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INSIDE POLITICS

Senate to Unveil Tax Plan; Trump's About-Face on China; Bannon on China's Power. Aired 12-12:30p ET

Aired November 9, 2017 - 12:00   ET

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


(COMMERCIAL BREAK)

[12:00:27] JOHN KING, CNN HOST: Welcome to INSIDE POLITICS. I'm John King. Thank you for sharing your day with us.

President Trump is in China and it's not your fault if you can't believe your ears. Candidate Trump called China a trade cheap that was raping the United States of blue collar jobs. Not anymore.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: The United States, the feeling we have for China is a very warm feeling and I really believe it's only going to get warmer.

(END VIDEO CLIP)

KING: Plus, election 2017 has Democrats upbeat. President Trump is unpopular. Another Republican is retiring from the House. But can the Democrats carry Tuesday's momentum into 2018?

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI (D), MINORITY LEADER: That opens the door. That means we get the fresh recruits and they get the retirements. We get the A-team and the candidate is very important in the elections.

(END VIDEO CLIP)

KING: Up first, though, several big new twists to the debate over tax cuts. A key vote in the House. A new plan in the Senate. And what some Republicans call urgency, and others call panic. The belief after Tuesday's election route that if they don't pass a tax plan, and soon, the Democrats will take control of Congress.

(BEGIN VIDEO CLIP)

REP. PAUL RYAN (R), HOUSE SPEAKER: It takes time, but, trust me, we're going to get this over the finish line. We're going to get this over the finish line because we need to get this done for American families. We need to get this done for people who will be helped by simpler, fairer taxes. And, today, we're taking one big step closer to fulfilling that a goal.

(END VIDEO CLIP)

KING: It is the biggest day so far for what the more and more Republicans see as a do or die push on tax reform. Just minutes ago on Capitol Hill, Senate Republicans going behind closed doors for a briefing on their version of tax reform. It's a complication for a party that readily admits now it must pass sweeping tax cuts if it hopes to stay in power.

We now have two bills, that's two sets of math, two sets of projections, two set of problems some say that need to be solved before either bill hits the floor.

Not helping? President Trump. Remember back during the Obamacare debate when he call the House bill mean? Well, some say he's undercutting House Republicans again, calling into a gathering with middle of the road Democrats, the president tipped his hand, according to "The Wall Street Journal," telling Democrats on the other end of the line, ignore the House debate. He promised them the Senate plan, quote, you're going to like it a whole lot more.

Another hiccup? Messaging. Not just on Capitol Hill. Take, for example, this blast from the past phrase from one of the president's point men on tax reform.

(BEGIN VIDEO CLIP)

GARY COHN, WHITE HOUSE CHIEF ECONOMIC ADVISER: We create wage inflation which means the workers get paid more, the workers have more disposable income, the workers spend more and we see the whole trickle down through the economy. And that's good for the economy.

(END VIDEO CLIP)

KING: That whole trickle down through the economy.

With us to share their reporting and their insights, CNN's Dana Bash, Olivier Knox of "Yahoo! News," Elian Johnson of "Politico," and CNN's Abby Phillip.

It is a giant day anyway, all the more so because it comes right after this election where just about any Republican you talk to says, we better get this done or we'll deserve to lose our majorities. Not alone will we lose them, but we'll deserve to lose our majorities.

Let's just start with where we are today in the sense that some people say it's normal. You have a House plan. The Ways and Means Committee is considering it. They're going to mark it up. Now you get a Senate plan in which the White House -- the president said, watch the Senate plan, yet the Senate plan delays the corporate tax cut that the president wants, but he says that's the better one. That's the way it used to work. House plan, Senate plan, get together, final plan. But does anything in this town work like it used to?

ABBY PHILLIP, CNN WHITE HOUSE CORRESPONDENT: Well, no. I mean what's interesting about the president's comments in the meeting is that I don't know that -- how much we should read into it except that based on what he's learned after health care and other failures on The Hill, I think he's realized that the Senate is kind of the steeper hill to climb. And that ultimately what the House does is going to be what a certain segment of the base wants, even what he wants. I think he wants the corporate tax rate to be permanent and start immediately.

But I think he gets that the Senate bill is probably closer to reality because it's just harder to get through that chamber. At the same time, I'm not sure that that's a reflection of, oh, does the president want a one-year delay in the corporate tax rate? Probably not. Like nothing I've heard has told me that that's really what he wants. So I think sometimes he's before these groups of people, he's before the senators and he's telling them what they want to hear and that may not have much relationship to what is actually going to happen and what his people are working on.

DANA BASH, CNN CHIEF POLITICAL CORRESPONDENT: Well, the one thing that is interesting that I've heard is -- from people who have been in meetings with the president, and they were meetings during the Obamacare negotiations and now during the tax reform negotiations, is how different the president is. That he gets this stuff. He understands this stuff. He obviously lived it as a businessman, the whole notion of taxes and tax rates and obviously corporate tax cuts.

[12:05:17] And I was actually told that during one health care meeting, somebody asked a detailed question about Obamacare and he looked at his then HHS secretary, Tom Price, and said, answer that question. What am I paying you for? And now when he's in these meetings, he's on it.

So it is odd that he would say to Senate Democrats, oh, you know, I'm OK with your bill if he knew that it would be a delay in the corporate tax rate, but maybe not. Maybe he's trying to get to that deal.

KING: Right. And the Senate can't even take a vote. They can have their own version, but the tax bill must originate in the House. So the House has to send a bill over there.

But on the Senate issue, they're releasing their bill today. Again, it doesn't meet all the president's tests. But does it meet this test? Listen to Mitch McConnell here. One of the downfalls of Obamacare, after it passed mind you, was, if you like your doctor you can keep your doctor. Listen to Mitch McConnell here saying, if you're in the middle class, worry not.

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL (R), MAJORITY LEADER: But at the end of the day, nobody in the middle class is going to get a tax increase. And we are committed to middle class tax relief.

(END VIDEO CLIP)

KING: Nobody. Nobody. He says nobody. He says nobody. If you look at the House plan, if you look at all the studies of the House plan, there's a big debate over this think tank versus that think tank versus this analysis. But most of them say, most middle class families will get a tax break, but it depends where you live, what deductions you have, how much your house costs. Is Mitch McConnell going to regret that?

ELIANA JOHNSON, "POLITICO": Well, I would also point out that no tax increase is not the same thing as getting tax relief. And the president ran on reducing taxes or passing a tax plan that was targeted at middle class families.

The thing that really strikes me about the tax bill that the House came out with is that it's so heavily focused on corporate tax relief. And I think when people go to the polls and vote on this, they're asking themselves, how did this impact me? And corporate tax relief, I don't think, strikes people as something that's going to impact them personally. And that seems to me to be the major flaw with the House bill when Republicans are talking about, we need to get this done in order to, you know, have it help us with the polls in 2018. This bill is not popular. And so it's unclear to me if that's actually going to be true in -- at the polls in 2018 for Republicans if it does pass.

KING: And, Olivier, listen to the speaker here. This is in a conversation on Fox News. Look, he has to manage the sheep in the House. When he was the Ways and Means Committee chairman, he would want a different tax plan than he has now that he's the speaker of the house. He thinks this is the best he can get through. But among those who are unhappy are some conservatives who think, we're in the majority, at least the first version of this should be bigger and bolder.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: As speaker, why not go for broke?

REP. PAUL RYAN (R), HOUSE SPEAKER: We are.

UNIDENTIFIED MALE: Make it as conservative as possible and see how much you get through.

RYAN: I'm very pleased with this product. Look, this is far more bold tax reform than the '86 tax reform that Ronald Reagan did. These tax cuts are deeper and bigger than what Ronald Reagan did.

(END VIDEO CLIP)

OLIVIER KNOX, "YAHOO! NEWS": Yes, so, I mean, Mitch McConnell and Paul Ryan kind of want us to forget the rest of 2017 and forget the problems inside the Republican Party, but they pop out frequently in this debate.

KING: Right.

KNOX: When the chairman of -- the current chairman of Ways -- when Mr. Brady came out and sort of started talking about the House proposal, he couldn't help himself. He threw in a couple knocks at the Senate.

KING: Right. KNOX: OK. This is not a united party. I see a lot of comment, including from some folks who used to be in the Trump White House. I don't understand why this is so hard. We have all the levers of power. It's a fundamental misunderstanding of where their party is today and where the schisms are today.

They proposed a bunch of things that a lot of -- well, the remaining northeastern Republicans balked at. They aren't -- it doesn't seem like they're trying all that hard to work through these chasms --

KING: Right.

KNOX: Much less reach out to Democrats and say, look, there are -- there are things we're going to bring in here that you were in favor of when Barack Obama proposed them, you know, reducing the corporate tax rate. There doesn't seem to be a real effort to do that.

And while I take your point that this is not the Obamacare debate, when I hear Paul Ryan saying, we're going to -- this is going to succeed because we ran on it --

BASH: No. No. Totally (ph) no.

KNOX: There are other things they ran on that, you know --

BASH: No. I mean in some ways it's harder than Obamacare.

KNOX: Yes.

BASH: You're exactly right.

PHILLIP: And I think that the casualty of this whole confusion, the intra party debate, is that the messaging on this bill is a disaster.

KING: Right.

PHILLIP: Nobody knows what this bill is going to do for them. And to Eliana's point, it sounds like a corporate tax cut. And when people are looking at it, they're not looking at, oh, am I going to -- am I going to save $1,500 a year on taxes? Is that even enough for me to notice it? I think it's hard for them to tell.

KING: And you can sell a corporate tax cut if you make the argument. The speaker just tried to make it. You know, look, if businesses have more money, businesses will create more job. That means more jobs in your community. That means not only --

BASH: Trickle down.

KING: Yes. Well, trickle -- I wouldn't use the term trickle down, Gary Cohn. Just a little bit of a reminder (ph). Democrats, by the end of the day, will be on that one.

But you can make the case that that means more restaurants. That means, you know, that means a bigger community, a better community, if you make the case in a sustained way. Instead, they have an issue. Here's one of the issues for me, just like Obamacare. If you look at this, you have 24 Republican senators of the 52 and 173 Republican House members who are serving under their first Republican president. They have been able to vote for years to repeal and replace Obamacare, to do this and to do that. They have not had to do something that actually might become law. That's part of the problem here, isn't it?

[12:10:20] JOHNSON: This, to me, is in so many way as replay of the Obamacare -- the transition from the Obamacare debate under President Obama to the Obamacare debate under President Trump, where you have kind of a slap dash bill that seems cobbled together, that isn't compelling to a lot of conservative outside groups who you really need messaging this bill for you. Instead, there is -- there are a lot of critics of this bill from the outside. But also in the sense that I don't hear any lawmakers making a really compelling case for this bill.

Paul Ryan, I wasn't really compelled by what I heard from him on Fox News or elsewhere. And, you know, similarly to Obamacare -- the Obamacare rollback, there was nobody who went out and owned that bill. So it will be interesting to see what happens. But I do think some of the ideological tensions in the party are -- are absolutely coming out on this.

BASH: But the point you made with that graphic is the unbelievable transition from opposition to governing. And, obviously, the growing pain in that transition has been a lot harder than people realize, which is why you hear Republican after Republican say, we have to do tax reform.

It's not so much about the substance of the bill, which it should be, but it's about proving that that transition is worth it. That the voters made a right choice in taking the Republicans out of the minority and putting them in the governing majority because they can actually do something.

KING: Right. But when your family's as complicated as the Republican family is, a, you have to compromise to pass something to become law.

BASH: Right.

KING: They haven't' learned how to compromise. B, you have to actually support your president to be loyal to your president to get things done. George W. Bush got Republicans to vote for a lot of things they didn't like --

BASH: A lot.

KING: But they're not loyal to this president. Especially after Tuesday, they have a lot of reservations about whether it's smart to be anywhere near this president. We'll continue the conversation later in the program.

But up next, President Trump trading tirades, insults, instead for flattery in China. His first face-to-face meeting with the Chinese president on his soil. A man the president of the United States now says he has great chemistry with.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Our meeting last night was absolutely terrific. Our dinner was beyond that. And you said, we'll just do a quick dinner. And I think it had to last at least two hours and we enjoyed every minute of it.

(END VIDEO CLIP)

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[12:16:46] KING: Welcome back.

What a difference a year makes. President Trump loving his visit to China, lavishing praise on his Chinese counterpart, Xi Jinping. The dinner, according to the president was, quote, absolutely terrific. Time together? Quote, a very, very great honor. The military display, magnificent. And as for those unfair trade practices the president, as a candidate, railed against? They're not China's fault.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I don't blame China. After all, who can blame a country for being able to take advantage of another country for the benefit of its citizens? I give China great credit. But in actuality, I do blame past administrations for allowing this out of control trade deficit to take place and to grow.

(END VIDEO CLIP)

KING: Candidate Trump, you might remember, had a he very, very, very different take.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: We can't continue to allow China to rape our country. And that's what they're doing.

China's taking our jobs, our money, our base, our manufacturing.

What they've done to us is the greatest single theft in the history of the world.

The greatest abuser in the history of this country.

Rampant theft of intellectual property.

A currency manipulator.

They break the rules in every way imaginable.

I have many friends in China. They agree with me 100 percent.

We have lost all of their respect.

They think we're run by a bunch of idiots.

(END VIDEO CLIP)

KING: Did they send a body double?

KNOX: Well, some of it -- some of this is natural, you know, diplomatic reigning in of the rhetoric.

KING: Some of it is -- yes.

KNOX: Some of it is just -- it doesn't really reflect the facts on the ground. Some of these past administrations do what they did in part because corporate America was really, really, really hungry to get into the Chinese market and people who make things in this country wanted cheap Chinese inputs to make them cheaper.

But, yes, I mean, this is a pretty dramatic shift in tone. You know, the Chinese have described this relationship privately as getting more than they expected, frankly, from Donald Trump. When Xi Jinping met with Donald Trump at Mar-a-Lago Resort in Florida, they thought they were going to have to make some kind of major concessions to this president, and they didn't. And they've been kind of surprised by this fact.

This trip, Xi Jinping's the most powerful Chinese leader in 40 years, since (INAUDIBLE) Mao. So in some ways, you know, the president's managing the most complicated and important economic relationship in the world today. Acknowledging the realities of Xi Jinping's consolidation of power. But it is very notable that he's shifted away.

Now, he's got a couple of decisions coming in line on steel and aluminum, right, trying to decide whether to take punitive measures. The president, before he left, labelled China a nonmarket economy. Got no attention really because, you know, only a few of us are nerds. But there are some important decisions coming down the pike and we're going to know a lot more about what this president intends to do probably in the next month or so as he looks at those trade actions.

PHILLIP: And time after time the administration has made it clear that when it comes to the -- them wanting to get certain things, concessions from countries that where they might have problems on other fronts, they're willing to put those aside in order to get what they want. And I think in addition to the economic issues, China is so critical on North Korea, at least this administration believes that they are so critical on North Korea, and, you know, Trump's national security advisers have made it clear, we're going to put those other issues, those small -- relatively small ball issues aside and focus on the big fish, which is I think getting China to the table on some of the other issues.

[12:20:21] BASH: I think that's -- that's a key. That's a key is trying to play the long game, trying to look at it -- the big picture. And try to establish good will with China and from China to get them to help on North Korea. But it doesn't look like, at least in the short term, it's paying off.

KING: Right. The question is, do you get a fair -- can you say, by the time you run for re-election, look what I got out of this transaction.

BASH: Exactly.

KING: Because, otherwise, this is what you're going to hear. If you look at the president's approval rating, it's historically low. He's had a 9 point drop in white non-college educated voters. Since the election, he's dropped down. That's where he (INAUDIBLE).

Listen to Chuck Schumer, the Democrats, this is tee ball for them. After campaigning like a lion against China's trade practices, the president is governing like a lamb. Rather than treating China with kid gloves, the president should be much tougher with China as he promised he would be on the campaign trail.

And it's not just Chuck Schumer. Steve Bannon of Breitbart says he's the president's wing man. But when h hears the president being so nice to China, he doesn't like it.

(BEGIN VIDEO CLIP)

STEVE BANNON, FORMER WHITE HOUSE CHIEF STRATEGIST: And if you think that the world is going to be a safer place with China as a rising power to the United States, I've got another thing -- you know, you've got another thing coming. Their relationship with Iran and Pakistan and Turkey is what is driving much of the tumult in the Gulf right now.

(END VIDEO CLIP)

KING: Notice the locater on that video, Warren, Michigan. Warren, Michigan. Donald Trump carried Michigan because of his blue collar support in places like Warren, Michigan.

It's a big test for the president. Can he make the case -- you're right, Bill Clinton ran against the Bushs in Beijing, the dictators in Damascus, and worked with both. Every president says things on the campaign trail. I would say this president's rhetoric about China was amped up quite a bit, which makes it so striking. Every president --

KNOX: Sure. Everything was ramped up. I mean --

KING: But the question is, can he -- when -- if -- will he be able to make that case that, I made a difficult choice, but here's what I got for it.

JOHNSON: Well, this is the point I think to watch. It's -- first of all, Trump is actually acting more presidential towards China, which I think is a good thing. But, second, it's very unlikely that the U.S. will be able to get out of China what it actually needs to get in order to resolve the North Korea crisis. It would need China essentially to cut off North Korean energy. So the U.S. is sort of biding its time with regard to China and trying to thread a needle between working collaboratively with China on North Korea and pressing China on its trade practices.

But when we reach a point in the North Korea crisis where the U.S. can't get what it needs out of China, how hard will the president push and ramp up the rhetoric on trade. And there's a third issue I think, which is countering China's influence in the region with all these other countries. And China -- you know, Xi has unveiled this one belt one road initiative. And this president, who has struck a unilateralist, somewhat isolationist tone at points, how hard does he push to counter China there. And so I do think it's not going to happen now, but is there a point at which he pushes back on trade and comes to the support of traditional American allies in the region.

KING: And traditional American values is always a question on these trips for every president. Do you speak out publicly against the human rights abuses in China. This president has chosen not to do that.

Do you -- today they appeared for statements. They didn't take questions. Obama did that on his first trip, no questions with Xi. A lot of U.S. presidents have insisted, no, if I'm going to stand out there with you, we're going to open this up to questions so that we can put you out there.

So this president, on the trip so far, has done everything Xi would like him to do, which is mute any differences, talk in private, don't put them in public. Listen to how the president's chief of staff, in a recent interview on Fox, described this.

(BEGIN VIDEO CLIP)

JOHN KELLY, WHITE HOUSE CHIEF OF STAFF: And as Americans we wouldn't -- we can't conceive of accepting a government like that, such as it is. But that is not us to pass judgment on. I think working with people, no matter who they are, is better than not talking to them. They have a system of government that is apparently works for the Chinese people and --

UNIDENTIFIED FEMALE: Well, not all of them. I mean a lot of Christians it doesn't work for.

KELLY: Well, not all of them. You're right. But let's hope that -- let's hope that this is a new kind of leader and not look back so many decades.

(END VIDEO CLIP)

KING: We can look back at the last five years.

BASH: Yes.

KING: Xi Jinping has been president for five years. And his human rights record is awful.

BASH: Yes. Also --

KING: It's Horrible. It's reprehensible. And I get this is a complicated relationship. I get all the complexities here. But they have a system of government they think is working for them?

BASH: Since when is it a Republican ideal or even frankly an American ideal in recent history to say it is not up to us to pass judgment on governments that have human rights abuses, that don't kind of have the most basic rights for their people.

[12:25:09] I mean look at what -- the argument that the president himself made in South Korea about North Korea. And, obviously, that's an extreme case. The way that they treat their people is beyond horrific. But it's -- I mean, I can just see John McCain, Lindsey Graham, even the Bushs' heads exploding hearing that.

KING: Right. Again.

BASH: Yes, again. Again. But in this particular, I mean the notion of --

KING: Right.

BASH: I mean this whole idea of American leadership.

PHILLIP: And it's not just China. It's the Philippines. It's Turkey.

BASH: Exactly.

PHILLIP: It's all over on the world where this administration picks and chooses when it cares about human rights. And, frankly, from the outside world, it just looks like there's no rationality to it except that if they feel like they want something from China, they will look the other way.

KING: Right. And some people think if their nice -- if the leaders are nice and flattering of Trump, they get special treatment.

PHILLIP: Yes.

KING: When we come back, Xi Jinping in China. Will the president sit down with Vladimir Putin when he moves on to the next stop in Vietnam?

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