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EARLY START

Trump Talks With Intelligence Chief; Trump Slams Media For Russia Reports; Senate Passes Bill To Repeal Obamacare; Tillerson Grilled At Confirmation Hearing. Aired 5:30-6a ET

Aired January 12, 2017 - 05:30   ET

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


(COMMERCIAL BREAK)

[05:30:50] JOHN BERMAN, CNN ANCHOR: All right. Breaking overnight, the phone lines heating up. This must have been one heck of a conversation. The director of National Intelligence calls the president-elect hours after Donald Trump rips the intelligence community with new accusations.

CHRISTINE ROMANS, CNN ANCHOR: Also overnight, the Republicans with the first votes to repeal the Affordable Care Act. This early morning vote coming despite defiant protests from Democrats.

BERMAN: And what questions by the Senate for Donald Trump's nominee to be Secretary of State? Why one Republican senator could determine whether Rex Tillerson gets to be the nation's next top diplomat. Welcome back to EARLY START, everyone. I'm John Berman.

ROMANS: And I'm Christine Romans. It is 31 minutes past the hour. Breaking overnight, Donald Trump and the director of the National Intelligence, they have a talk following the president-elect's major public blowup over Russian hacking intel. Now, the brawl began with a CNN report that intelligence officials gave Mr. Trump a two-page summary of an unverified dossier that claims Russia has compromising information on him.

Now, "BuzzFeed" followed up with salacious details from that intelligence summary, again unverified. Details CNN chose not to report because they could not be confirmed. Now, the president-elect, without denying he received the two-page report, lashed out.

(BEGIN VIDEO CLIP)

DONALD TRUMP (R), PRESIDENT-ELECT: I think it was disgraceful -- disgraceful that the intelligence agencies allowed any information that turned out to be so false and fake, out. I think it's a disgrace, and I say that -- and I say that. And that's something that Nazi Germany would have done, and did do. I think it's a disgrace.

(END VIDEO CLIP)

BERMAN: Nazi Germany, all right. This all seemed to prompt what must have been an extraordinary phone call from the director of National Intelligence, James Clapper, who released this statement overnight describing the conversation. He says he told the president-elect that, "The leaks that have been

appearing in the press are extremely corrosive and damaging." But he also said, "I emphasized that this document is not a U.S. Intelligence Community product and that I do not believe the leaks came from within the IC" -- the intelligence community. "The IC has not made any judgment that the information in this document is reliable, and we did not rely upon it in any way for our conclusions. However, part of our obligation is to ensure that policymakers are provided with the fullest possible picture of any matters that might affect national security."

Make sure you look at that last line very, very carefully because it seems to confirm what the Trump team would not, that the president- elect did receive this two-page summary of intelligence about Russia's alleged compromising information, which is exactly, and specifically, and precisely what CNN reported all along.

This subject just part of a circus of a news conference, the first in six months, from Donald Trump. CNN's Jim Acosta was right in the middle of it, to say the least.

(BEGIN VIDEOTAPE)

JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT: John and Christine, Donald Trump lashed out at the news media, including this news organization, over reports that the Russian government may have compromising information on the president-elect. At a news conference, Trump blasted the reports as fake news, but the president- elect appeared to accept the U.S. Intelligence Community's finding that Russia unleashed a hacking operation intended to harm Hillary Clinton. Here's what he had to say.

TRUMP: As far as hacking, I think it was Russia. But I think we also get hacked by other countries and other people. And I can say that, you know, when we lost 22 million names and everything else that was hacked recently, they didn't make a big deal out of that.

ACOSTA: Trump took on others topics, defending his plan to place his vast business holdings in a trust run by his sons. He also told reporters that there will be an Obamacare replacement bill ready as soon as the GOP Congress votes to repeal the healthcare law. And he vowed once again to build a wall on the border and make Mexico pay for it, something Mexico says it will never do -- John and Christine.

(END VIDEOTAPE)

BERMAN: This afternoon, top-level intelligence officials hold a closed-door briefing with members of the Senate to discuss the latest on Russian hacking during the 2016 election. So how is all of this, including the news conference and the latest round being received in Moscow by the Kremlin? I want to bring in senior international correspondent Clarissa Ward, live in Moscow this morning. And Clarissa, often the language we get from the Kremlin is extremely similar than that that we get from the Trump transition.

[05:35:13] CLARISSA WARD, CNN SENIOR INTERNATIONAL CORRESPONDENT: That's right, John, and actually yesterday we saw President-elect Donald Trump actually quoting directly from the Kremlin spokesperson Dmitry Peskov, who had dismissed this latest report as an utter fabrication, as fake news, as lies, and this is essentially what we've heard from the Kremlin for months now.

They have strenuously denied, since the allegations of hacking first reared their head back in October, having any involvement at all, and they've really tried to cast this as a political issue. As a last ditch effort by the Obama administration to discredit Russia, to disparage Russia, and also to kind of poison the well, if you will, in terms of a future relationship between the U.S. and Russia which, obviously, there's an expectation might warm a little with all of the nice things about President Putin that President-elect Donald Trump has said.

We heard from the Russian Foreign Ministry talking about this latest report. They said, "It seems that Obama's administration is trying to destroy everything within the U.S. and within American society." And it went on to say, "All this story is the Obama administration's revenge against Trump." And what's interesting as well, John, is that people here are not talking about the fact that Donald Trump did finally acknowledge that he believes Russia was behind the hacking -- John and Christine.

BERMAN: All right. Clarissa Ward for us in Moscow. Thanks so much, Clarissa.

ROMANS: Also breaking overnight, the Senate approved what could be first steps at repealing Obamacare. It was sort of a budget blueprint that passed, mostly along party lines, 51 to 48, but not before turning away a number of amendments from Democrats.

(BEGIN VIDEO CLIP)

SEN. SHERROD BROWN (D), OHIO: Thanks to Medicaid and the Children's Health Insurance Program, CHIP, two programs made stronger by the Affordable Care Act, 95 percent -- think of that -- 95 percent of children in America now have affordable, comprehensive health insurance that covers annual physicals and dental care and hospital stays. Why would we want to -- why would we want to move backwards instead of building on that 95 percent?

SEN. KIRSTEN GILLIBRAND (D), NEW YORK: Imagine becoming pregnant and having your insurer drop your coverage because you no longer are economic or you cost too much money. Imagine being a cancer survivor and then having your coverage dropped because you've survived cancer. If you love women, and you love your mothers and daughters and wives, please do not unwind the Affordable Care Act.

(END VIDEO CLIP)

ROMANS: So the measure now heads to the House, which could consider the bill as early as Friday.

BERMAN: All right. A packed calendar of confirmation hearings on Capitol Hill this morning. At 10:00 Eastern, senators begin taking up the nominations of Dr. Ben Carson for HUD Secretary, Mike Pompeo for CIA Director. That one will be interesting today given all the news. This morning, the confirmation hearing for Defense Secretary nominee Gen. James Mattis. The retired general, we should say, does need a special waiver to be confirmed and he just told House lawmakers he will not available to answer their questions at a waiver hearing which is scheduled for this afternoon.

All of this comes in the wake of a pretty contentious hearing for Rex Tillerson, Donald Trump's pick to be Secretary of State. The former ExxonMobil CEO tried to win over critics, including Republicans skeptical of his relationship with Vladimir Putin. I want to go live to Washington and bring in CNN national security reporter Ryan Browne. And Ryan, again, the interplay between Marco Rubio and Rex Tillerson was fascinating.

RYAN BROWNE, CNN NATIONAL SECURITY REPORTER: Absolutely, John. You know, I think Tillerson came into this hearing ready for some tough questions from Democrats. You know, he got those questions on whether or not ExxonMobil, under his watch, had tried to circumvent sanctions against Iran. He moved away a little bit from Donald Trump on issues like the Trans-Pacific Partnership (TPP) trade deal that Trump attacked repeatedly in the campaign but Tillerson said he wasn't opposed to.

He also embraced climate change a little bit more than Trump has in the past and actually struck, at the beginning, a pretty harsh tone on Russia.

(BEGIN VIDEO CLIP)

REX TILLERSON, SECRETARY OF STATE NOMINEE: I think the important conversation that we have to have with them is does Russia want to now and forever be an adversary of the United States? Do you want this to get worse or does Russia desire a different relationship? We're not likely to ever be friends. I think as others have noted, our value systems are starkly different.

(END VIDEO CLIP)

BROWNE: Now after that, he actually got into it a little bit with Marco Rubio over whether or not Russian President Vladimir Putin had committed war crimes and the Russian military's intervention in bombings of Aleppo and Syria. Now, he also got into it a little bit with Rubio over human rights abuses in China, the Philippines, and Saudi Arabia.

And after the hearing Rubio said he was non-committal of whether or not he could support Tillerson -- that he would still have to think about it. Now, if Rubio were to defect, the Republicans have such a slim majority in the committee and the overall Senate that could really spoil Tillerson's chances of becoming America's top diplomat.

[05:40:03] Also today, we'll be hearing from Dr. Ben Carson who's appearing before the HUD -- to appear for the HUD Secretary job, as well as Mike Pompeo for Director of the CIA. And, of course, Gen. James Mattis will be appearing in front of the Senate Armed Services Committee so he can see if he can become Trump's first Secretary of Defense -- John.

BERMAN: All right. Ryan Browne for us. And again, that Marco Rubio vote crucial. They have a one-vote majority in the Foreign Relations Committee so it could be the difference between having committee approval or not. Ryan Browne, thanks so much.

BROWNE: Absolutely.

ROMANS: All right. Donald Trump, again, warning yesterday companies that move jobs to Mexico.

(BEGIN VIDEO CLIP)

TRUMP: What really is happening is the word is now out that when you want to move your plant to Mexico or some other place, and you want to fire all of your workers from Michigan and Ohio and all these places that I won, for good reason, it's not going to happen that way anymore. You're going to pay a very large border tax.

(END VIDEO CLIP)

ROMANS: A very large border tax, something that could be part of tax reform if and when that happens. You know, these threats have changed the tone for U.S. businesses and they're already adapting. Now, Trump pledging to help Americans sidelined by the global economy -- that's what this is all about -- but he hurts his argument when he says things like this.

(BEGIN VIDEO CLIP)

TRUMP: Ninety-six million really wanting a job and they can't get. You know that story -- the real number. That's the real number. So, that's the way it is.

(END VIDEO CLIP)

ROMANS: That's not the real number. Here are the facts. Some 93.8 million people are not in the labor force. They're not in the labor force, but the vast majority of them do not want a job. They are not looking for work, as he said. Wanting a job, as he said. Forty-four million are retired. Others are disabled. Others are taking care of a family member or they're in college. That leaves about eight million people either working part-time but want a full-time gig or have stopped looking, but want work. Add to that the 7.5 million that are unemployed -- officially unemployed. You're talking about, at most, 16 million Americans, he said, who are wanting a job and can't get one.

It's one of those cases where we're talking about policy prescriptions. How are you going to mix -- match skills with the open jobs that we have? How are you really going to revitalize the American labor market when you blanket say there are 96 million people right now who are wanting a job and can't get one? That's just not true. It overstates the extent of the problem and also it takes away important conversation from where the problem is.

BERMAN: Exactly. Look, the unemployment number may understate the economic uncertainty and concern in the United States --

ROMANS: Exactly.

BERMAN: -- but the number he is using is 80 million off. It is way off.

ROMANS: And I don't know how that's helpful. I don't know how that helps the argument.

BERMAN: All right. We're going to come and we're going to talk about all the political events going on. Eugene Scott joins us next.

(COMMERCIAL BREAK)

[05:46:25] BERMAN: We have a lot going on today.

ROMANS: Really?

BERMAN: We have new hearings for Donald Trump's picks for the cabinet. We also are living in the wake of this news conference from Donald Trump, the first in six months, having a lot to do with the reports about this intelligence. This two-page summary that was given to Donald Trump by intelligence officials, claiming to have some kind of material on Donald Trump that Russian intelligence says.

ROMANS: They didn't -- they didn't verify it. They didn't say it was verified -- that they'd verified it.

BERMAN: Absolutely.

ROMANS: They just said it was important enough to include as context in the briefing for the president and president-elect.

BERMAN: That is exactly what they said. Joining us now to discuss all of this, "CNN POLITICS" reporter Eugene Scott. Eugene, thanks so much for being with us.

EUGENE SCOTT, CNN POLITICS REPORTER: Thank you, guys.

BERMAN: We also had the news conference yesterday --

SCOTT: Right.

BERMAN: -- where Donald Trump would not confirm that he was given this information by intelligence officials. And last night with Anderson Cooper, Kellyanne Conway would not either, despite being pressed several, several times -- listen.

(BEGIN VIDEO CLIP)

ANDERSON COOPER, HOST, CNN "AC 360": I'm trying to figure out from you what could say --

KELLYANNE CONWAY, INCOMING WHITE HOUSE COUNSELOR: Well, here's what America thinks. COOPER: -- about what is true and what is not, and you cannot -- you cannot take issue with any specific that we have reported. I've yet to hear you say specifically that is not true.

CONWAY: It's not true and here's the deal.

COOPER: It's not true that those were in the briefing documents?

CONWAY: Here's what is true.

COOPER: It's not true that was -- it's not true that that was in any of the briefing documents? You're saying that categorically? And how do you know that?

CONWAY: It's true that you have no evidence of it other than unnamed sources who don't have the briefing documents. That's what's true because they would not have access to the briefing documents and you know it.

COOPER: Well, if you don't know who the sources are, but we have multiple sources -- and again, this is something also that "The New York Times" --

CONWAY: Have them to come forward. Tell them they can have this chair anytime. Tell them to come forward. Why are you unnamed? Who are they protecting, except Democrats --

COOPER: This is a red herring. You're just -- it's like you've got --

CONWAY: No. Anderson --

COOPER: You're trying to distract from my question, which is you do not have information --

CONWAY: No. Anderson, you can use words --

COOPER: -- whether it's true or not.

CONWAY: -- like pivot, distract, red herring all you want. The fact is that the media have a 16 percent approval rating for a reason, it's been earned.

(END VIDEO CLIP)

BERMAN: Now, Director James Clapper came forward overnight.

SCOTT: Yes.

BERMAN: He said he had a phone conversation with Donald Trump where he told Donald Trump that "part of our obligation is to ensure the policymakers are provided with the fullest possible picture of any matters that might affect national security." He was explaining why the Intelligence Community gave Donald Trump this two-page summary, which is significant. SCOTT: It is significant and the Intelligence Community was just trying to be helpful. And I think we saw Clapper come out the way he did last night because we are seeing an increasingly contentious relationship between the Trump team and the Intelligence Community in a way that we just have not seen in previous administrations to come. And if that is not solved we all think Americans are the ones who will suffer most because what we're talking about is national security.

ROMANS: Talking about national security, the Trump team has been at war with the Intelligence Community, at war with the press, as you can see clearly from yesterday, and a lot of other sort of pillars of democratic institutions in this country. You know, I was hearing Frank Sesno last night talking on Anderson's show about how he feels as though this antagonism from the Trump team to journalism, in particular, is to inoculate itself against scrutiny and maybe criticism going forward. What do you make of that?

SCOTT: I think that's certainly true. We've seen Donald Trump repeatedly attack CNN throughout his campaign and I think he's hoping that his supporters will hear him and dismiss our reporting. But we have not seen and we have repeatedly asked them yesterday in person, on air, and on our website to specify what it is that was inaccurate about our reporting, and they weren't able to do so.

BERMAN: So the headline in Christine Romans' "Wall Street Journal" --

ROMANS: Yes.

BERMAN: -- about the Rex Tillerson hearing yesterday was "Tillerson Signals Hawkish Approach", talking about to Russia. In some ways he did more hawkish than President-elect Donald Trump, but in other ways he didn't seem to satisfy one of his harshest questioners, Republican Sen. Marco Rubio -- listen.

[05:50:00] (BEGIN VIDEO CLIP)

SEN. MARCO RUBIO (R), FLORIDA: Is Vladimir Putin a war criminal?

TILLERSON: I would not use that term.

RUBIO: Based on all this information and what's publicly in the record about what's happened in Aleppo and the Russian military, you are still not prepared to say that Vladimir Putin and his military have violated the rules of war and have conducted war crimes in Aleppo?

TILLERSON: And those are very, very serious charges to make and I would want to have much more information before reaching a conclusion.

(END VIDEO CLIP)

ROMANS: A more hawkish approach, except for that.

BERMAN: Except for that.

SCOTT: Except for that. And I think the reason why that is a problem is we weren't looking mainly at Rex Tillerson, head of ExxonMobil. We were looking at Rex Tillerson, soon to be head hopefully, to the Trump campaign, of Secretary of State -- the State Department -- and how he views Russia is very important. And his refusal to speak very clearly about them in relation to war and their activities was concerning to Rubio. I do think it's noteworthy, though, that he did very clearly say that we have very different values from Russia and that we aren't their friends.

ROMANS: Yes, that was -- that was a dramatic moment, I thought, too.

SCOTT: Yes.

ROMANS: All right. Thank you so much. Nice to see you, Eugene.

SCOTT: Thank you, guys.

ROMANS: All right, let's take a look at what's coming up on "NEW DAY". Chris Cuomo joins us now. Good morning, Mr. Cuomo.

CHRIS CUOMO, CNN ANCHOR, "NEW DAY": Interesting conversation that you're having here. You've got to think of it this way. It's easy for Rubio to play strong about Putin as a war criminal. There's no price for that with his political rhetoric --

ROMANS: Right.

CUOMO: -- but imagine the Secretary of State saying, without any tribunal giving an official finding, that the head of another sovereign is a war criminal.

BERMAN: John Kerry wouldn't say that directly, by the way.

CUOMO: There you go.

BERMAN: Yes.

CUOMO: John Berman, well said. So, what do we have this morning? The director of the National Intelligence is reaching out directly to the president-elect. Why? He said he doesn't like the leaks and he also wanted to reiterate what he called the synopsis. Why they included it, why they brief the president-elect on it, and what its status is in terms of the value of its intelligence. We're going to take you through all of it not just because it validates all of CNN's reporting, but because what it means about what the state of play is between the president-elect and the intelligence agencies.

Plus, the Senate taking the first step toward repealing Obamacare in a marathon session. We're going to talk to senators on both sides of the aisle. Do they know what they're doing there, yet? That's what we have for you this morning.

ROMANS: Busy night and busy morning. Thanks so much, Chris Cuomo. All right. One of the largest insurers in the country isdropping coverage of the EpiPen. We tell you why. I'm going to tell you what alternative it is offering when we get a check on CNN Money Stream, next. (COMMERCIAL BREAK)

[05:55:45] BERMAN: Before Charleston church shooter Dylann Roof was formally sentenced to death, family members of the nine black parishioners that Roof killed addressed him directly in court. Afterwards, one of the victim's families talked to reporters about the need to confront him.

DANIEL SIMMONS, JR., FATHER KILLED IN CHARLESTON CHURCH MASSACRE: It was important that I address not just the Dylann Roof, but address the spirit that dwelled within him. So I wanted to speak to the inner person, not the outer shell. And so I did achieve getting him to look up and to pay attention to what I was saying.

BERMAN: He'll also face the second state trial where he also faces the death penalty. No trial date for that has been set.

ROMANS: All right, 56 minutes past the hour. It's that time to talk about the CNN Money Stream, folks. Investors have a lot of questions after Donald Trump's news conference yesterday. It's putting the Trump rally at risk. Dow futures lower right now. Shares in Europe retreating. Stock markets in Asia closing mostly lower.

Forget Trump rally. For drug stocks it was a Trump flump. Look at the timing here. Drug stocks tanked starting at 11:20 a.m., precisely when Donald Trump said in his news conference the industry has been disastrous. He's vowed to cut drug prices and stop drug companies from moving overseas.

One of America's top health insurers is dropping coverage of the EpiPen. Cigna says the name-brand version of the lifesaving drug is just too expensive. You may recall the outrage earlier this year over the price. It is up 400 percent since 1009. Cigna will cover the cost of the generic version which launched in December. That's about half the price of the name-brand version, about $300 for a two-pack.

Six Volkswagen executives indicted for their role in the emissions scandal. The U.S. Justice Department says it had significant responsibility overseeing engine development and serving on the management board. Those who were indicted are all German citizens. They are charged with conspiracy to defraud the U.S. and American customers and violating the federal Clean Air Act, which regulates harmful emissions from cars.

Volkswagen also finalized the deal we told you about yesterday. Volkswagen will pay the Justice Department $4.3 billion in fines and it will take the unusual step of pleading guilty to criminal charges. That, I think, shows you the magnitude, John Berman, of just what this scandal was all about.

BERMAN: You were talking about drug prices and what Donald Trump had to say about this --

ROMANS: Sure.

BERMAN: -- in his news conference. One of the undercovered things that he said was maybe he hinted that Medicare should start negotiating directly with drug companies over, you know, bulk purchases of drugs, which is something Republicans have opposed in the past.

ROMANS: Right.

BERMAN: We're not sure if that's what he meant but if he did, that would be a major, major policy shift, and one that is worth asking more questions about this morning.

ROMANS: It is, and it's one reason why so many of those drug investors were so concerned yesterday.

BERMAN: Right.

ROMANS: Drug stock investors. All right. Thanks for joining us. I'm Christine Romans.

BERMAN: I'm John Berman. "NEW DAY" starts right now.

(BEGIN VIDEO CLIP)

TRUMP: Does anyone really believe that story?

BERMAN: James Clapper reassuring Donald Trump that leaked intelligence was not an inside job.

TRUMP: It's all fake news. It's phony stuff. It didn't happen.

CONWAY: I know CNN is feeling the heat today.

COOPER: I think you guys are feeling the heat.

RUBIO: Is Vladimir Putin a war criminal?

TILLERSON: I would not use that term.

MANU RAJU, CNN SENIOR POLITICAL REPORTER: Are you prepared to be the one Republican to vote no?

RUBIO: I'm prepared to do what's right.

SEN. MIKE ENZI (R), WYOMING: The Obamacare bridge is collapsing and we're sending in a rescue team.

SEN. BERNIE SANDERS (I), VERMONT: This is irresponsible. This is dangerous. This should be defeated.

TRUMP: Don and Eric are going to be running the company.

SEN. ELIZABETH WARREN (D), MASSACHETTS: What he is describing does not resolve the conflicts of interest.

TRUMP: If they do a bad job, I'll say you're fired.

(END VIDEO CLIP) ANNOUNCER: This is NEW DAY with Chris Cuomo and Alisyn Camerota.

CUOMO: We want to welcome our viewers in the United States and around the world. This is your NEW DAY. It's Thursday, January 12th, 6:00 here in New York.

And up first, America's top intelligence chief reaching out to Donald Trump. James Clapper trying to reassure the president-elect that the Intelligence Community did not leak an unsubstantiated dossier that sparked a firestorm of controversy for Trump. Clapper issuing a rare statement saying he's profoundly dismayed by the leaks.

ALISYN CAMEROTA, CNN ANCHOR: Meanwhile, the president-elect blasting journalists in his first press conference, though finally conceding that Russia was behind the election hacks. All of this as Senate Republicans make a step closer -- get a step closer to dismantling Obamacare. We are eight days from Inauguration Day, so let's begin our coverage with CNN's Evan Perez. He is live in Washington.