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THE LEAD WITH JAKE TAPPER

Interview With Arizona Senator Jeff Flake; Trump in China; Republican Tax Cut Plan Adds $1.7 Trillion to Deficit. Aired 4:30-5p ET

Aired November 8, 2017 - 16:30   ET

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


[16:30:03]

SEN. JEFF FLAKE (R), ARIZONA: The law states that they're supposed to go to NICS. And so we're trying to find out why they aren't.

But the problem is, if you just have a category for assault, that could be anything from a bar fight to something far, far more serious, like domestic assault.

And unless it's specified, I think we need to clarify it to say that you have to list it as domestic assault and then report it.

JAKE TAPPER, CNN ANCHOR: Doesn't assault in and of itself also need to be inputted into the national instant check system?

FLAKE: Yes. It depends on what type of assault.

In fact, the military system doesn't have misdemeanor or felony, so it could be something as innocent as a bar fight, which probably wouldn't impact somebody's ability to have a constitutional right to a gun or something far more serious.

And so since we have such a discrepancy in military courts as to how these offenses are categorized, think we need to stipulate it. I think it's clear that that needs to be done in order to make sure that serious offenses like domestic assault are forwarded to the right system.

TAPPER: It seems that this is a systemic problem in the military.

FLAKE: Yes.

TAPPER: In 2015, the Pentagon inspector general found 30 percent failure rate in submitting fingerprints and criminal case outcomes to the FBI's criminal database and this failure to properly report dates back literally decades.

This is one example. There must be -- I can't even think of what the number might be of other examples similar to what happened with the Texas church shooter. Is the military taking this seriously?

FLAKE: Well, it's hard to give them a passing grade here.

In this case, there were exactly three times when this individual should have been sent to the system, when he was involuntarily committed to a mental institution, second, when there was probable cause that he had committed this crime, and then if probable cause, if you send it there, if he's then exonerated, then it's taken off, but it is -- it should be sent there.

And then obviously with the conviction. So, for those who say we simply we have the law, we ought to follow the law, this law needs to be clarified with regard to criminal and civilian -- or -- I'm sorry -- military and civilian courts. It needs to be standardized to make sure that we capture all of these cases.

TAPPER: Is there an appetite in the Senate for whether it's closing the loophole or clarifying what needs to be done, or under no uncertain terms directing the Pentagon to abide by the laws of this country?

FLAKE: Right.

TAPPER: Is there an appetite for this in the Senate?

FLAKE: I think that we need to clarify the statute. Some people will say, no, all we need to do is direct the Pentagon to better enforce it.

I do think there is certainly going to be direction to the Pentagon. The question is, do we clarify the statute? I think that we need to. I think that, as we gather more information from the FBI, from these databases and from the Department of Defense, it will be clear that we need clarification to the statute.

TAPPER: Republican Senator Jeff Flake of Arizona, thank you so much for your time, sir. Good luck with your efforts there.

FLAKE: Thank you.

TAPPER: Just into CNN: North Korea lobs an insult at President Trump -- how Kim Jong-un is reacting after President Trump's speech in his own backyard. That's next.

(COMMERCIAL BREAK)

[16:37:28]

TAPPER: Breaking news in our world lead now.

North Korea just responded to President Trump's speech last night in South Korea. He called the president a -- quote -- "lunatic old man," according to a North Korean state newspaper.

President Trump has since made the next stop in his Asia tour in China today.

CNN's Sara Murray is traveling with the president. She's live for us right now in Beijing.

And, Sara, was the Trump White House prepared for this response from North Korea?

SARA MURRAY, CNN NATIONAL POLITICAL CORRESPONDENT: Well, Jake, I don't think the White House is going to be surprised to see a little bit of name-calling. Remember, there has been name-calling on both sides of this relationship.

But it is another stunning sort of call-out from North Korea to say that the U.S. should oust this lunatic old man, referring to President Trump. It's unclear if that was an article that was published before or after the president gave his speech in South Korea. We didn't hear the kind of fire and fury rhetoric from him.

We didn't hear the kind of name-calling from -- Kim Jong-un during that speech, but he certainly had a lot of tough talk for North Korea. He called for denuclearizing that country. And we're going to see him talk about that in the bilateral meeting today with President Xi Jinping in China, but also in an upcoming meeting with Russian President Vladimir Putin.

Trump made very clear he wants to see both China and Russia to step up their efforts to try to isolate North Korea.

TAPPER: Sara, I think you're already in tomorrow, but here still in today in the United States, it's the one-year anniversary of President Trump being elected president. Last night, of course, was also a major political loss for him, especially in Virginia. How is the White House reacting?

MURRAY: Well, the White House is kind of shrugging this aside.

They look at what happened in Virginia, they certainly look at what happened with Ed Gillespie and say, this is what happens when you don't wrap your arms fully around the president. And so naturally President Trump took to Twitter to air his feelings and said: "Ed Gillespie worked hard, but did not embrace me or what I stand for. Don't forget, Republicans won four out of four House seats and with the economy doing record numbers, we will continue to win even bigger than before."

But there is no doubt, Jake, that the president did throw his support behind Ed Gillespie. Gillespie lost by a pretty wide margin. And so it's difficult to see this as anything but kind of a soul-searching moment, certainly for Republicans, about how they navigate their reelection fights in a landscape with President Trump, whose popularity certainly is very low back in the United States.

But the White House's view is, look, we are doing a great job on the economy, and if you want to win your race, you should wrap your arms more closely around the president.

We will see if any Republicans take that advice.

TAPPER: All right, Sara Murray in China, thank you so much.

New information on the Republican tax reform bill. Do the numbers add up? Is this really a tax cut for everyone? [16:40:02]

That story next.

(COMMERCIAL BREAK)

TAPPER: We're back with the politics lead.

Especially in light of yesterday's election news, Republicans in Congress are desperate for a legislative win, but they may have just hit a huge roadblock as they race together to put together a tax reform proposal.

The problem is, well, the bill in its current form breaks promises made to cut taxes across the board for the entire middle class. Also, it breaks a pledge to stay on budget. That's according to an analysis released today.

CNN's Phil Mattingly joins me now live on Capitol Hill.

Phil, House Republicans hope to pass their next -- pass the tax bill by next week, before Thanksgiving. How can they make the fixes and strike a deal before then? Is that even possible?

PHIL MATTINGLY, CNN CORRESPONDENT: Yes, it is, but it's going to have to be quick and it's going to have to be delicate. Look, there's a number of major outstanding issues that they've really kind of saved to the end of this process. They're going to need to shore up before they can actually move forward. And while a lot of them get it deeply in the (INAUDIBLE), one of them is what you just mentioned, Jake, who actually gets a tax cut here? It's a question that I brought up to Ways and Means Chairman Kevin Brady earlier today. Take a listen.

(BEGIN VIDEO CLIP)

REP. KEVIN BRADY (R-TX), CHAIRMAN, HOUSE WAYS AND MEANS COMMITTEE: One thing joint tax made clear is that there's tax relief in every income bracket. And as we continue to work through the bill, as we continue to look at these provisions, at the end of the day, I'm confident we're going to have tax relief at every income level for many, many Americans.

MATTINGLY: But every income level isn't every American. There's kind of an understanding right now that people will see their taxes go up in some areas.

BRADY: Well, I have to tell you this, I think every American will be off. Here's why. Because that measures the wages, you know, and the taxes of it. What we're trying to focus on aren't paychecks.

(END VIDEO CLIP)

MATTINGLY: Now, Jake, if you listen very closely, the Chairman was being very careful there. Unlike some other senior Republicans who are pledging tax cuts for everybody, what Kevin Brady is saying is there will certainly be tax cuts across the board but some people will see their taxes go up. And that's why the importance of selling the overall economic argument is what leaders are focused on with their members right now. Their ability to do that at this point will determine whether this bill has a future in the House. Jake?

TAPPER: And Phil, while traveling in Asia, President Trump called into a meeting of Senate Democrats. Sources familiar with the conversation tell CNN that President Trump said he would be a big loser under the current plan. Does his call alone show a legitimate sincere effort to bring Democrats into the process, do you think?

MATTINGLY: Look, there's been courtesy outreach. There's no doubt about it. There's been dinners at the White House, there's obviously the meetings that the President called into but I think there's real questions on the Democratic side -- at least Democrats that I've spoken to -- whether it's actually serious. And I think some of them actually point to the call itself. The President talking, as you noted, saying the direct quote, I'm told that he would be a big loser. That's a conclusion he came to after speaking with his accountant. And if you look at the bill itself, at least the Republican proposal is out there right now, whether it's on the state -- the estate tax, there's the repeal of the alternative minimum tax, whether it's what they're doing on pass-throughs, that's just demonstrably false at this point in time.

I think the big question now for Democrats is will there be any major changes beyond that initial outreach, changes that they're seeking? And at this point in time, certainly in the House and from what I've heard what's coming from the Senate proposal which should be coming out tomorrow, the answer right now despite what the President says about the plan touting its middle-class benefits is no, Jake.

TAPPER: All right, Phil Mattingly on Capitol Hill for us. Thanks so much. My panel is back with me. David, there's been talk on Capitol Hill by Republicans that maybe the tax bill in light of what happened yesterday, the tax bill should maybe be rewritten just to change it to make it more beneficial to the middle class. What do you think?

DAVID URBAN, CNN POLITICAL COMMENTATOR: Well, so I've not seen the entire bill and ingested it, right? So there's lot of -- but there's lots of concerns obviously. You have to educate people on, you know, raising their standard deduction. Really takes cares of lots of folks and itemization isn't as big deal and you lose your homeowner tax credit because you get a bigger deduction. A lot of education has to take place. I'm not sure they have enough time to do that, right? We have December 9th comes up. Let's not forget the C.R. runs out. We have this fiscal cliff, DACA reform, there's lots of things that are going to happen -- have to happen before the end of the year. Republicans are kind of in a squeeze and yet you're trying to pass this really complex tax bill. It becomes very, very challenging.

TAPPER: Amanda, the estate tax, the elimination of the estate tax which benefits really the very, very, very wealthy, is that -- does that make it difficult to sell this plan?

AMANDA CARPENTER, CNN POLITICAL COMMENTATOR: I don't think so. The way -- you know, I've seen this -- I think it does would be messaged better is that there are essentially two tracks. There is a middle- class tax cut coming and they're going to do a lot for businesses. And I think estate tax, you know, family farms typically falls under that business type of bracket. And so, the big thing they really need to do a better job of explaining is that yes, a lot of these deductions are going to go away, but the big bet is that if we double the standard deduction that will make up for it in the middle-income family (INAUDIBLE) a lot, family of four $59,000 a year will get 1,200 -- about $1,200 a year back.

NEERA TANDEN, PRESIDENT, CENTER FOR AMERICAN PROGRESS: They have the bill. There are winners and losers. People between 20,000 and 40,000, it's a lot of people who voted for Trump, struggling in the (INAUDIBLE) they see on average a tax increase. What's weird about this bill is they have corporate tax cuts that go in for ten years.

TAPPER: Those were from 35 percent to 20 percent. That's the corporate tax rate.

TANDEN: Basically. Yes. And then -- but for the middle-class tax cuts, a lot of the middle-class taxes, the deductions, they phase out after five years. So that's the big question, why do you have phase- outs for people who are working and no phase-out for corporations? This bill is incredibly unfair, increases taxes for working class people, lowers taxes massively for the wealthy and people like Donald Trump.

And I think the challenge is there is no process to get Democratic participation in it. It's a partisan process. We're looking for 51 percent on either side. It adds to the deficit. And I think the one thing is Ed Gillespie yesterday ran on a middle -- on a tax cut across the board, right? He campaigned on it. He did ads on it and he lost. And suburban voters where a lot of Republican House Members are, suburban voters turned out against Ed Gillespie, even though that was his number one economic message. Now, I don't know why Republican House members want to vote for a plan that is so unpopular with the people.

[16:50:29] TAPPER: I don't know they were voting against him because of his economic proposal.

TANDEN: No, but it didn't help him.

TAPPER: It didn't help him. But let me ask you a question, David. Obviously, most middle-class people will see a tax cut under this, but not all of them will. I mean, what Neera just said, this weird little group, $20,000 to $40,000. They will see a tax increase. Shouldn't that just be fixed?

URBAN: Well, this is -- this is the first shot, right? This is the House bill. The Senate -- you heard what Senator Hatch said. This is -- this is a piece of legislation that you're going to have the President aligned on, the House and Senate, it's all in their best interest to pass this. They're going to have to come to some consensus to get this -- an agreement on it. I think the President wants to see something perhaps different than the House. The Senate wants to see -- they all want to see something different. They're going to have to get together. It's all in their best interests to have something accomplished, signed to run on. That's what people need. They need something an accomplishment or a victory here and I think you're going to see it.

TAPPER: Neera?

TANDEN: I mean, I just think Republicans don't vote for something that they don't think is a good idea, right? If we put forward a proposal that doesn't increase taxes on middle-class families.

TAPPER: So here's the thing, Speaker Ryan has the exact opposite idea as people who say maybe we need to rejigger this bill and make it more beneficial for the middle class. Here is Speaker Ryan saying that if anything, this puts more pressure on his party to deliver this bill as soon as possible. Take a listen.

(BEGIN VIDEO CLIP)

REP. PAUL RYAN (R-WI), HOUSE SPEAKER: It just emphasizes my reading of the current moment which is we have a promise to keep. If anything, this just puts more pressure on making sure we follow through.

(END VIDEO CLIP)

TAPPER: How much is this, Amanda, do you think about not so much even this bill but as much about the fact that Republicans need to deliver something? They need to be able to go back to their voters and say, OK, ObamaCare, the repeal and replace didn't work and the wall isn't built, and etcetera, et cetera, but this is a major piece of legislation and we did get this done?

CARPENTER: Yes, here's the thing. A lot of people went along with Trump, and his victory gave him the benefit of the doubt because they wanted to get things done. If they do not get things done and able to point to legislative victories, they are forced to run on Trumpism just as cultural conservative issues. Will that work for someone you know, mimicking Trump in a place like Tennessee which it seems like Marsha Blackburn is doing for Kelli Ward in Arizona? Yes, maybe, but in purple states, in blue districts, where they compete with moderate Dems, cultural Trumpism isn't going to work. They're going to need a lot more.

TANDEN: You know, I don't know, why don't you pass something that people want? This bill is already unpopular, right? This happened with health care. It's like, we just have to pass something. We just have to pass something. Even though the American people don't like what you're passing. So here's an idea --

CARPENTER: But people -- but they do want a simplified tax code and we're losing sight of the big picture here that it is going to be simpler. And yes, some people will see differences, taxes will go up for certain groups, but by and large middle-class people are going to get a tax cut.

TANDEN: People don't want a massive tax cut for the wealthy so -- CARPENTER: People do want to drain the swamp.

TAPPER: Let's --

URBAN: Yes, I was going to say, Neera, I don't know if you can categorize this as a massive tax cut for the wealthy.

TANDEN: It is. The vast majority of it goes to wealthy people.

CARPENTER: It's because they pay the vast majority of the taxes.

TANDEN: 86 percent of this tax plan, the benefits go to the top one percent. Of course, that means it's very skewed to the wealthy.

URBAN: To Amanda's point, most -- you know, there's certain percentage of Americans pay taxes, most of those people are at the top end of the bracket. That's where the money comes from. Look, we can argue about facts --

TANDEN: It's not. We're not arguing facts, we're arguing values.

URBAN: My point again is though that there's an alignment of interest here, right? The Senate, the House, and the President all want to see tax reform. They want to see it passed. They want an accomplishment to hang their hats on. You can't go home and campaign if you're in the House, you can't go and campaign or the Senate if you don't have an accomplishment. You're going to lose seats. Midterms are notoriously bad for the party in power. They need to have some accomplishments to round on. They need this.

TANDEN: I just don't understand why when you pass something super unpopular you don't think that also hurts you.

(CROSSTALK)

URBAN: I disagree it's super unpopular.

TAPPER: Thanks one ad all. Big trouble in China. Three college players from a storied basketball program arrested and confined to their hotel rooms in China. Could one of their fathers be digging the hole even deeper? Stay with us.

(COMMERCIAL BREAK)

[16:55:00] TAPPER: We're back with the "SPORTS LEAD" now. Just as President Trump starts crucial meetings in Beijing, three UCLA basketball players are out on bail after being arrested for shoplifting in China, according to ESPN. It's no small offense to the Chinese. The players are on house arrest in their hotel. The players, including LiAngelo Ball, the brother of Lakers Star Lonzo Ball are accused of stealing sunglasses from a nearby Louis Vuitton store. LiAngelo's father LaVar was quoted as saying, "This isn't that big of a deal." He's known for eccentric stunts and bombastic boasting like saying Lonzo is better than two time MVP Steph Curry and launching a $220 pair of flip-flops. The 49-year-old also once said that he could beat Michael Jordan one-on-one. And unless he was talking about NBA on Xbox, I'm going to have to respectfully disagree with him on that. The team starts their season in China on Friday. But the players involved will be sitting out.

Be sure to follow me on Facebook and Twitter @JAKETAPPER or you can tweet the show @THELEADCNN. We actually read them. That's it for THE LEAD, I'm Jake Tapper, I turn you over now to Wolf Blitzer. He's right next door in "THE SITUATION ROOM." Thanks for watching.