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THE SITUATION ROOM

Interview With White House Director of Legislative Affairs Marc Short; Interview With Congressman Ruben Gallego; Terror in Britain; Administration Preparing for War With North Korea?; Trump: Options on North Korea are "Effective and Overwhelming"; Jose Strengthens to Hurricane, Threatens U.S. Northeast; Trump Agenda Stalled Despite GOP Control of Congress; Backlash Over Trump's Tweet Following London Attack. Aired 6-7p ET

Aired September 15, 2017 - 18:00   ET

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


[18:00:03]

WOLF BLITZER, HOST: Pure speculation. President Trump responds to the terror in London, suggesting the culprits were in the sights of Scotland Yard. The British prime minister firing down, slapping back on Mr. Trump and his claims. Did he reveal any inside information?

More than a threat. North Korea's newest provocation proves that Kim Jong-un's missile could reach tens of thousands of Americans. There's new talk tonight at the highest level of the Trump administration about military options on the table.

And no way, Jose? As the U.S. recovers from two powerful storms, another hurricane is looming in the Atlantic right now. We're tracking Jose and its potential threat to millions of people in the Northeast.

We want to welcome our viewers in the United States and around the world. I'm Wolf Blitzer. You're in THE SITUATION ROOM.

ANNOUNCER: This is CNN breaking news.

BLITZER: Breaking news tonight, Britain is warning that a new terror attack may be imminent, as authorities urgently hunt down suspects in the bombing of the London subway.

Sources tell CNN that the improvised device that went off during this morning's rush hour had a timer. That's raising fears that more explosives may have been planted and could go off at any time. At least 29 people were injured in today's blast on a very busy commuter line.

The United States responding by beefing up subway security. New York City's transit system is deploying additional officers, heavy weapons teams and bomb-sniffing dogs. President Trump is promising to work with Britain to fight terror, but Prime Minister Theresa May is fuming at Mr. Trump after he suggested the people behind the bombing were "in the sights of Scotland Yard."

May is dismissing that as pure speculation that isn't helpful during an active investigation.

Also breaking, President Trump says U.S. options for dealing with North Korea are effective and overwhelming after Kim Jong-un's newest missile launch. Top Trump officials stressing that a military response is a possibility.

For now, the administration insists U.N. sanctions are strangling and isolating Kim Jong-un's regime. But Kim is more defiant and dangerous than ever. The new launch over Japan proving the regime can fire a missile about 2,300 miles, putting the U.S. territory of Guam in its strike zone.

We're covering all that and much more this hour with our guests, including Congressman Ruben Gallego, a member of the Armed Services Committee. And our correspondents and specialists are also standing by.

First, let's go to our senior international correspondent, Matthew Chance in London.

Matthew, there's an urgent manhunt under way right now. What are you learning?

MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: That's right.

The British authorities are on their highest state of alert. You can see the police cordon just behind me here a short distance from the subway station where the bomb attack took place in the early hours this morning during the rush hour is still very much force.

And the British police, the police here in London say hundreds of extra officers have been put on the streets now to try to bring the individual or the individuals for that attack to justice.

(BEGIN VIDEOTAPE)

CHANCE (voice-over): Tonight, a massive manhunt is under way following a rush hour bomb blast on a packed London underground train.

SALLY FOLDING, WITNESS: The doors opened, so I shot out, as did everybody else. It was pandemonium on the train platform. People were falling down, people were clearly injured, people were screaming, people were crying.

CHANCE: More than 20 people were injured in the attack that officials are calling a terrorist incident.

CHARLIE CRAVEN, WITNESS: The first thing I thought was, I texted my girlfriend and said, maybe there will be a second bomb or an attacker with a gun. And I thought (INAUDIBLE) to be honest.

CHANCE: Authorities say a timer was found on the device, which was a crude type of contraction known as a bucket bomb. It didn't fully detonate. And tonight CNN is learning that the device was intended to cause much greater harm and likely contained the highly explosive material TATP. PAUL CRUICKSHANK, CNN TERRORISM ANALYST: If this was TATP, that still

needs to be confirmed, but if it was TATP, if it had gone off, you could have seen dozens of casualties, perhaps very few people getting out of that train carriage alive.

CHANCE: London's police are looking for anyone who has photos or video of the incident, which took place at the Parsons Green tube station in Southwest London.

MARK ROWLEY, METROPOLITAN POLICE ACTING DEPUTY COMMISSION: Hundreds of detectives involved looking at CCTV, forensic work and speaking to witnesses.

CHANCE: Though this is the fifth terror attack in the United Kingdom this year, London's mayor says the public should feel secure that those involved will be caught.

SADIQ KHAN, MAYOR OF LONDON: I'm reassured that the police and security services are doing all they can to keep us safe. We recognize that one of the things the terrorists want to do is disrupt our way of life. And we're not going to allow them to disrupt our way of life.

(END VIDEOTAPE)

[18:05:10]

CHANCE: Well, the British authorities say they're making excellent progress in their investigation, but the details of that progress, they're not disclosing to us.

They say because of the nature of their investigation, there is a heavy covert element. So we're still waiting for news this evening on any suspects or any arrests that may be made.

BLITZER: And if you get it, let us know immediately. We will get it on the air. Thanks very much, Matthew Chance, in London.

As Britain braces for the possibility of a new attack, CNN terror analyst Paul Cruickshank is joining us. He's working his sources, trying to get some new information as well.

Paul, as you know, ISIS has now claimed involvement in this attack. What are you hearing from your sources?

CRUICKSHANK: That's right.

In fact, two statements from ISIS, one from its affiliated news agency, Aamaq, and one from ISIS proper, both claiming responsibility for this attack. One saying it was a detachment from the Islamic State that carried it out and another saying that there were soldiers of the caliphate that did this and planted what they said were multiple devices.

Now, no evidence that there were multiple devices that were planted. And ISIS really hasn't offered any evidence to back up its claim that it had a responsibility for this attack, Wolf.

But there is a massive manhunt going on right now in London in the U.K. for either one suspect or potentially multiple suspects that they might be looking at with relation to this attack. There is a high level of concern. We last saw the terror alert level going up to critical in the four days after the Manchester bombing, as you will recall back in May.

Well, right now, yet again, they fear that a bomb-maker is at large on the loose and that they could try or he could try and launch another attack. The fact that this was not, apparently, a suicide attack, but there was a timer involved suggested that the plan could have been to launch multiple strikes.

BLITZER: This is the fifth terror attack here in the U.K. this year alone, and the U.K. has now raised its threat level from severe to critical, the highest level, meaning another attack could be imminent. Do authorities significantly expect another attack any time soon?

CRUICKSHANK: Yes, I mean, they fear that is a real possibility.

The system really is blinking red in the U.K. There's been six thwarted plots since March. There are 23,000 people they consider a risk from a counterterrorism point of view, 3,000 of which are under active investigation by the security services, Wolf.

Terror arrests are up 70 percent this year. They have never seen since 9/11 a threat tempo like this. It's coming from all sorts of directions. And so there's real concern tonight that there could be another attack unless they can round up the people responsible for this one.

BLITZER: Paul Cruickshank joining us, thank you very much.

Now to the president's response to the terror in Britain. Just a little while ago, President Trump renewed his view that radical terrorism will be eradicated. Earlier, he tweeted about the subway attack, making claims that are not sitting well with the British prime minister.

Let's go to our White House correspondent, Athena Jones.

Athena, tonight, the Trump administration is dealing with multiple threats and controversies overseas and here at home.

ATHENA JONES, CNN WHITE HOUSE CORRESPONDENT: Hi, Wolf.

That's right. The president arrived just a few minutes ago at his golf club in nearby Bedminster, New Jersey. But before leaving Joint Base Andrews, he talked about this North Korea threat and he said America's military options are robust. He called them both effective and overwhelming, should they be needed to deal with any threats from Pyongyang.

He said America and our allies will never be intimidated and that North Korea has once again shown its utter contempt for its neighbors and the entire world community.

Earlier today, responding to that terror incident in London, the president talked about the need to get tougher when it comes to fighting terrorists. But he also sent out some tweets that irritated British officials.

(BEGIN VIDEOTAPE)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I want to say that our hearts and prayers go out to the people of London, who suffered a vicious terrorist attack.

JONES (voice-over): President Trump responding to today's terror attack on London's subway system.

TRUMP: Radical Islamic terrorism, it will be eradicated, believe me.

JONES: Those comments coming after a flurry of early morning tweets about the incident. "Another attack in London by a loser terrorist," Trump wrote, adding, "These are sick and demented people who are in the sights of Scotland Yard. Must be proactive."

[18:10:00]

The president's national security adviser, H.R. McMaster, later trying to explain what Trump meant by in the sights of Scotland Yard, the London police department headquarters.

H.R. MCMASTER, U.S. NATIONAL SECURITY ADVISER: I think what the president was communicating is that, obviously, all our law enforcement efforts are focused on the terrorist threat for years. He didn't mean anything beyond that.

JONES: The president's tweets prompted strong pushback from London police, who said they didn't yet know who was involved, and similar criticism from British Prime Minister Theresa May.

THERESA MAY, BRITISH PRIME MINISTER: I never think it is helpful for anybody to speculate on what is an ongoing investigation.

JONES: The president seizing on the incident to push his proposed travel ban, targeting nearly all refugees, as well as people from six Muslim majority countries, a ban that is facing several legal challenges.

Trump tweeting: "The travel ban into the United States should be far larger, tougher and more specific. But, stupidly, that would not be politically correct."

Asked to explain his tweet, he would only say:

TRUMP: We have to be tough. We have to be smarter.

JONES: The latest terror attack on an ally coming in the wake of yet another missile launch by North Korea, the second one to fly over another key ally, Japan, in less than a month,a problem international diplomatic pressure has so far been unable to solve.

Amid the escalating threat from North Korea, the president today visited Joint Base Andrews outside Washington, where he talked up the country's military might.

TRUMP: When our enemies hear the F-35 engines, when they're roaring overhead, their souls will tremble and they will know the day of reckoning has arrived.

JONES: Meanwhile, here at home, the president may be extending an olive branch to Democrats, signaling his willingness to make a deal to protect young people brought to the United States illegally as children.

TRUMP: We're looking at allowing people to stay here. We're working with everybody.

JONES: But the move is causing a stir among some conservative supporters of the president. White House Press Secretary Sarah Sanders making clear the president won't accept any deal without a strong border security component.

SARAH HUCKABEE SANDERS, WHITE HOUSE PRESS SECRETARY: He supports making an agreement on DACA, but that would have to include massive border security and interior enforcements. The president continues to push for those things. He's still 100 percent committed to the wall.

And we're going to be laying out what our specific priorities and principles are in that front over the next seven to 10 days.

(END VIDEOTAPE)

JONES: Now, this is an important an emotional issue and we will be watching closely just to see what the administration proposes when it comes to protecting these 800,000 or so young people.

But it's important to remember that the White House's proposal will be just that, a proposal. There's no guarantee that Congress will be able to pass a bill before the six-month deadline the president set runs out.

And it's not at all clear what the president will do if Congress fails -- Wolf.

BLITZER: All right, Athena, thank you, Athena Jones in New Jersey with the president for us. Thank you very much.

Let's get some more on the breaking news on the London subway bombing and the imminent threat of another attack.

We are joined by Congressman Ruben Gallego of Arizona. He's a Democrat on the Armed Services Committee.

Congressman, what is the placement of this bomb, the technology that was used to build it tell you about this attack and potential culprits? REP. RUBEN GALLEGO (D), ARIZONA: Well, in my experience, largely when

we were dealing with any type of bombings in Iraq, the fact that it wasn't a suicide bomber should tell us a lot.

Also, it kind of tells you about the nature of what is happening with ISIS. ISIS is losing the territorial boundaries that it used to claim under its big caliphate. So now, in order for it to have some relevance within the, you know, terrorist world, or at least those that are drawn towards terrorism, whether it is funding or to go fight, they are trying to export their method of battle and war through more terrorism, and less the actual holding of territory.

And the way to fight this obviously is going to be with greater integration of our intelligence systems, both American and British, as well as European in general. And a lot of this will continue to occur, because as ISIL starts losing territory, they're going to start losing a lot of the support that they're getting vis-a-vis different parts of the world.

So they're going to increase, unfortunately, their terrorism in order to try to stay relevant. And that's why it actually is more -- even more important that somebody like our president needs to stay calm, as the Brits would say, keep a stiff upper lip and work with our allies and not be so quick to jump the gun without talking to our allies, whether it's Britain or anybody else, when these types of terrorist attacks happen.

BLITZER: The terrorist or terrorists in this particular case used a timer. They were not suicide bombers. Are you worried about similar attacks being carried out against, for example, American train or subway systems?

[18:15:01]

GALLEGO: Well, we always have to be worried.

And, you know, we as a country have been very lucky in that sense that we haven't had as many terrorist incidents. But, of course, when using timers and depending on what kind of det cord that was used, you don't know the sophistication that was involved in putting this together.

And I don't know anything more than anybody else right now. For example, what you saw in the Boston was a crock pot, some explosives and a timer. And that was fairly easy to get and hard to track.

Until we have further information about what was in London, it's going to be hard for us to determine the level of threat that we will be seeing here in this country.

But, of course, the way to combat that, especially here in this country, is to closely again work with our FBI, intelligence services, as well as also work with the Muslim community. It's important to know that most of the times, whenever we have been able to catch any would-be American terrorists, it has been the Muslim community that's actually come out and told us about these potential threats. And the more the president tries to malign that community, the harder

it is for us to get cooperation. So, again, I urge the president to actually act presidential. Don't jump the gun. Work with our allies. And keep calm and carry on, as the Brits would say also. Act like a president and execute like a president.

BLITZER: Shortly after the attack, very early this morning, President Trump tweeted this: "Another attack in London by a loser terrorist. These are sick and demented people who were in the sights of Scotland Yard. Must be proactive."

The British prime minister, Theresa May, said the tweet wasn't helpful. Was the president, Congressman, out of line for speculating on the attack before getting all the facts?

GALLEGO: Well, certainly, the president was out of line.

And look, I think it's a little twisted the fact that the president jumped so quickly when it involves potentially a Muslim bomber, but was not so quick when it came to the Charlottesville driver. I think that tells you a lot about what the president is thinking, which is very disturbing to me.

But, more importantly, I suspect one of the reasons Prime Minister May be disturbed is because I don't know if the president actually revealed some type of intelligence that the prime minister did not want to be revealed.

Specifically, if they were tracking this person, you know, that person or that suspect now knows that they have to hide even harder than before or run faster.

So that's why it is important for the president to stay calm, talk to our allies, offer support and say that we're going to be there, which we will, with any of our allies and friends they get upon, to make sure that we will be in support from now until these people are caught.

BLITZER: Congressman Ruben Gallego of Arizona, thanks very much for joining us.

GALLEGO: Thank you.

BLITZER: Just ahead: Is President Trump giving up on his border wall? I will ask the White House director of legislative affairs about the president's new deal-making with Democrats.

And another hurricane threat to the United States, as Jose gains power in the Atlantic. Is the storm on a collision-course with millions of Americans in the Northeast?

(COMMERCIAL BREAK)

[18:22:55]

BLITZER: We are following multiple breaking stories, including the imminent threat of a new terror attack just hours after an improvised bomb exploded on a London subway train.

President Trump responding to this new attack, even as he faces new political controversy here at home. Many conservatives are furious at him right now for working with Democrats on a deal to allow young immigrants to remain in the United States, saying his promise to build a border wall would come later.

We are joined now by the White House director of legislative affairs, Marc Short.

Marc, thanks very much for coming in.

MARC SHORT, WHITE HOUSE DIRECTOR OF LEGISLATIVE AFFAIRS: Thanks for having me, Wolf.

BLITZER: So, you were at that dinner with Nancy Pelosi and Chuck Schumer. What is in this tentative deal?

SHORT: Well, Wolf, there was a great conversation.

It was very cordial. In fact, in many cases, it was jovial, but there's not a deal in place. There was the beginning of a conversation that says the president said, I'm sincere in wanting to resolve this problem.

He recognizes that it's a problem that Congress has not dealt with, frankly, for decades. And in all candor, even though we felt the Obama ruling in fact was unlawful, which is why it was overturned, Obama did that because he was frustrated Congress didn't act on it.

So the president is trying to pull the sides together to say, we need to solve this problem.

BLITZER: He wants those 800,000 to have a chance to remain in the United States, right?

SHORT: He feels that these are 800,000 people who came to the United States, no fault of their own, were productive and working in our society. He wants to find a solution for--

(CROSSTALK)

BLITZER: The Democrats say they want them to stay as well, and they're willing to have strengthened border security, which is what the president wants, but Pelosi and Schumer say, the deal, if there is a deal, would exclude funding for a border wall.

The president himself said that could come later. Is that part of this arrangement?

SHORT: Again, there's not an arrangement, Wolf.

There are several things I think the White House will be outlining some time in the next seven to 10 days of immigration reform that we think is important and is all part of this. Yes, is a physical barrier, it is something that we believe is essential to our nation's security.

And, in fact, in 2006, the Secure Fence Act of 2006 was passed 80-19 in Congress with Chuck Schumer's vote to build a wall.

BLITZER: But the Democrats say they want border security, they want tighter borders.

The only thing they say is, the U.S. taxpayers should not pay for a 2,000-mile wall, which could cost billions and billions of dollars.

[18:25:03]

SHORT: But they appropriated that wall in 2006 with Chuck Schumer's vote, too.

What we now need is for them to appropriate the dollars to build that wall. Also important -- and it's part of the border security -- is the interior enforcement to the United States.

In many cases, we have tens of thousands of people who have overstayed their visas who frankly become a security threat.

BLITZER: But is it a real wall you're talking about or a fence?

SHORT: I think that what the definition of a wall is something that we all need to have a serious conversation.

In some cases, it will be a Ballard fence, which is what in fact was appropriated last year, and we have begun construction--

(CROSSTALK)

BLITZER: Because in that tweet the president's tweeted yesterday, "The wall, which is already under construction in the form of new renovation of old and existing fences and walls, will continue to be built."

That's a far cry from there will be a wall and Mexico will pay for it.

SHORT: Well, Wolf, there's already, in fact, in many cases along the Rio Grande River levees that are built and in fact are higher in some cases than what the wall would be.

So, yes, it is a myriad of different structures along the wall that we expect to be secure to make sure that America is safe.

BLITZER: He promised the wall and Mexico will pay for it.

Will he deliver on that promise?

SHORT: The president is going to deliver on his promises.

BLITZER: How are you going to convince the Mexicans to pay for it? They say there's no way they're going to pay for it. The president of Mexico, he says that isn't happening. We all saw the transcript of that conversation he had the with president. SHORT: Wolf, I have doubted the president before and been proven

wrong. I suspect that he is going to make sure that that wall is built and that Mexico will pay for it.

BLITZER: If the president can't come to a deal on DACA allowing these 800,000 dreamers to stay in the United States, if he can't come to a deal, what happens to them after six months?

SHORT: We expect that we will have a deal sometime in the next six months, Wolf. I think you see right now there's much greater interest in making sure--

BLITZER: And if you don't get a deal, what happens to them?

SHORT: We are not going to talk hypothetical about what doesn't happen. We will get a deal in the next six months.

BLITZER: So you're pretty confident you can work with the Democrats? And you think you have the Republican leadership?

You clearly have the Democratic leadership on board. Will you have the Republican leadership on board, especially if it doesn't include funding for a wall?

SHORT: We have had many conversations with Republicans that we want to make sure that we're delivering on all those promises, interior enforcement, as well as border security.

BLITZER: You know, a lot of hard-line conservatives are pretty angry at the president right now.

Let me just read a couple of the headlines, Breitbart headlines. Trump caves on DACA, wants quick amnesty for 800,000 illegal aliens, calls him Amnesty Don.

Congressman Steve King of Iowa, "@realDonaldTrump, if AP is correct, Trump base is blown up, destroyed, irreparable and disillusioned beyond repair. No promise is credible."

Sean Hannity tweeted: "If reports true, 100 percent, I blame R's," Republicans. "They caused this. They wanted him to fail and now pushed him into the arms of political suicide, if true."

And Ann Coulter tweeted: "At this point, who doesn't want Trump impeached?"

You're smiling, but those are tough reactions from elements of the president's base.

SHORT: Sure.

But I think that there was a lot of overreaction to initial stories that proclaim there was a deal Wednesday night. What I think is now clear that there wasn't. There was an initial conversation to begin to bring people to the table. The president is sincere in making sure that our country is safe.

Nobody should doubt his commitment to that. It's not a matter of just the base. It's a matter of what is best for the American people. He's going to make sure that our country is safe. He's going to make sure there's physical security along that border wall.

He's going to ensure that there's also interior enforcement. We have had plenty of other conversations as well with Chuck Grassley's team, with Tom Cotton, with Mark Meadows and plenty of others who are interested in helping to be part of this discussion to find a solution.

This is our opportunity to come together and do what's right for the American people.

BLITZER: Assuming there will be a deal allowing these 800,000 dreamers over the next six months to stay here in the United States, will they be allowed to have not just legal status, but eventually years from now apply for citizenship?

SHORT: We are not at this point interested in entertaining citizenship, a pathway to citizenship. We are interested in making sure that those who have worked in our country are guaranteed the opportunity to continue to stay here and continue to work, because, again, there was no fault of their own, and to find a solution.

But I think that it is for the president to make the final determination of that negotiation. And that is not for me to decide. Right now, we're not entertaining a pathway to citizenship.

BLITZER: Because one of the deputy press secretaries at the White House said there would be legal citizenship way down the road.

SHORT: I think that that's where the president will decide at the time as we continue to have discussions about the right solution here.

BLITZER: Let's talk a little bit about health care. You think there's still a chance some legislation can pass between now and the end of this month that wouldn't necessarily repeal and replace, but would do what?

SHORT: There are several senators who have continued to work on this, including Senator Graham, Senator Cassidy, and Senator Heller and Senator Johnson, who have become together with a different approach, which is block-granting a lot of the dollars in Medicaid to the states to try to get out of that, the federal government to get out of that.

We believe that it is gaining momentum right now, and several more senators have agreed to come around and support it, as well as numerous governors.

So, yes, that window is closing on September 30. And Senate Republicans recognize that deadline. And so there is momentum gathering behind it right now.

[18:30:04] BLITZER: Because the window is closing between now and the end of the month. What, you only need 50 or 51 in the Senate, right?

SHORT: Right.

BLITZER: Afterwards you have to go up to 60.

SHORT: That's exactly right because of the reconciliation rules that allows you to pass it with 51 votes, as opposed to otherwise you would need 60 votes.

BLITZER: So the promise was repeal and replace. This is far short of repeal and replace, right?

SHORT: No, this would continue to repeal the mandate. It would repeal, as well--

BLITZER: It would change it, and you might say improve it, but it wouldn't repeal it.

SHORT: No, we believe it repeals it, Wolf. It's not something that we're looking to just change and tinker with. We want repeal of Obamacare.

BLITZER: Repeal means it's over with, the Affordable Care Act. What this would do is change the way the funding works.

SHORT: No. No, no, Medicaid was never going to be repealed. It still allows for Medicaid, but it helps makes Medicaid solvent.

The problem that we have right now is the current pathway we're on is that Medicaid will run out of dollars if we don't do something with it. So the president and those senators are looking to say, here's a different solution that allows the states more flexibility in how they manage these programs. That was always part of our repeal and replace bill initially, too.

BLITZER: This compromise that might emerge, the president would sign it into law, if it reached his desk?

SHORT: The president has already suggested his support for this approach.

BLITZER: He would go ahead, even though it's short of what he originally wanted, repeal and replace, just like renovating the wall is short of building a new wall.

SHORT: Wolf, there are people losing health insurance all across our country. The markets are collapsing. Even Democrats acknowledge that. Rates are skyrocketing. He wants to make sure that America is relieved from the disaster of Obamacare.

BLITZER: Is it fair to say he's softening his position in order to get deals?

SHORT: No, I think that he's trying to continuing to do what's best in the interests of the American people. BLITZER: He's got to compromise. That's the nature. You worked on

the Hill for a long time for Representative Mike Pence, now the vice president of the United States. To get deals, you've got to compromise.

SHORT: I think the president understands how to make a deal.

BLITZER: Excellent. Marc Short, thanks very much for coming in. You're always welcome to come in and continue this conversation. Appreciate it very much.

SHORT: Thanks for having me on. I appreciate it.

BLITZER: Marc Short is the White House director of legislative affairs.

Coming up, more on the breaking news on the threat of an imminent attack in Britain just hours after the London subway bombing. Did President Trump's response hurt the investigation?

And U.S. officials warn that time is running out to deal with North Korea after Kim Jong-un ups the ante by firing his longest-range missile yet.

(COMMERCIAL BREAK)

[18:36:59] BLITZER: We're following the breaking news. British officials now warning that another terror attack may be imminent following the subway bombing that injured at least 29 people in London. Today President Trump is responding by renewing his vow to eradicate terror. But his initial response on Twitter didn't necessarily sit all that well with the British leadership.

Let's dig deeper with our specialists and analysts. And I want to get to all of that in a moment, but your quick reaction, Ryan Lizza. Marc Short, the White House legislative affairs director, I thought he was pretty blunt in explaining where the president stands on these 800,000 DREAMers.

RYAN LIZZA, CNN POLITICAL ANALYST: Absolutely. He said he wants them to stay, which is not the opinion of some other people in the administration, so that's a clear indication that that's the White House's view on that right now. Jeff Sessions doesn't believe that.

And I thought he was very expansive in how he wanted a deal. He wasn't -- there weren't a lot of red lines being drawn in terms of what could be in a potential immigration deal. It sounded like they were very much in deal-making mode. They wanted to put all of the White House's immigration proposals out on the table and see if they can come up with some broader package.

BLITZER: Because when I asked him, Rebecca Berg, several times what happens over the next six months if there's no deal, what happens to these 800,000 young people whose parents brought them illegally to the United States? He says there will be a deal. We don't have to speculate about that. He was pretty upbeat about it. REBECCA BERG, CNN POLITICAL ANALYST: Right. And this is a little bit

surprising, Wolf, if you consider the history of Donald Trump as a candidate. He promoted himself as a deal maker, but at the same time, immigration was his core hardline issue. He framed himself as total anti-immigration, hardliner in this election. Now we're seeing that he's willing to cut deals on what was his core issue.

So I think a lot of Republicans are surprised by this. Certainly, the conservative wing of the party is surprised by this. And maybe it's not going to sit well with that wing--

BLITZER: Ron Brownstein, what was your reaction?

RON BROWNSTEIN, CNN SENIOR POLITICAL ANALYST: Well, look, I think that the -- fighting on the DREAMers has always been the weakest ground for the restrictionists in the Republican Party. And I think the administration recognizes that.

I mean, in a poll out today, Marist Institute, almost 60 percent of the country, including 40 percent of non-college whites and 50 percent of people over 60, opposed ending the DACA protections.

So in some ways, the administration was operating with a weak hand here, because in effect, they took these 800,000 kids as hostages, legislatively. And it's very difficult for them to actually harm those hostages, as Democrats recognize. I mean, they don't really have much leverage for Democrats -- to demand that Democrats accept the most polarizing parts of his immigration agenda, like cuts to legal immigration or the wall, because Democrats don't believe that he can go ahead and deport large numbers of the DREAMers if the negotiations break down.

And I still think in Congress it will come down to the same issue. Like 2006, like 2013, they can get 60 votes for a reasonable deal in the Senate. The question is whether Paul Ryan will demand a majority of the majority in the House. And if so, can he obtain it?

BLITZER: You know, and John Kirby, I'm going to get to you in a moment on London, but you know, Ryan, he also said he's pretty confident there could be a compromise health care bill that reaches the president's desk by the end of this month.

[18:40:06] LIZZA: Yes, I feel like we have been here before on that. He did express some optimism. And look, the Republicans are in the same place they have been all year. They are a few votes short of a majority in the Senate.

And so far, at least, we haven't seen the key votes that scuttled the previous deals flip and -- and support this. You already have Rand Paul, who's against the current deal, so that takes away one Republican there. A lot of other Republicans have been silent, and they only have until September 30. So--

BLITZER: But isn't there a possibility of a couple or three Democrats could join them? LIZZA: It is possible. This -- this legislation has not been scored

by CBO. A lot of the health policy wonks will tell you that there's going to be some serious sticker shock in terms of the uninsured, as the previous bills. And we'll wait for that to come and see if that affects the process.

BLITZER: John Kirby, let's talk about London, the terror attack earlier this morning. Shortly afterwards, the president tweeted, "Another attack by a loser terrorist. These are sick and demented people who were in the sights of Scotland Yard. Must be proactive."

To which the British prime minister, Theresa May, responded by saying this.

(BEGIN VIDEO CLIP)

MAY: I never think it's helpful for anybody to speculate on what is an ongoing information. As I've just said, the police and security services are working to discover the four circumstances of this cowardly attack and to identify all those responsible.

(END VIDEO CLIP)

BLITZER: Did the president's comments undermine or hurt the investigation?

JOHN KIRBY, CNN DIPLOMATIC AND MILITARY ANALYST: I don't know. It's maybe too early to say whether it hurt. It certainly didn't help any, and it's inappropriate.

This was hours after, not even hours after this, when he tweeted that. And then she had to respond. And she was right to slap him back for that.

I mean, there's still an active hunt right now in London to try to find the perpetrators. So speculating anything out there is certainly not helping authorities that are on the ground trying to solve this and to keep the city safe.

It strikes me every time he believes there's a sort of link to Islamic-based terrorism, that he jumps right in on Twitter, and yet there are other times where he just simply won't. This sort of reinforces his narrative about Islamic terrorism, whether it turns out to be that way or not.

BLITZER: The president's national security advisor, General H.R. McMaster, said the president was -- was talking about the terrorist threat in general, not specifically referencing this attack. What did you think of that explanation?

BERG: Well, it's a plausible explanation, Wolf, but the question is, should the president need a translator for his public statements? And this isn't the first time this has happened, where the president has stoked controversy with his tweets or been less than clear about what he meant. And this becomes a problem, especially when we're dealing with our

foreign partners like the U.K., like Great Britain, who need our trust, who need to be able to depend on us, the United States, and the president to say what we mean and mean what we say. And with Donald Trump, that isn't always the case.

BLITZER: Yes. Ron, what did you think?

BROWNSTEIN: Well, you know, I'm just struck. I mean, they're -- judging by the appearance of the White House legislative affairs director in the situation room just before we went on, there are a lot of ways under General Kelly in which this administration is becoming more normal in which it is playing off different factions in Congress, trying to find the best way forward; where it was organized and responding to these two hurricanes.

But these tweets are a reminder that there's always going to be a limit on that. And that the president is simply -- this president is simply going to communicate and say things and do things that are unlike any other president. And there are people who like that, but there is a reason why, even after several relatively good weeks, his approval rating is stuck below 40 percent.

And as I said before, I think the biggest problem he has are the -- are the portion of the country that just has doubts about the way he approaches the presidency and whether he has the right set of skills, temperament, judgment, experience, to do it. And again, even as things get more normal, this is a reminder that they're never going to get that normal.

BLITZER: All right. There's more news we're following, more breaking news coming up. Are President Trump and his team talking about military options after North Korea's latest missile launch over Japan?

Plus, the Atlantic storm that's just become a hurricane again. Which parts of the U.S. may have to brace for Jose?

(COMMERCIAL BREAK)

[18:48:56] BLITZER: Breaking news tonight, President Trump reacting to the latest defiant missile launch by North Korea, saying U.S. options for dealing with the Kim Jong-un regime are, quote, effective and overwhelming.

Let's go to our Pentagon correspondent Barbara Starr.

Barbara, Trump and top members of his team are making clear that military action is still on the table.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Absolutely, Wolf. But the problem remains unchanged. Any military option ordered by President Trump could result in tens of thousands of casualties.

(BEGIN VIDEOTAPE)

STARR (voice-over): Sirens blare across Japan warning a North Korean ballistic missile is overhead, a different kind of warning from U.S. officials.

National security adviser, H.R. McMaster, says time is running out for dealing with North Korea.

H.R. MCMASTER, NATIONAL SECURITY ADVISER: For those who have said and have been commenting about the lack of a military option, there is a military option. Now, it's not what we prefer to do.

STARR: U.N. Ambassador Nikki Haley acknowledging U.N. sanctions may not work.

[18:50:02] NIKKI HALEY, U.S. AMBASSADOR TO THE UNITED NATIONS: I have no problem kicking it to General Mattis because I think he has plenty of options.

STARR: U.S. military planners are looking once again at how to quickly take out North Korean weapons, just north of the DMZ before Kim could counterattack into Seoul.

COL. STEVE WARREN (RET.), CNN MILITARY ANALYST: There are literally thousands of tubes of artillery along the demilitarized zone aimed south. Some directly in Seoul.

STARR: South Korea's response was immediate. Firing two missiles from the east coast into the Pacific. Missiles said to be capable of reaching North Korea's launch site, though one failed in flight.

The path of the North Korea missile, a possible poke from Kim Jong-un to president Trump. The missile flew eastward for 2300 miles landing in the Pacific Ocean. Hand it flown south, the U.S. territory of Guam is just 2100 miles from North Korea within the missile's range. Guam had already been threatened by the Kim regime.

The new launch, a show of defiance to the international community, it comes just five weeks after President Trump's extraordinary ultimatum.

TRUMP: North Korea best not make anymore threats to the United States. They will be met with fire and fury like the world has never seen.

STARR: Beyond diplomacy and all out war, there is another possible option.

WARREN: There could be a cyber attack that the North Koreans don't understand that it was a cyber attack from us. Sometimes, when you attack, you want your enemy to know that you've punch them in the nose. Other time, you want them simply to fall down and wonder why they fell.

(END VIDEOTAPE)

STARR: But if it did come to bombing, one of the key problems remains the U.S. simply is not certain where Kim has hidden all of his weapons -- Wolf.

BLITZER: All right. Barbara, thank you. Barbara Starr at the Pentagon.

More on the breaking news coming up, including a new threat from the Atlantic tonight. We're tracking Hurricane Jose. There's a new forecast we'll update you when we come back.

(COMMERCIAL BREAK)

[18:57:23] BLITZER: The breaking news: tropical storm Jose has just regained hurricane strength and it could impact the northeast United States.

Our meteorologist Allison Chinchar has the very latest forecast.

Allison, Jose comes on the heels of hurricanes Harvey and Irma. What can we expect from the storm?

ALLISON CHINCHAR, AMS METEOROLOGIST: Well, I'd like to say that folks can their fingers crossed and hope it goes out to sea. But it doesn't look like it's going to do that. In fact, folks from Florida all the way to Maine are likely going to have some form of an impact from Jose.

Now, the latest advisory that just came out did upgrade it to a hurricane. Winds now 75 miles per hour, moving to the northwest at about 10 miles per hour.

Here's the thing, as the track continues up to the North, it's going to skirt awfully close to the east coast, eastern coastline. Here's the thing: at some point tomorrow, the National Hurricane Center said they are likely going to issue tropical storm watches for portions of the East Coast, likely around portions of the North Carolina because it is going to expect to get a little bit closer to that coastline, but also the size of the storm is expected to expand allowing some of those outer bands to get much closer, to say the outer banks of North Carolina.

Then from there, once we're talking about Wednesday morning, now, the storm looks to be about 225 miles due east of New York. The thing you have to keep in mind is, the margin of error for this cone is also 225 miles, which means that cities like New York, Boston, even around Nantucket are still going to be in that realm of possibility as we get towards Tuesday and Wednesday of next week.

The two big models we've been showing you the last couple of weeks, the American model, the red one, and the blue model is the European. Notice how the American model really does show that expansion of size. In doing so, it starts to add extra cities like New York, and also, Nantucket and Boston.

But even the European model also has it impacting states like Connecticut, Massachusetts and even Rhode Island before the system finally pushes out over open water. There is a silver lining to this, and that's that we don't expect this to become a category 3, category 4 or a category 5 storm, because as it pushes north, it's going to be entering much cooler water. That's going to prevent this storm from getting much stronger and intensifying. So, that is the good thing there.

Here's the thing, Wolf, we talked about impacts. Everywhere from Maine, all the way down to Florida, yes, even the folks still recovering from Irma, are going to have a pretty significant rip current threat as this storm, as it pushes north, is just going to push all of that water inland, so rip currents are going to maintain a large threat even before the tomorrow storm makes landfall.

BLITZER: Harvey, Irma, and now Jose. We'll watch it with you. Allison, thanks very much.

That's it for me.

"ERIN BURNETT OUTFRONT" starts right now.