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Trump's Proposed Budget; Flynn Paid by Russian TV; Trump Changes Story; Judges Block Travel Ban. Aired 1-1:30p ET

Aired March 16, 2017 - 13:00   ET

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


(COMMERCIAL BREAK)

WOLF BLITZER, CNN ANCHOR: Hello, I'm Wolf Blitzer. It's 1:00 p.m. here in Washington, 5:00 p.m. in Dublin, 2:00 a.m. in Tokyo. Wherever you're watching from around the world, thanks very much for joining us.

Up first, President Trump unveils his $1.1 trillion budget and the cuts to nonmilitary spending are deep. The budget blueprint calls for a $54 billion increase in defense spending.

Take a look at this graphic. On the left, you see the departments getting an increase. That would be Defense, Homeland Security, Veterans Affairs, the Social Security Administration.

On the left are the agencies also facing cuts. The Environmental Protection Agency, the State Department, the Agriculture Department, the Labor Department, Health and Human Services and the list goes on and on.

Let's bring in our Senior White House Correspondent Jim Acosta. Jim, this blueprint is just the start of the budget process. Well, what message is the president sending with this plan because it's really only a recommendation. It has to be appropriated by the House and Senate.

JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT: That's right, Wolf. And we're going to get a briefing here in just about an hour from now. The director of the Office of Management and Budget, Mick Mulvaney, is going to be talking to reporters along with the White House press secretary, Sean Spicer.

Mulvaney did brief reporters yesterday about what's in this budget. And he's describing this as a hard power budget to contrast with that use of the term soft power during the Obama administration. A term that Hillary Clinton liked to use over at the State Department. She liked to talk about smart power and soft power over at the State Department. They're talking about hard power in this budget.

And when you look at what they're talking about, $54 billion, in terms of an increase in spending for the Pentagon. And then, you just showed the list. If you go through some of the more domestic-oriented departments of the federal budget, you're talking about a 16.2 percent decrease for Health and Human Services, a 31.4 percent decrease for the EPA, 28.7 percent decrease for the State Department and on and on. And, Wolf, what you're going to have happen here in the coming days is

you're going to have both Democrats and Republicans pick apart this budget and see things that they don't like.

You're already hearing from the likes of Senator Rob Portman from Ohio, Marco Rubio down in Florida, Lindsey Graham in South Carolina, all saying that this budget for -- in terms of some parts of it, is essentially not just dead on arrival but dead on departure.

You have Marco Rubio coming out and saying today that the president doesn't set the budget. We set the budget over here on Capitol Hill. That just gives you a sense as to what the reception is in Congress right now. And not just on the Republican side but on the Democratic side. The head of the DNC, Tom Perez, quoting Joe Biden, saying, "Don't tell me where your values are. Show me your budget and we'll see where your values are."

And so, it's a pretty sharp response to this budget right now but you're going to hear Mick Mulvaney, in about an hour from now, defend this budget and say, this is what the voters approved back in November and that's going to be reflected in this budget.

BLITZER: Yes, and now comes the hard part. He's got to get it appropriated by the House and Senate. And, by all accounts, there are going to be major, major changes.

The president is going to learn, presumably, what other presidents have learned. They can make these budget recommendations but it's up to Congress in the end to decide what is appropriated and what is not. We'll see what happens.

Jim Acosta over at the White House, thanks very much.

President Trump, meanwhile, is defending his unsubstantiated wiretap claims against former President Obama. But he may have complicated the situation even more.

Let's go to our Senior Congressional Reporter Manu Raju. He's up on Capitol Hill with details. Manu, let's listen to what the president said on Fox News last night.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: With the CIA -- I just want people to know. The CIA was hacked and a lot of things taken. That was during the Obama years. That was not during us. That was during the Obama situation. Mike Pompeo is there now doing a fantastic job.

(END VIDEO CLIP)

BLITZER: All right. So, he confirmed what other officials have been refusing to do because they couldn't do it. That the CIA was hacked. Explain why this is causing concern where you are up on Capitol Hill?

MANU RAJU, CNN SENIOR CONGRESSIONAL REPORTER: Well, from one Democrat in particular, Adam Schiff, who is the top Democrat in the House Intelligence Committee, said the president may have revealed classified information, Wolf, by saying that the CIA, in fact, was hacked.

Now, this is what Adam Schiff just sent out in a statement, saying that in his effort to once again blame Obama, the president appears to have discussed something that, if true and accurate, would otherwise be considered classified information. It would be one thing if the president's statement or the product of intelligence community discussion and a purposeful decision to disclose information to the public, but that is unlikely to be the case.

Now, Wolf, Schiff also notes that the president does have the power to declassify just about anything, given that he is the president of the United States. The one person who can unilaterally decide to declassify classified material.

[13:05:03] But the question is, did the president intend to do that last night on Fox News or did he just -- was he trying to deflect blame for this major leak of information from WikiLeaks just a couple of weeks ago. Troves and troves of information of -- from the CIA, internal information appeared to have been hacked.

But, as you mentioned, Wolf, nobody in the government has officially confirmed that the CIA had been hacked, until the president of the United States admitted last night. And did he mean to do it last night or was this a mistake, Wolf? That is a question that we don't have an answer to quite yet.

BLITZER: And did he mean to say all that information was retrieved, was received through a hack? Through a cyberattack, if you will, as opposed to someone on the inside collecting that information on a thumb drive or whatever and then releasing it. The use of the word hack, by the president, was very specific.

We'll see what happens. Clearly, he has now confirmed, according to the president of the United States, that the CIA was hacked.

Manu Raju up on Capitol Hill. Thanks very much.

Meanwhile, President Trump's revised travel ban hits a legal roadblock. Federal judges in Maryland and Hawaii have temporarily blocked the ban. It was supposed to go into effect today.

Our Justice Reporter Laura Jarrett, she broke the details on the Maryland decision very early this morning. Glad you were up very early. You were way ahead of the curve on everyone this morning.

But tell our viewers here in the United States and around the world what these two federal judges have now decided.

LAURA JARRETT, CNN JUSTICE REPORTER: So, these two federal judges, Wolf, have really looked at this and said there's some serious constitutional problems with this revised executive order. And they say, look, the administration did a lot of work. They've exempted green card holders. They've exempted those with valid visas. But it still has a 90-day ban on those traveling from six Muslim majority countries

Plus, looking at all of these statements from Trump on the campaign trail, combined with what senior advisers have said more recently. And they're looking at all of those things together to say, wait a minute. We have to put this on hold for now, because we think this entire executive order is infected with religious discrimination, Wolf.

Now, we haven't heard anything from Trump yet. But he did hear him blast the federal court in Hawaii last night. So, let's take a listen.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: This new order was tailored to the dictates of the Ninth Circuit's, in my opinion, flawed ruling. This is, in the opinion of many, an unprecedented judicial overreach. We're going to fight this terrible ruin. We're going to take our case as far as it needs to go, including all the way up to the Supreme Court.

(END VIDEO CLIP)

JARRETT: So, now the question is, does he let his lawyers handle this at the Justice Department and proceed with the appeal, or does he come out and say something about Maryland again today?

BLITZER: And his angry words against these judges, these federal judges, presumably that could irritate a lot of these judges and further complicate the situation for the president.

JARRETT: Well, interestingly, last night, Wolf, several judges on the Ninth Circuit Court of Appeals took note of that explicitly and called him out in a 27-page missive, actually. And they were actually in support of the travel ban and said, look, we actually think our colleagues got it wrong last month. But they called President Trump out for criticizing Judge Robart out in Seattle and said that was improper.

BLITZER: Yes. All right. Well, a lot of people are wondering what happens next. But you're all over it. Good reporting for us, Laura. Thanks very much. Laura Jarrett reporting.

The Republican plan to repeal and replace Obamacare has cleared yet another hurdle but it still faces enormous challenges ahead. Republican Congressman Mark Meadows of Maryland is the chairman of the House Freedom Caucus. He's joining us live from Capitol Hill. Congressman, thanks so much for joining us.

REP. MARK MEADOWS (R), NORTH CAROLINA, CHAIRMAN, HOUSE FREEDOM CAUCUS: It's great to be with you, Wolf. Thanks so much.

BLITZER: All right. You said, yesterday, Congressman, that there are not enough votes for this bill, as it currently stands, to pass the House of Representatives. Do you believe that's still the case? MEADOWS: Well, it is still the case, Wolf. You know, we have a

pretty sophisticated whip operation within our caucus. And so, even beyond our members, you can look at the number of other members that still have great concerns.

But we're working. We're working trying to reconcile those differences and come together. But today, if this bill were put on the floor, it wouldn't have enough votes to pass.

BLITZER: Because you need 21 Republicans to bolt. By our count there are at least 19 who have expressed opposition or leaning opposition. What's your account?

MEADOWS: You know, we don't give the exact whip account. It's a great question, Wolf. But I would say that if there were odds-makers on there being 40 nos and another 20 undecideds, they would not be too far off.

[13:10:01] But with that, I mean, it's a fluid situation. As you make one change, you either add or subtract the number of votes. But, today, you know, we're not talking about one or two votes. We're talking about 10s or 20s, in terms of the number of people who would have to change their mind to pass this current piece of legislation.

BLITZER: Last night, Dana Bash and I, we moderated a town hall with the Health and Human Services secretary, Tom Price. And we asked them about your comment that the Freedom Caucus has enough votes to block the bill. I want you to listen to what he said during the CNN town hall.

(BEGIN VIDEO CLIP)

TOM PRICE, SECRETARY, U.S. HEALTH AND HUMAN SERVICES: He wanted a system that would make certain we addressed pre-existing conditions. That made certain that every American had the financial feasibility to purchase coverage. That we made certain that the Medicaid system actually worked for patients. That we have purchase across state lines. That we were driving down drug costs. That we were making certain that the system had a transition to this new system that is going to work, I believe, so much better than where we currently are.

So, we want to make certain that we're responding to the needs of the American people. And when we do that, I'm convinced that the individuals who are charged with, then, voting on that legislation will be supportive.

(END VIDEO CLIP)

BLITZER: All right. What's your reaction, Congressman?

MEADOWS: Well, you know, you guys did a great job last night and Secretary Price is right on one thing. When we do all of the things that he mentioned, there will be the votes. The problem is this particular bill doesn't do all of those things. I mean, a lot of that is what they call in the phase three portion where you actually drive down cost. You get competition across state lines. Those are not in this bill that we're asking to consider today.

And so, what we're trying to do -- and I was on the Senate side today talking to some of the more conservative and moderate members over there, trying to find some consensus. And as we look at that, it's about getting as much as we possibly can in the repeal aspect. We're not repealing all of Obamacare. In fact, we're leaving almost half of Obamacare in place with this current bill.

So, we've got to get rid of it all. And then, as we look at a replacement plan for that, making sure that there's an adequate safety net, I'm committed. I think I committed on CNN that those pre- existing conditions were going to have a path there to make sure that we take care of those that have concerns with that particular issue.

BLITZER: On health care, you've heard what Republican Senator Tom Cotton of Arkansas has said, that you won't have enough votes, certainly not enough votes to get to 60 in the Senate. And you may not even have enough to get to 51 in the Senate, because some Republicans there are bolting.

So, would it be wise for the speaker to pull this legislation right now and start from scratch?

MEADOWS: Well, you know, I don't think there's a real desire to start from scratch. I think what they are trying to do is look at some of the components. And there are some good components. You know, even though I don't support this particular bill, there are some good components in there.

But I can tell you, based on my conversations with my Senate colleagues, and certainly with my House colleagues, there's not enough votes in either place to pass it the way that it is.

But I promise the president, personally, that I would negotiate in good faith. And I can tell you that we've been spending 18 hours a day trying to make sure that we do that. And I'm optimistic, in the coming days, that we'll be able to find a solution and actually drive health care premiums down. That's what this is all about, driving health care premiums down.

BLITZER: On another sensitive issue. As you know, the president today unveiling his $1.1 trillion budget. It increases defense spending by $54 billion but slashes nonmilitary spending in many sensitive areas. Are you OK with the cuts, for example, to the State Department on foreign aid, cuts to Health and Human Services, programs like Meals on Wheels, other programs that assist low-income folks for obtaining heating assistance? These are recommendations by the president. Are you OK with his budget?

MEADOWS: You know, I want to applaud the president and Director Mulvaney for putting forth a bold budget. I mean he was elected on November eighth to actually come in and place some priorities and truly speak out.

Now, you know that I'm a big foreign policy guy. And as we look at some of the initiatives there, I want to make sure that we're strategically deploying assets in the current way. So, I'm right now looking at the DOD side of that and how they're going to work with USAID and State, because there's additional foreign aid in the Department of Defense budget.

And so, as we look at those, I think what you're going to see is this is the starting place. Ultimately, some of those things -- I've delivered meals for Meals on Wheels. You know, I think that those types of programs will stay in place. But it's a work in progress.

But, again, to criticize somebody for putting forth a bold vision and really talking about our veterans, our military and fulfilling a campaign process, you can't really criticize that. But I can tell you that as we come together, we're going to be looking at this in a real way to make sure that we put the assets and the appropriations in the proper place and only make strategic cuts.

BLITZER: And he says he doesn't want to cut Social Security. Said that during the campaign and this recommendation doesn't cut Social Security either.

All right, congressman, thanks, as usual, for joining us.

MEADOWS: Thank you, Wolf. It was good to be with you.

BLITZER: Thank you, Mark Meadows, of North Carolina.

Meanwhile, the House speaker, Paul Ryan, he'll be my guest. He'll be joining me later today, 5:00 p.m. Eastern, live in "The Situation Room" only here on CNN. That's coming up later today.

Also, President Trump defends his wiretapping claim and says his administration will be submitting new information to Congress for the investigation. We're going to ask a key member of the House Intelligence Committee about that.

And the House speaker, Paul Ryan, praises the president's, quote, "constructive role," with the Republican health care replacement plan. The replacement plan for Obamacare, one of the big promises from the campaign. How the speaker is guiding the president through the checks and balances of the federal government.

(COMMERCIAL BREAK)

[13:20:10] BLITZER: We're get something breaking news. New documents show President Trump's former national security adviser, Michael Flynn, received a payment from a Russian television station during a visit to Moscow back in 2015.

Our chief national security correspondent Jim Sciutto is with us right now.

You're getting new information on this very sensitive information. He, of course, was fired, but tell us what you've learned.

JIM SCIUTTO, CNN NATIONAL SECURITY CORRESPONDENT: That's right. This comes from the ranking Democrat on the House Oversight Committee, Elijah Cummings. We're told that retired Lieutenant General Michael Flynn, Donald Trump's former national security adviser, was paid more than $33,750 by Russia's state-run broadcaster, RT TV Russia, for a speech in Moscow in December 2015. This from the top Democratic, Representative Cummings, on the House Oversight Committee.

The U.S. intelligence community has long assessed that RT is a propaganda tool of the Kremlin, writing in its January report on Russian interference in the U.S. election, that the organization had participated in disinformation campaigns aimed at the U.S. Flynn had previously acknowledged the speaking engagement, telling multiple news outlets in July and August of last year that he received money for the speech in Moscow in December of 2015, but he declined to state the amount saying, and this is key, that the course of the funds was actually his U.S. speakers bureau, not the Russian broadcaster, which, as we mentioned, U.S. intelligence agencies describe as an instrument of the Russian government.

So, Wolf, a couple key issues here. One, as a legal matter, if General Flynn, and you remember he was the former director of the Defense Intelligence Agency. In light of that position and being a former military officer, one, has to report that he received income from any foreign entity and that it came from a foreign entity. What appears to be the case here is that in his public comments he has said, oh, no, I was paid by my speaker's bureau. But we now know, from these documents obtained by the House Oversight Committee, that in fact the money came from Russia. Russia's state TV broadcaster RT.

We asked General Flynn's spokesman for comment on this. It said that he reported the speech to the DIA. I asked specifically, did he report this money coming from Russia, from this Russian state broadcaster, and they had no comment. This will be a legal issue if he did not report that income on his security clearance form.

It also is an administration - administrate issue for the Army if he did not report this to the Army. Not a legal issue for them, not a violation of the law, but it would violate their guidelines for retired military officers. Those are open questions now. We are waiting for comment. And this is one thing that Elijah Cummings is seeking, he's saying, did you report this income? We don't have an answer to that question yet.

BLITZER: And this was when he went to Moscow and h was at that dinner with Putin, right?

SCIUTTO: Exactly.

BLITZER: He was sitting there - at the same table with Vladimir Putin. That's when he went there, gave a speech, and was part of this entourage, if you will, with the Russian president.

SCIUTTO: That's right, this was a banquet again hosted and organized by RT, Russia Today, this Russian broadcaster. And you've seen this picture. I'm sure many of our viewers have seen this picture that we're showing right now, sitting right next to the Russian president there. And, of course, this is relevant, not just in light of the payments and the reporting requirements for those payments, but, of course, this meeting happened as we now know Russia was beginning to interfere in the U.S. election process. And the view of the U.S. intelligence agencies is that the intention of Russian interference over time became helping Donald Trump win the election.

BLITZER: The question, though, that they're looking into, Congressman Elijah Cummings, among others right now, he obviously had security clearance, a former director of the Defense Intelligence Agency, a retired lieutenant general. But when you get a new job as national security adviser to the president, you have to update your security clearances, and part of the process is reporting income, especially income from foreign sources. So the question is, if he didn't report this income, would that have been a violation of that entire security clearance vetting process?

SCIUTTO: It would be a violation of the law if he did not report that income on what's known as the SF-86. This is your security clearance form. That would be a violation of the law. Separate from that would be a violation of military guidelines and administrative issue, not a legal issue for the military, for the Army, I should say, if he did not report that as well, this income from the foreign entity. So there are two issues there, an administrate one and a legal one, but both of them potentially significant.

BLITZER: Jim Sciutto doing some good reporting, as usual. Thanks very much.

SCIUTTO: Thank you.

BLITZER: I want to bring in someone in the House Intelligence Committee, Indiana Democratic Congressman Andre Carson.

Congressman, I want - I want to quickly get your reaction - and you're just learning about this as all of us are, all of our viewers are - to what we just heard Jim Sciutto reporting about the fired national security adviser, retired Lieutenant General Flynn. What's your reaction?

REP. ANDRE CARSON (D), INTELLIGENCE COMMITTEE: Well, I think this reaffirms what we thought before, that there was an inappropriate transaction taking place, or at least a transaction in which the general was not openly honest about. And I think in - with this regard, there are reporting requirements that he has to adhere to which clearly come into question.

[13:25:31] BLITZER: Let's move on and talk about the president of the United States. He had some very interesting - he says he has some very interesting items - his words - that will be coming to the forefront over the next two weeks to back up his assertion about wiretapping and President Obama launching wiretapping on Trump Tower in New York City. He says he's - he'd be submitting that new information. What do you know about this?

CARSON: Well, I think one thing about this president, he is certainly entertaining. He's a showman and he's consistent. He has been consistent. I think it's unfortunate now that this red herring, this distraction

technique has been taking the American people away from the issues at hand. That is, this administration's involvement with Russia, and that is perhaps the kind of agenda that hurts the American people. Under the Affordable Care Act, 20 million more Americans receive health care coverage. Unprecedented. Until this day, we have the most insured people that we've ever had in history. Under the Republican plan, the Republican health care proposal, over 24 million Americans stand to lose health care. And I think that Mr. Trump's assertions against President Obama are simply a red herring technique.

BLITZER: Well, let me just be precise and, you know, we heard from the former director of national intelligence, General Clapper, a couple weeks ago saying he hasn't seen any evidence to suggest that there was collaboration between the Trump campaign and Russia as far as the hacking operations on the Democratic Party are - have you seen any evidence at all, hard evidence, congressman, and you're a member of the Intelligence Committee, to make that assertion?

CARSON: I have not, which goes more deeply into why I'm concerned about President Trump's assertion. I think it's unfortunate. I think it's - I think it wreaks of paranoia. I think it wreaks of someone who is undisciplined. He could have gotten on the phone and called the acting director of our intelligence services. He could have called Director Comey to get confirmation, but he did not. He was impulsive. He tweeted this out. And I think that kind of manner, that kind of way, does not speak of someone who claims to be our commander in chief. And, unfortunately, it makes us the laughing stock to the entire world.

BLITZER: A quick question. You're - you know, you obviously get a lot of sensitive, classified information as a member of the House Intelligence Committee. In that Fox News interview last night, the president confirmed that the CIA had been hacked. He used the word hacked. And you heard Adam Schiff, the ranking member of the committee, saying, you know what, that's classified information. You're not supposed to talk about that. But the president did confirm that the CIA had been hacked. Presidents can declassify whatever they want. Did the president go too far in this specific case?

CARSON: I agree with Ranking Member Schiff. Absolutely. I think, again, it speaks to the kind of impulsivity and manner in which Mr. Trump is carrying on. I think that Mr. Trump has proven himself to be temperamental. And I think I would encourage him, as well as his advisers, to reel him back some. I think we live in a very hostile time, at least globally, where disclosing this kind of information jeopardize our national security and it jeopardizes the men and women who work tirelessly around the clock to keep Americans safer.

BLITZER: Let me get your reaction to these two federal judges who have now blocked the president's revised travel ban executive order. You've called it Muslim Ban 2.0. The White House says this is an issue of national security. Not having this ban makes the U.S. look weak. Is there any additional screening measure you would support? And what's your reaction to the latest judicial setback for the president on his travel ban? CARSON: There isn't any circumstance under which I would support

Muslim Ban 1 nor 2. I commend the judges and the courts for pushing back. And I think what this says, it speaks to the vision of our founding fathers who were, in fact, complicated, but set up three separate branches of government to act as a check and balance. And, of course, the press and media acting as the fourth estate. And so these kinds of actions are discriminatory, they're unconstitutional, they're unpatriotic and they're certainly un-American.

BLITZER: And, very quickly, you know, they point out the travel ban affects six Muslim majority countries, but most of the Muslim world, including the largest Muslim countries, are not impacted. Your reaction to that?

[13:30:02] CARSON: Well, I think in many ways, I think it undermines our effort. I think exacerbates the sentiment of Islamophobia. I think it - I think it - I think it fuels the flames of an anti-immigrant sentiment. I have to remind