand will focus on more affordable costume jewelry.
This announcement comes at a time when Neiman Marcus, Nordstrom's, and other retailers have backed away from carrying Ivanka's product and grassroots movements have called for boycotts of companies associated with the Trump name. The company, though, said its decision is only so it can offer more accessible price points. And we saw reporting earlier this week that on Amazon --
BRIGGS: They're crushing it.
ROMANS: -- they're crushing it, so there you go.
BRIGGS: She stepped away from the company, though, but they have --
ROMANS: It still bears her name, like everything Trump.
BRIGGS: They had a very productive month of February.
ROMANS: All right. Thanks for joining us. I'm Christine Romans.
BRIGGS: And I'm Dave Briggs. "NEW DAY" starts right now. Lots to get to. See you tomorrow.
(BEGIN VIDEO CLIP)
ROMANS: Leaked documents reveal President Trump's tax returns.
UNIDENTIFIED MALE: This really is just the tip of the iceberg.
UNIDENTIFIED MALE: This report could be a mistake for Democrats to get distracted by.
JOHNSTON: Donald has a long history of leaking information about himself. Donald may well have been the source.
SEN. JOHN MCCAIN (R), ARIZONA: Americans need to know if, indeed, the former President of the United States wiretapped the Trump Tower.
SPICER: He feels very confident this will vindicate him.
BRIGGS: James Comey expected to confirm if the FBI's investigating Trump's ties to Russia.
UNIDENTIFIED MALE: Fourteen million people will lose their insurance. That's not what President Trump promised.
SPICER: This is the American Health Care Act. The president's proud of it.
SEN. CHUCK SCHUMER (D-NY), MINORITY LEADER: If it's so good why aren't they rushing to have their names on it? (END VIDEO CLIP)
ANNOUNCER: This is NEW DAY with Chris Cuomo and Alisyn Camerota.
CHRIS CUOMO, CNN ANCHOR: All right, we want to welcome our viewers in the United States and around the world. This is NEW DAY. It's Wednesday, March 15th, 6:00 here in New York. Alisyn is off. Poppy Harlow joining me. We've got a big day. Thanks for being here.
POPPY HARLOW, CNN ANCHOR: A lot of news. Good morning.
CUOMO: Yes, we do. Up first, somebody who had a client copy leaked the president's 2005 tax returns. In them, we see how much he paid in taxes and how big his business losses were, and how that helped reduce his tax burden.
HARLOW: Right. Why did this come out now after he refused to release any of his tax returns as a candidate and even when he became president? Is this an intentional distraction from the growing number of Republicans turning against their own party's health care plan? And, of course, the wiretapping allegations and the investigations into alleged ties between the president's team and Russia.
So much at stake on day 55 of the Trump presidency. We have it all covered for you this morning. Let's begin with Suzanne Malveaux live in Washington.