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THE LEAD WITH JAKE TAPPER

Trump Plans to ban Transgender People From Military; Trump Blasts Attorney General; Interview With South Dakota Senator John Thune; "Repeal-Only" Health Amendment Fails 45-55. Aired 4-4:30p ET

Aired July 26, 2017 - 16:00   ET

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


[16:00:00]

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

We begin today with breaking news in our politics lead.

Just minutes ago, the United States Senate started voting on the Republicans' latest effort to repeal and replace Obamacare.

The vote going on as we speak, however, is just to repeal, no replacement. And this measure does appear headed to failure, a measure the Congressional Budget Office has said just straight repeal would mean 32 million fewer Americans with health insurance, some of them willingly because they no longer be required to purchase insurance, which shift costs when they get sick to those of us poor suckers who do have insurance, and some of those who would not be insured because they would no longer have Medicaid, the government health care plan for disable and low-income individuals.

This big vote comes in the thick of plenty of other developing stories in the nation's capital today, including the public humiliation campaign directed at Attorney General Jeff Sessions by President Trump, the president slamming Sessions again today, this time for not firing the acting FBI director, Andrew McCabe.

McCabe only has his job as acting FBI director, of course, because the president fired former FBI Director James Comey.

Also today, on a key day in the Russian investigation, as the Senate Judiciary Committee investigates Russian interference in the U.S. election and four agents possibly involved, out of nowhere, President Trump tweeted that he is banning transgender Americans from serving in the U.S. military, an unusual move for many reasons, perhaps primarily because President Trump had previously reached out to the LGBT community, making it part of his campaign pitch.

It says on the White House Web site right now -- quote -- "President Trump continues to be respectful and supportive of LGBTQ rights, just as he was throughout the election."

This move, however, would not only ban all transgender Americans from joining the military -- quote -- "in any capacity," as the president tweeted. It would also, theoretically, force the removal of an estimated 4,000 transgender service members in the military and the reserves.

So, apparently, the White House sees nothing incongruent about saying the president is respectful of supportive of LGBTQ rights, while simultaneously banning these Americans from serving their country.

But we are going to begin today with the story breaking right now, health care on the Hill.

CNN's Phil Mattingly joins me now.

Phil, walk us through what's happening on the Senate floor now and what's going to happen to this measure of repeal only, no replacement.

PHIL MATTINGLY, CNN CORRESPONDENT: Yes, Jake, what's important about this amendment, which is part of the floor debate that is going on right now -- obviously, we know they cleared the path for this -- is this was critical to getting conservatives to join that motion to proceed yesterday, to even start debate, was the ability to vote on this repeal only bill.

It's important to note, this is something Republicans voted on in the last Congress. In fact, 48 of the current 52 Republican senators actually voted yes on this. Only one of the current Republican senator voted no.

That was Susan Collins. However, as it currently stands, this vote still ongoing, at least as we started this, there are at least five Republicans who have already voted no, Dean Heller of Nevada, Senator Rob Portman of Ohio, Susan Collins of Maine, several -- John McCain as well is in there.

What you're seeing right now -- also Shelley Moore Capito of West Virginia.

And, Jake, what you're seeing right now is what we saw when this was, if you recall just a week ago -- it was put up as a potential alternative that Senate Majority Leader Mitch McConnell would pursue as the repeal and replace option started to fall apart.

That fell apart as well because of what we're seeing right now. They don't have the votes on this. Members are very uncomfortable about voting for something that just repeals, doesn't have a replace element to this.

And you're seeing right now this is going to go down. Now, it was expected to go down. Senate leadership aides made very clear they knew it was going to go down, but they felt like this was something they had to do, put this vote up, show conservatives the votes aren't there, and then move forward from this point.

The big question now, of course, and it's been sitting out there since they moved to proceed to this debate yesterday, is, what's next? What is the endgame here? They don't frankly to have a firm answer yet, but we're in the midst of this process now and it will continue for both the next couple days and many, many hours and amendments ahead, Jake. TAPPER: There is talk of something called skinny repeal, which I

guess just lifts the requirement, the individual mandate that everybody has to have insurance.

Is that -- I don't know if that's an accurate name for it, even though that's what people are calling it. Does that have a possibility of passing?

MATTINGLY: Yes, pay very close attention to it. That's the shorthand, skinny repeal.

What it would do is, it would repeal the individual and employer mandates and repeal the medical device tax that comes from the Affordable Care Act. What does it not do? Well, pretty much everything else Republicans promised year after year after year since this bill was passed into law by President Obama.

Here is the reason why they're thinking about doing and why there is a very real possibility this is what they coalesce around. It moves the process forward. What we're about to see over the course of the 60 or 72 hours or so is hundred of amendments likely, all of which are likely to fail.

You're seeing right now, when they put repeal and replace up last night, that failed. When they put repeal only just now, that is going to fail. Any other full repeal and replace plan, they don't think they have 50 votes for.

[16:05:00]

They will vote on this pared-back -- at least as it currently stands -- they're trying to figure out a way to vote on this pared-back plan. The strategy being the Senate passes this and then it moves into conference with the House.

That's where leaders are telling their members right now, this is where we will fix everything. This is where we will solve the problems. This is where we will finally make the tough decisions that at least up until this point, Jake, they haven't been able to find answers to.

It's a risky play, no question about it. But it is definitely something leaders are kind of holding out right there now is, if we can't find a repeal and replace option, if we can't find some way to get members to coalesce behind anything else, that's what we will do, with the key point being just move the process forward, keep things going, hope the momentum can carry them at some point to a repeal and replace plan that at least 50 senators can agree on.

TAPPER: Phil Mattingly on Capitol Hill for us, thank you so much.

Joining me now is Republican Senator John Thune of South Dakota. He's chairman of the Republican Senate Conference.

Senator, thanks so much for joining us.

The effort to pass repeal only seems doomed to fail. What happened?

SEN. JOHN THUNE (R), SOUTH DAKOTA: Well, right, Jake.

I think we knew this was going to happen. We had a lot of our members who wanted to have this vote, and we had a number of our members who had indicated early on they probably wouldn't support it.

But this is part of a process which is wide open to amendment, and one thing you have to say is there is nothing preordained about what the outcome might be there. This is an open process. Amendments are being offered. This is the latest one. It was defeated, and so now we will see where the amendment process takes us as we head toward a final vote hopefully some time tomorrow night or Friday morning.

TAPPER: Republicans have had seven years obviously to come up with a repeal and replacement plan. I'm assuming this is not how you envisioned this happening?

THUNE: Well, surely it would be nice if you had a much larger majority to work with. We have a very narrow margin, of course.

But also our members recognized that we have to doing something. We have got a failed system today. We have skyrocketing premiums and collapsing markets and Obamacare is in a death spiral. It needs to be rescued.

We just haven't been able to get 50 votes around one single solution yet. That's a work in progress. And as your reporter Phil mentioned, we are obviously moving toward what we hope, at least, will be something that we can get 50 votes on at the end of this process. And it will include components of some of the things that have been considered so far.

TAPPER: And I want to get to that in a second, but first let me just ask you preemptively, because next time you go back home to South Dakota, someone is going to say, Senator, you voted to take away health insurance from tens of millions of voters by voting for repeal only without a replacement. How do you justify that?

THUNE: Well, we had the repeal and replace vote last night, as you know.

This again was a vote to repeal, but two years from now. Basically, there was a transitional period where we could put the replace into -- implement something that would stand as a substitute for what we have today. It's not -- this, although it's a repeal bill, repeal isn't effective until two years from now.

There wasn't anything that would change in the near term, but it does put on a path two years from now where Obamacare would gone. In that subsequent time period, obviously, we would have to replace it with something we think would be better.

But, again, this isn't the ideal way to do it. I thought the best plan we had was the vote we had last night, which was a repeal and replace, which included a lot of ideas from many of our members through the past several months we worked to put together.

TAPPER: People like you and I who don't have to worry about our health insurance, that's fine, but there are lots of people out there who do worry about their health insurance. And to be told a number of senators just voted to take away their health insurance without any sort of replacement there, even if it's two years into the future, that might be unnerving to a lot of them.

These are people who live -- look, they are your constituents in South Dakota. They live paycheck to paycheck. And they worry about their health insurance.

THUNE: And that's why there was the two years.

I think two years is a good amount of runway in order for us to come up with that replacement. I don't think anybody thought is suggesting at all that Obamacare would go away two years from now without a replacement having been put into place.

I think people, if that was a concern, shouldn't worry about that, and stay calm. We're moving forward. Obviously, it's a process that's been challenging and difficult in the Senate, as it was in the House, because this is a very significant and consequential issue that affects people in a very personal way.

We want to make sure that we get it right, but we know something has to be done. We can't continue in the status quo. The status quo is simply unsustainable.

TAPPER: Let's talk about the measure that Republicans are calling skinny repeal, because it would be a relatively brief amendment. It would get rid of both the employer and the individual mandate and also get rid of the medical device tax.

Wouldn't that measure, if it were signed into law, hurt insurance markets and cause premiums for those who have insurance to go up, because, obviously, it would mean people being removed from the insurance pool?

[16:10:02]

THUNE: Well, what you would have, the original mandate is, I think, the thing that people find most objectionable about Obamacare.

And that is that they have to buy a product they in many cases they don't want and can't afford. So, repealing the individual mandate is something on which I think there is pretty broad agreement. There might even be some Democrat support for that before this is all said and done.

And, obviously, as we can get this into conference with the House, it will take a look at other provisions and measures that have passed the House already that have been considered in the Senate where we can put in place an alternative, a refundable tax credit that would help people in the individual marketplace who either aren't eligible for Medicaid and can't afford to get it in the individual marketplace on their own.

That is was in our bill that we voted on last night. And, unfortunately, it failed, but we're not going to give up on that. We want to make sure that we have not only repeal what is not working, but put in place something that hopefully will work in a lot better way.

TAPPER: But the skinny repeal would also take away the employer mandate also, which means that individuals in businesses of a certain size have to provide health insurance.

It's not just the individuals who can't afford it, necessarily, being forced to. It's saying to employers they don't have to provide it.

THUNE: Right.

And that's been probably again both very controversial features of Obamacare, and the employer mandate has been really problematic in terms of the employment market.

There are a lot of folks who aren't getting hired today because of requirements that are imposed on them by the employer mandate, or I should say imposed on employers. And so we think those are both features that it's pretty much agreed upon need to go away.

And I think there are -- I hope there are, at least, at the end of this 50 votes for that in the Senate, maybe more. Again, I think there are Democrats who could be persuaded to look favorably on getting rid of both those mandates, because both have been so controversial and so disliked, not only by the insured, people out there who are being forced to buy insurance, but also people who are in the employer market and a lot of the workers out there who have had a hard time getting jobs or have to get second jobs because of the requirements imposed by the employer mandate.

TAPPER: I'm old enough to remember when the original mandate was introduced during the Clinton years. It was a Republican idea.

It was first introduced by the Heritage Foundation, and the idea behind it was that people who, like me, who pay for health insurance, we shouldn't have to subsidize people who can afford health insurance, but don't pay it.

They, ultimately, if they get sick, they're freeloaders. They end up going into the system, and people who are responsible end up paying for them.

When did the Republican Party decide that that was a bad idea?

THUNE: Well, I don't know that it was ever -- it was something that Republicans opposed when it was part of a Obamacare when Obamacare passed.

TAPPER: Yes, I'm talking about Clintoncare back in the day.

THUNE: It may have been back in some earlier iteration of this that it had some support.

But I think that most people have seen now that it doesn't work. Obviously, the numbers, the enrollment numbers that they were expecting didn't happen. There were a lot of people who chose to pay the penalty in terms -- I think it's about $5 billion in taxes that were paid just last year by people who decided to pay the employee -- or the individual mandate instead of buying insurance.

And so I think Republicans generally, and I would agree that -- I would say, too, that some independents and quite a number of Democrats believe that the original mandate is something that ought to go away, because, one, it hasn't worked, and, two, you are forcing people to buy a product that they really don't want and in some cases can't afford.

And so I think, in terms of the logic behind it, however it originated, the current thinking on it now is that it hasn't been effective, hasn't worked and it's something that requires people to do something they don't want to do.

TAPPER: Just so you, the amendment repeal with no replace just failed 45-55.

Senate John Thune, Republican of South Dakota, always good to see you, sir. Thank you so much. Appreciate it.

THUNE: Thanks, Jake. You bet. Yes.

TAPPER: Let's bring in CNN's Ryan Nobles now. He's on Capitol Hill for us.

Ryan, a lot of Republicans, relatively, voted no. Who were they and what do their votes mean for the debate going forward?

RYAN NOBLES, CNN CORRESPONDENT: Yes, Jake, were not too surprised that this bill, the straight repeal, was going to go down today.

That was our sense, that it didn't have enough Republican votes, but we were very interested in just which Republicans would vote no. There were seven Republicans that could vote support the straight repeal, among them, Shelley Moore Capito of West Virginia, Susan Collins of Maine, Dean Heller of Nevada.

Here's one of the surprises, John McCain of Arizona, Rob Portman of Ohio. We weren't sure which way he was going to vote. Lamar Alexander of Tennessee, that was a bit of a surprise. And Lisa Murkowski of Alaska.

Some of these folks have been entrenched in the moderate camp. They have been very much opposed to a repeal only bill from the very beginning. But what is interesting, Jake, is that the vast majority of these senators, in fact, six of the seven, had the opportunity to vote for almost this exact same bill back in 2015, and they all voted in the affirmative.

[16:15:03] Now, that was, of course, back when Republicans had control of the Senate, but Barack Obama was in office and was going to veto any measure that would repeal Obamacare. Now that they have the powerbase in the Republican base in the White House, their perspective on this has changed quite a bit.

And the other point I would make -- Susan Collins, the only one of that group who was consistent with her vote in 2015 and now here in 2017. The another thing I'd point out here, Jake, is this also demonstrates to us how just tight the margins are for Senate Republicans as they push forward to this what we've been calling the skinny repeal. There's no appetite for strength repeal.

The idea that you're going to have to pull back five of these senators who are uncomfortable with a straight repeal into basically a slightly different version of only repeal without any form of replacement seems to be a very tall order for Senate Majority Leader Mitch McConnell. But that's exactly what they've been doing, that's what they're pushing ahead toward. They're hoping they can strip this bill down. Start from scratch, at least get it to conference with the House and then come up with something that can be palatable to everyone.

But, as you know, Jake, and as what we've been talking about for the past several weeks, this has been a difficult process from the beginning and today, it demonstrates once again that difficulty continues.

JAKE TAPPER, CNN HOST: That's right. Winning power is easy, governing harder.

Ryan Nobles, thank you so much.

Let's bring in our political panel. Thanks, everyone, for joining me.

Mary Katharine, let me start with you. So, right now, we know that the Senate controlled by Republicans, 52 Republican senators, voted against repeal and replace with the Senate bill.

MARY KATHARINE HAM, CNN POLITICAL COMMENTATOR: Right.

TAPPER: They just voted against just straight repeal, and as Ryan Nobles points out, six U.S. senators who previously voted for repeal only, Heller, Portman, Capito, Murkowski, Alexander and McCain voted no today. Would it have actually had a chance of becoming law?

HAM: Right. It's almost as if they didn't mean it before. We've gone a long way here from repeal to what came out of the House, which was not a repeal. But what was sort -- but an attempt at course correction for some of these really big problems in the individual market, which I have been in pre-Obamacare and post, and it's a big deal. Then, yes, water down a bit, was less of a course correction or less of a change in the Senate.

And now, we're going to get probably skinny repeal, which is just a few sort of piecemeal parts of some of the things they thought about doing over the years. And, ultimately, I'm not sure what that does to the individual market into these problems. There is a chance that some of those measures in a skinny repeal could marginally improve things, but that was sort of my hope for what came out of the House and what came out of the Senate, and now, you're cutting it down even more.

So, I'm not exactly sure what we're looking at here. There are some things like HSA flexibility and the removal of the individual mandate that would help people in some ways, but I don't know how this whole thing looks together, because when you construct this giant Jenga towers and then have to change them, it gets very complicated.

TAPPER: I want to talk about skinny repeal in a second, but, Susan, let's just take a step back and look at the political consequences again. Here you have the Republican Senate defeating repeal and replace and then just now defeating straight repeal.

What do you think the big picture political consequences of that?

SUSAN PAGE, WASHINGTON BUREAU CHIEF, USA TODAY: Well, you know, they'd only run on this issue in four consecutive elections and done really will in winning back the House and the Senate and White House by writing it. So I think the political consequences are serious. I think base supporters, the people for whom this was an important issue, and something they believed Republicans would deliver on, I think this is the kind of result that makes it look like just the stuff in Washington that drives people crazy.

And you need to have -- so, if you look at the next election, the fifth election in which health care is going to be a crucial issue, you could see some of those voters saying, why do I bother to go out and vote for people who won't deliver on the things that were important to me and that I voted them into power to do?

TAPPER: And I suspect from conservatives, we're going to hear a lot about these six Republicans again, Heller, Portman, Capito, Murkowski, Alexander and Senator John McCain, all of who previously voted for repeal only when Obama was in the White House and they knew he wouldn't sign it, and then today voted against it.

RYAN LIZZA, CNN POLITICAL COMMENTATOR: Yes. When the reality of what the law actually would do hit them, and they talked to their constituents and saw what the bill is pulling -- I mean, frankly, they did the responsible thing and said, no, I can't support this because I don't actually agree, back in 2015, it was a free vote. I guess they could argue that, well, I wanted to let everyone know I was against Obamacare, I knew this wouldn't go into law. You know, that's the best defense you can come up with on a flip-flop like this.

But when they actually had a Republican president with a pen, they are being slightly more responsible in saying no, this is bad.

I think what's interesting now, you get a sense of what McConnell is doing here, right, with these two votes now, right? So, this compromise that he spent weeks crafting last night went down and then the full repeal just went down now. And if you look at the votes on the two, you have 13 Republicans that have voted no on one of those or the other. [16:20:00] And you kind of see between those two polls now, he's got a

sense if where his caucus is and whether there's anything in-between those two that he can now get through. But I mean, the thing that jumps out at me, there are three Republicans who voted -- there are only three Republicans who voted for both, and that is Collins, Heller and Murkowski.

PAGE: They voted against both.

TAPPER: Against both.

LIZZA: Both they voted against. The one last night and today.

TAPPER: Repeal and replace and straight repeal.

LIZZA: So, they are the key.

TAPPER: Yes, because they can't lose more than two.

LIZZA: Yes.

TAPPER: They can't lose more than two.

HAM: I was just going to point out that even though repeal, full repeal, allegedly, doesn't repeal a bunch of stuff, because which I think --

(CROSSTALK)

HAM: It keeps a lot of -- which doesn't get to the problem of bringing down premiums in all those regulations remain in place, but it is an illustration of how complicated this always was going to be and how people were fooling themselves and fooling voters, pretending as if it weren't going to be complicated, because in order to get through in reconciliation, you can't take away some --

TAPPER: These are the special Senate rules where you can only do things that have to do with budgetary matters.

PAGE: You know, I would say it's very hard to imagine this next vote succeeding on skinny repeal. But it's not impossible. And we have all covered stories where those last couple of votes, a president, a majority leader manages to pull people over the line with the argument that it's just too damaging to vote against it. That's not impossible.

But I do think that this -- on a separate and unrelated story which is action that President Trump is taking against his own secretary -- his own attorney general, a former senator, someone very familiar to this crowd, is hurting him in an effort to get those final votes to walk the plank on his behalf.

TAPPER: How so? Why is it hurting him?

PAGE: Because Jeff Sessions was the first senator to endorse him at a time that was not a popular thing to do, and they're seeing, these senators are seeing Donald Trump not repay that loyalty to their former colleague.

TAPPER: That's interesting.

LIZZA: I agree with that. I mean, look, the other day, he had that meeting with all the senators there talk about health care, right, and to demand loyalty to his agenda. What does he do, he leaves that meeting, goes into an interview with the "New York Times" and just mows down Jeff Sessions, a former senator. I agree with Susan, there's no -- if you're Lisa Murkowski, what you're watching this week from the White House is not giving you any reason --

TAPPER: In fact, let's put up this tweet from there. The president tweeted a criticism for Alaska Senator Murkowski today. She voted no on the motion to proceed yesterday.

Senator Lisa Murkowski of the great state of Alaska really let the Republicans and our country down yesterday. Too bad.

Of course, he also berated in a way Dean Heller, the senator from Nevada, during that lunch meeting.

LIZZA: And one of his -- remember, his political action committee, his outside group, ran ads against Heller in Nevada, that was something that seemed to have backfired. But Murkowski, Heller and Collins, they are the key to this, right? You can't get -- they voted no on both versions now. If you can't get -- you know, flip one of those, you don't have a chance. I mean, that's just the first thing he needs to do.

HAM: I think it's true. They don't know where they stand with the White House and there are good arguments to be made, and I think Senator (INAUDIBLE) made some of them about the individual mandate and the employer mandate. Having been unpopular with Democrats in the past as well, and you can make the argument CBO (INAUDIBLE) almost by 50 percent in its estimate of how that would work.

So, you can make those arguments, but is the president going to come out and undercut you shortly after? And another question, one, if they do a skinny repeal, it goes to conference. And we just do this again and try to come up with a --

TAPPER: Right. Well, that's the thing.

HAM: I like the idea that we are moving forward in a process, and I like John McCain's sort of celebration of muddling through, which is what democracy looks like a lot of times. But this is going to get ugly again in Congress (ph).

TAPPER: But, if I can point out, you're in the individual marketplace and you have to deal with rising premiums because of all the requirements for all these plans, these essential health benefits, I think that there are a lot of people out there doing the math on if you take away the employer mandate and you take away the individual mandate.

HAM: Right. TAPPER: And that means fewer people in your insurance board, what

does that mean for your premiums?

HAM: Yes. I mean -- and that is an open question, that idea that -- the two ideas they have are to have a surcharge before you jump back in so you can't be a free rider jumping in with no insurance, only when you get sick or a six-month lock out period in how those would test, but we don't know that from the CBO yet. We just don't know how that would play out. But it's possible that those could stand --

TAPPER: How could you know it from the CBO? Nothing has been written down. There's no bill.

HAM: But you could -- that's what I'm saying. We don't know. But you -- there is a possibility that those could stand in for this pretty ineffective individual mandate.

LIZZA: One wild card is everyone -- every senator I'm understanding the rule is every senator is going to be able to offer an amendment. Is there some Democratic amendment that has some bipartisan support that is just a fix of the individual market, right? Does that get -- is there any events that has --

TAPPER: Yes, I sense a lot of Democrats kind of just sitting back and enjoying the show, but -- anyway, Susan, and Ryan, Mary Katharine, thanks so much, one and all. I appreciate your being here.

As the GOP effort to repeal Obamacare fails, the president is stepping up his attacks on the attorney general, as we just noted, even as fellow Republicans are defending Jeff Sessions. That story next.

(COMMERCIAL BREAK)

[16:28:53] TAPPER: Welcome back to THE LEAD.

We're going to stick with politics. President Trump again today taking on and trolling his attorney general in tweets, even as Mr. Jeff Sessions was actually at the White House today.

Athena Jones is also at the White House with the latest on this very odd feud.

(BEGIN VIDEOTAPE)

JEFF SESSIONS, ATTORNEY GENERAL: Make America great again.

ATHENA JONES, CNN WHITE HOUSE CORRESPONDENT (voice-over): It's the latest salvo in a one-sided firefight between President Trump and one of his earliest supporters, the president taking aim once again at Attorney General Jeff Sessions on Twitter, writing, why didn't A.G. Sessions replace acting FBI Director Andrew McCabe, a Comey friend who was in charge of the Clinton investigation but got big dollars for his wife's political run from Hillary Clinton and her representatives. Drain the swamp!

Just a few months ago, Trump interviewed McCabe to replace FBI Director James Comey who Trump fired. Now, the president is slamming Sessions for not getting rid of McCabe.

The president's latest slight coming while the attorney general was at the White House for what a Justice Department source says was a routine meeting. Sessions did not meet or speak with the president while here.

SARAH HUCKABEE SANDERS, WHITE HOUSE PRESS SECRETARY: I think the president has been very clear about where he is.