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U.S. Ambassador Vows to Protest Russian Retaliation; Scaramucci Launches Vulgar Rant against Priebus; GOP Suffers ObamaCare Repeal Loss; McConnell: It's Time To Hear Ideas From Democrats; Warner: Kushner Raised More Questions Than Answers; Trump Tweets He's Named Gen. Kelly As New Chief Of Staff; Trump Announces Priebus Out As Chief Of Staff. Aired 4:30-5p ET

Aired July 28, 2017 - 16:30   ET




JIM SCIUTTO, CNN CHIEF U.S. SECURITY CORRESPONDENT: So that's really all they can do. But I think as you look at these diplomatic steps, that's one thing; in effect, it's the Russian response to what the U.S. did during the transition.

It's the other area that might be more consequential. If Russia was looking, for instance, being more cooperative in Ukraine, less aggressive, that kind of restraint, if you want to call it restraint, less likely now as relations continue to deteriorate.

JAKE TAPPER, CNN HOST: All right, Jim Sciutto, thank you so much. It's been a long week here in Washington. I can't believe it's only been a week. Let's dive right in with my panel.

And, Senator Santorum, I'm going to start with you even though we're going to be talking about the interview that my friend, Ryan Lizza, right to my left, just did.

What did you make of the interview that Anthony Scaramucci did?

You don't have to get into the language but if sentiments expressed about firing the whole White House communications department, his comments about Reince Priebus, his comments about Steve Bannon, his comments about digital fingerprints.

What did you think of it all?

RICK SANTORUM (R), FORMER U.S. PRESIDENTIAL CANDIDATE: Unhinged: it's just not exactly what the White House needs right now. It's not what this president needs. He's got some very serious things he's working on. He's trying to get a health care bill. He's trying to revive a health care bill. And he's got a tax bill he -- I mean, there's all sorts of things.

Obviously you got nuclear problems and you have this complete distraction out of left field of someone who does not improve the public perception of what's going on at the White House. TAPPER: And, Ryan, let me ask you, because an ethics group in Washington has written a letter to the inspector general of the Justice Department, asking him to investigate, quote, "inappropriate contact" between Anthony Scaramucci, the new White House communications director and the Department of Justice.

That is in response to what one of the many that Scaramucci told you that was notable and quotable.

This one, quote, "I've got digital fingerprints on everything they've done," meaning White House staff, "through the FBI and the bleeping" -- he didn't say bleeping -- "Department of Justice."

When he said this, obviously there is a lot of New York bravado in Mr. Scaramucci's comments.

But did you think it was legit when he said it?

RYAN LIZZA, CNN CORRESPONDENT: I frankly have my doubts, you know. It was a lot of just sort of bluster, I thought. And if you look very carefully, he told me that he'd already contacted the FBI but then when he tweeted right after the interview, he actually tweeted that he was going to contact the FBI.

So there is discrepancy there. So I really wonder if he did contact the FBI. He obviously said he did. And he repeatedly said that he believed that Reince Priebus committed felonies that needed to be investigated by the FBI. His evidence for that, frankly, was very, very thin.

But that was the first -- that was the -- after I got off the phone with him, that was then when it jumped out at me, was, my God, I've never heard a White House staffer tell a reporter that he's going to call the FBI over a turf war inside the White House.

So maybe it was bluster; maybe it's something more serious. It certainly seems like it's something worth asking some more questions about, especially when he was talking about digital fingerprints and the like. He made it sound like he was -- you know, he had the place wired or something to root out the leakers. Yes, that's --


TAPPER: Very bizarre.

Anita, you've worked in a White House where Rahm Emanuel was, I believe, and so you've heard some tough language, you've heard some salty language although I don't think --



LIZZA: I quoted Rahm dropping multiple F bombs many times.

DUNN: Oh, absolutely, yes.


TAPPER: But what did you make of this?

DUNN: I thought there were a couple of things that were just extraordinary about his interview, that -- Ryan's interview with Mr. Scaramucci, who, let us remember, has been in office now one week and quite an auspicious start it is.

The first thing is that he actually was calling the FBI about a document that is a public document. And he likes to cite his Harvard law background. Perhaps he missed the week on public disclosure.

But financial disclosure documents are public documents that senior people in the government have to file.

So the second thing that really struck me, though, was he was complaining to Ryan about leaks and he was, in essence, leaking that information to Ryan if he thinks he was off the record, which, Ryan, I'm on your side on this one.

But --

LIZZA: Well, no, he said he was definitely not off the record and I --

TAPPER: Halfway through the interview he says let's go off the record, right? I mean, so --

LIZZA: There was one small part of the interview, yes, that we did not --

DUNN: That you did.

TAPPER: But that means that suggests that everything else was on.


DUNN: But, Jake, he was leaking. He was leaking this information about Reince Priebus to you, Ryan, and complaining about leaks in the White House.

Now what does that tell you about the culture of this West Wing?


TAPPER: I don't know, it's bizarre.

The -- Senator, I also want to ask you about, just because you're friends with him, Senator, when he was in the Senate with you, Senator Sessions, a lot of Republican senators are truly emotionally upset about the public humiliation campaign that President Trump has been subjecting attorney general Sessions to, with some of them saying, look, just fire him or don't fire him but don't just keep doing this.

What do you think?


SANTORUM: Jeff Sessions has a lot of support. Jeff has been a conservative warrior, someone who has great relationships, not just in the Senate but in the entire conservative world. And I think you've seen that reflected in the pushback to the president.

I've talked to several senators, who have made personal calls to the president and said that this is just not going to go unnoticed, that this is a good man. You don't treat good people like that. You don't treat the man who came out and endorsed you first, took a big risk to do that.

I talked to Jeff during that time. I was out of the race by then and he really -- he was stepping out.

TAPPER: Oh, he was -- I mean, he was all by himself.

SANTORUM: He was all by himself. No other conservative was touching Donald Trump and Jeff Sessions gave him legitimacy in the conservative community and then to turn around and treat him as callously, that's just not going over well with me or a whole lot of other conservatives.

TAPPER: And, Anita, I think this kind of treatment of Senator Sessions, attorney general Sessions, hurts President Trump's agenda because you have people like Lisa Murkowski, John McCain, Susan Collins and others who think, he's never going to do anything nice for me. Look how he treats his friends.

DUNN: Well, listen, he urged the House Republicans to pass a health care bill. He lobbied them personally. He brought them down to the White House. He celebrated after they passed it.

Then he went out and announced it was a mean bill.

Why would any Republican go out on a limb for this president?

But, Jake, something really interesting happened this week, I thought, with the Senate Republicans and with the congressional Republicans. They drew bright lines around Bob Mueller, around the attorney general and around the Russia sanctions bill, which passed overwhelmingly, it's like beyond veto-proof.

It's like -- and it seems as though they're sending a very strong message this week about places they don't think this White House should try to go.

TAPPER: And, Ryan, what are you picking up from your sources on the Hill?

Are you sensing like -- we've seen some people like Chuck Grassley and Dick Shelby, conservatives, who are basically Trump supporters, really getting upset.

Is it a new day?

LIZZA: And this is just from what -- the public reaction of some of the senators, which you really didn't have Republican senators criticizing Trump until -- in the way that they have until the Sessions attacks.

And I think -- I mean, Senator Santorum, you can correct me if I'm wrong -- but the moment that struck me in the last week is when Trump had all 52 senators over to the White House to have a rah-rah session, let's get this bill passed.

And then he leaves that meeting and goes into an interview with "The New York Times" and just mows down Jeff Sessions.

I would think if, I'm a Republican senator leaving that White House and then opening up "The Times" or looking at my phone, thinking, wow, I'm going to go to bat for this guy on that piece of legislation?

And that's how he treat his most loyal supporter?

TAPPER: They're worried about leaks but they maybe should be more worried about interviews.


TAPPER: The things that they're saying on the record to reporters.

Thanks, one and all. Appreciate your being here.

Congratulations on a great interview, really newsmaking.

Senator John McCain was that key no vote that drove Republicans' efforts to repeal and replace ObamaCare into a ditch.

So what's next?

Will both parties actually come together and work together?

Stay with us.





TAPPER: Welcome back.

Sticking with politics we have a new reality check for Republicans after seven years of vowing to repeal ObamaCare. Not even the bare bones, so-called a skinny repeal passed muster last night in the Senate. Republicans had their steadfast nos already ready; Senators Lisa Murkowski and Susan Collins, who have long expressed concerns about the process and about Medicaid cuts in previous bills and about the proposed ban on women using Medicaid to go to Planned Parenthood clinics.

But there was also a stunning thumbs-down By Senator John McCain. He had returned to Washington Tuesday after being diagnosed with very serious brain cancer. He voted to support furthering the debate.

But last night, worried that skinny repeal would not -- would not allow House and Senate Republicans to come together and write workable legislation but would rather -- would be quickly passed and signed into law, now Senate leader Mitch McConnell says he is ready to hear from Democrats.


SEN. MITCH MCCONNELL (R), MAJORITY LEADER: So it's time for our friends on the other side to tell us what they have in mind and we'll see how the American people feel about their ideas.


TAPPER: Let's talk to one of those Democrats with us, Senator Ron Wyden of Oregon joins me. He's Ranking Member of the Senate Finance Committee.

So, first of all, let me ask you about something President Trump just said today. Here he is, a few hours ago in New York, talking about his plans for health care.


DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: They should have approved health care last night but you can't have everything. Boy, oh, boy. You know, I said from the beginning, let ObamaCare implode and then do it. I turned out to be right. Let ObamaCare implode.


TAPPER: What does it actually mean to let ObamaCare implode?

SEN. RON WYDEN (D-ORE.), RANKING MEMBER, SENATE FINANCE COMMITTEE: It means that millions of people could suffer in order to get a political advantage.

And to me, the events of the last couple of days have a clear message and that is there has to be a new accountability from both political parties to produce real results.

That means policies that hold down our premiums; it means policies that increase wages for working class Americans; it means getting the roads fixed. I think both political parties this evening face a new accountability to get real results on those bread-and-butter issues.

TAPPER: So McConnell called for Democrats to reach out and share their ideas. You are somebody who has actually worked with Republicans on health care reform in the past.

Let me ask you, what are Democrats willing to compromise on when it comes to health care reform?

I know what the sacred cows are. You don't want Medicaid cuts, et cetera.

But what are some things where might be some give?

WYDEN: Well, certainly we have supported the ideas in the Affordable Care Act that the states have flexibility, flexibility to do better, not to do worse.

[16:45:00] So certainly we're going to be talking about that issue. But it seems to me the first step that we ought to be taking is working together to stabilize the private insurance market. In effect, the Trump administration over the last few months has been pouring gasoline on the fires of uncertainty in that marketplace, and we've got insurers who are about to sign up for 2018 premiums. They're going to due at the end of August. We have got to find ways for Democrats and Republicans to move quickly to stabilize the private market.

JAKE TAPPER, CNN HOST: I want to turn to the Russia investigation because you're obviously on the Senate Intelligence Committee. Yesterday, Ranking Committee Member Mark Warner reiterated that he has even more questions after the staff of the Committee spoke to Jared Kushner this week. Without mentioning any specifics, obviously, we don't want to get into anything you can't share with us, is there something striking from the interview, anything that raises more questions?

WYDEN: Senator Warner is right to say there are a lot of key questions ahead. For example, in his public statement, Mr. Kushner said that he didn't rely on the Russians to finance his business. Now, I'm telling you, Jake, that's some awful careful lawyering to put together a phrase like that, because "rely" is subjective. Mr. Kushner didn't say that he has had no business investments with Russia. He didn't say he has no dealings with Russia. He said he didn't rely on it. So there was a lot of clever lawyering, and it seems to me the combination of Jared Kushner's public statement and the fact that the President has said several times that Mr. Mueller has no franchise in order to look at his finances indicates to me today that the Trump family is very concerned about the follow the money issues. That's what I zeroed in on.

TAPPER: And one of the things that Senator Warner, with whom you work on the Intelligence Committee, said on my show "STATE OF THE UNION" a few weeks ago was that the Trumps, whether it's the father, the President or Eric or Don Jr., they're always very careful when they talk about Russian investments. They talk about how they don't have any money in Russia, but they never talk about how Russians might not have money in Trump industries, Trump properties.

WYDEN: Let me give you another example. This is the first President who hasn't been willing to release his taxes in 40 years. I've introduced legislation to change that. If you had those taxes released, for example, you could find out some issues that may relate to borrowing money. That's why the public has got a right to have this estimation.

TAPPER: But what might this have to do with anything?

WYDEN: Well, certainly if you look at the fact that in 2008, the Trump family said much of our portfolio involves Russian investment.

TAPPER: Like Don Jr. said that.

WYDEN: Don Jr. said - that was a tough time to get money, and the President hasn't disclosed his taxes, and we're looking at a tax reform bill that might benefit the Trump family. We have got to get at those issues.

TAPPER: But would that have anything necessarily to do with the investigation into possible collusion, or is this just interesting and -

WYDEN: I'll just - I'll just tell you point blank, Don Jr.'s meeting, the one that took place in the summer of 2016, clearly was an attempt to collude. If you look at those e-mails, if you look at his own admissions, I don't think you can conclude otherwise.

TAPPER: All right, Senator Ron Wyden of Oregon, thank you so much. I appreciate your time, Sir.

WYDEN: Thanks for having me.

TAPPER: Racing for the worst as the death toll keeps rising. Families of U.S. Embassy employees being told to leave Venezuela as tensions rise ahead of a controversial vote. Stay with us.


[16:50:00] TAPPER: We have some breaking news for you as we watch Air Force One. It just landed at Joint Base Andrews in Maryland. We're waiting for President Trump to come out. He has just announced a major staff change in his White House, tweeting just seconds ago, I am pleased to inform you that I have just named General/Secretary John F. Kelly, that is the Secretary of Department of Homeland Security as White House Chief of Staff. He is a great American, dot, dot, dot. Presumably, more is coming in this announcement, but three minutes ago that is what he tweeted. We are waiting for more information about what this means. Obviously, Reince Priebus was, until three minutes ago as far as we knew, the White House Chief of Staff. Let us go to Sara Murray at the White House now who can tell us more on this breaking story. And Sara, so much is announced via tweet these days, one wonders what kind of preparation anybody inside the White House knew about this. What can you tell us?

SARA MURRAY, CNN WHITE HOUSE CORRESPONDENT: Well, look, we have been hearing from people last night as well as this morning that the President was not happy with his Chief of Staff, that he is being encouraged by people around him, including members of his family, who are his Senior Advisers, Jared Kushner and Ivanka Trump, that it was time to make a change. They didn't feel like Reince Priebus was up to the job of Chief of Staff. There were some close to the President who felt that Priebus wasn't carrying out the President's wishes, that he wasn't effective in calming the west wing chaos and power struggle, but that he also wasn't shepherding the President's agenda through Congress.

And obviously, he had the President suffered a health care defeat last night. That was just a part of what we're talking about here. Now, allies that are close to Priebus were insistent today that the Chief of Staff would be safe. They were insistent that Priebus would not be resigning. So it was pretty clear that if there was going to be a change, it was something the President was going to have to decide to do. He was going to actually fire his Chief of Staff. So far, at least on Twitter, we don't have a good indication of what happens next to Reince Priebus, obviously, we'll look for more details on that, Jake.

TAPPER: All right, Sara, thank you so much. Bring back us back more reporting when you get it. I'm joined now by David Chalian. David, first of all, happy American Heroes' Week. That's what - that was theme of this week according to the White House although the focus has been on almost everything but American heroes. And here we have this tweet at 4:50 on a Friday evening announcing that the Department of Homeland Security, Retired Marine General John Kelly, a very respected man in Washington D.C., that he is now the White House Chief of Staff.

[16:55:23] DAVID CHALIAN, CNN POLITICAL DIRECTOR: And remember, when the President was putting together his team during the transition, you remember his talk of how much he appreciated the generals, loved the generals and put together with McMaster came in afterward, and Mattis and Kelly. This was - this was sort of the core that was supposed to calm the waters of concerns among Republicans and other Washington establishment types. The question I have, Jake, last I checked, you can change Chiefs of Staff. The President is still the person who is in the Oval Office.

It is his impulses, it is his direction, it is his focus on things or decidedly distracted focus on things that have been setting the tone, his twitter feed. Is Secretary Kelly coming in as Chief of Staff going to stop tweets that royal the waters here in Washington? That's unclear to me. Obviously, we'll have a lot to learn how about how Priebus learned about this. Did he learn about this from this tweet that he is out of a job? But this one move alone does not seem likely to me to all of a sudden calm the waters into a fully functioning White House.

TAPPER: And let me just read because President Trump five minutes after the first part of the tweet which was, I'm pleased to inform you I've just named General/Secretary John F. Kelly as the White House Chief of Staff. He is a great American, dot, dot, dot. He now has tweeted the second part, and a Great Leader - capitalized for some reason - John has also done a spectacular job at Homeland Security. He's been a true star of my administration. David, Secretary Kelly, who we should remind people, is a very respective retired marine general serving as Homeland Security Secretary, was on Air Force One with President Trump as he flew to New York today for this speech.

These remarks he gave in front of a bunch of law enforcement officers, talking about the threat - the threat of the vile gang MS-13. It did not seem unusual for John Kelly, Secretary Kelly to be on that flight. Homeland Security obviously is focused on combatting gangs such as MS- 13 and stopping undocumented immigrants from coming into this country and joining gangs like MS-13. But it is certainly interesting timing given, as we know, how impulsive President Trump can be.

CHALIAN: And what we don't know is how John Kelly is going to come in and run this White House differently. Will he have the real latitude to do so? That remains unknown. You know who else was on Air Force I today was Reince Priebus -

TAPPER: Right.

CHALIAN: - the current Chief of Staff. So it's unclear just when he was informed about this, how he found out about this. This change is important. Donald Trump is clearly cleaning house. He understands what he was doing that thus far is not working. John Kelly, as you noted, is running a Department that actually is enacting some of the more successful areas of the Trump agenda.

TAPPER: Sure, the border crossings have lessened, and the wall, the first funding, was approved, I think.

CHALIAN: So he's looking to a place where some of his agenda is actually getting enacted and moving forward, and now bringing that person inside the west wing.

TAPPER: Jeff Zeleny is at the White House for us as well. And Jeff, people in the White House are learning about this via tweet, just as the rest of us are.

JEFF ZELENY, CNN, SENIOR WHITE HOUSE CORRESPONDENT: That's right Jake. I've been talking to a couple of senior administration officials and other staffers here you know since this news came out. And at least according to them, this is coming as a surprise to them as well. One of the best ways, of course, to keep it secret and to avoid leaks, and this did not leak, is to not tell anyone. And it appears that's what the President did. At least, not many people as he was flying back to Joint Base Andrews as we see Air Force I sitting right there. So this is coming as a major surprise to people here at the White House, Jake.

First and foremost, the people who are close to Reince Priebus had absolutely no idea this was happening. We've been talking to them throughout the day as we've been reporting that the President was being urged to have a change in the Chief of Staff Office and they insisted that he's not going anywhere. They insisted that Reince Priebus was going to stick this out, in fact, was going to weather the storm. Well, that is not how this is any up, Jake. And Reince Priebus has had a famous phrase that became a little bit rote over the past few months. He said, look, I have nine lives, whenever anyone asked him about his role as Chief of Staff.

Well, it appears that he used up I think most of those nine, Jake, perhaps even more than that. But his loyalists, people who came here to the White House from the Republican National Committee where he had been the Chairman for so many years, are finding this very shocking, in fact, in the words of one. So it will be interesting to see, Jake, how many more RNC staffers follow him out the door, Jake.

TAPPER: All right, Jeff Zeleny, thank you so much. A tumultuous day, President Trump in his first six months has gotten rid of his National Security Adviser, his Communications Director, His Press Secretary, and as of just a few minutes ago, his White House Chief of Staff. Wolf Blitzer is in "THE SITUATION ROOM." Thanks for watching, I'll you Sunday on "STATE OF THE UNION."