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INSIDE POLITICS

Trump Vows More with Less; Plan Cuts Non-Defense Spending; Trump Talks about Obamacare; Bush Cautions about Power; Returning Powers to States; Trump Speech to Congress; Trump Meets with Insurance CEOs. Aired 12-12:30p ET

Aired February 27, 2017 - 12:00   ET

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


[12:00:00] JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: Extremely interesting on Flynn's contacts - as you know, national security advisor lost his job over this - contacts with Russians during the transition, the suspicion about sanctions.

KATE BOLDUAN, CNN ANCHOR: Yes.

SCIUTTO: Nunez said, well, if it was about big sanctions on Ukraine, that would have been bad.

BOLDUAN: Exactly (ph).

SCIUTTO: If it was about Obama sanctions -

BOLDUAN: Right.

SCIUTTO: Maybe that would be acceptable. That's an interesting distinction if he sticks to it.

BOLDUAN: Well, he even called - and he even - and he even called what - what - the sanction from Obama petty and he didn't consider those sanctions, yes.

SCIUTTO: Exactly. And he said - he said you guys are calling them sanctions. I said actually it's the White House counsel who called them sanctions. But, anyway, interesting press conference.

BOLDUAN: Absolutely.

Jim Sciutto, great to see you. Thanks, Jim.

SCIUTTO: Thank you.

BOLDUAN: Thank you so much for joining us AT THIS HOUR, everybody. "Inside Politics" with John King starts right now.

JOHN KING, CNN ANCHOR: Thanks, Kate.

Welcome to INSIDE POLITICS. I'm John King. Thanks for sharing your day with us.

A big day and a big week for President Trump. The outline of the first Trump budget is being rolled out today. It keeps campaign promises to spike up military spending, while keeping hands off Social Security and Medicare.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: This budget will be a public safety and national security budget, very much based on those two, with plenty of other things, but very strong. And it will include a historic increase in defense spending to rebuild the depleted military of the United States of America at a time we most need it.

(END VIDEO CLIP)

KING: Also on the president's plate this week, a big speech to Congress, big Obamacare decisions and take two on the travel ban.

(BEGIN VIDEO CLIP)

GOV. SCOTT WALKER (R), WISCONSIN: General Kelly spelled it out. It's not about religion. It's not even about nation of origin. It's about the previous administration, under President Obama, the Congress, clearly identified that these were at least seven nations where this federal government, under the previous administration, didn't feel confident that they could get accurate information about the people coming in from those countries.

(END VIDEO CLIP)

KING: And a supporting role of sorts for the president at last night's Oscars.

(BEGIN VIDEO CLIP)

GAEL GARCIA BEMAL, ACTOR: As a Mexican, as a Latin American, as a migrant worker, as a human being, I'm against any form of wall that wants to separate us.

(END VIDEO CLIP)

KING: With us to share their reporting and their insights, Laura Meckler of "The Wall Street Journal," CNN's Manu Raju, Matt Viser of "The Boston Globe," and CNN's Nia-Malika Henderson.

A lot to digest. Let's begin with some quick takes on the big stories driving politics today, including this, a brand new first Trump budget outline that boosts military and homeland security spending and slashes funding from any domestic programs.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: This defense spending increase will be offset and paid for by finding greater savings and efficiencies across the federal government. We're going to do more with less. We're going to do more with less and make the government lean and accountable to the people. We can do so much more with the money we spend. With $20 trillion in debt, can you imagine that, the government must learn to tighten its belt. Something families all across the country have had to learn to do, unfortunately, but they've had to learn to do it.

(END VIDEO CLIP)

KING: A new president's first budget tells us a lot about what he wants to do, the direction of the country, the direction of the government, the philosophical underpinning, if you will. What's the big headline from what we're learning about this one?

LAURA MECKLER, "THE WALL STREET JOURNAL": Well, I think we've heard the headlines, increasing military spending, cutting pretty much everywhere else. But I think that the secondary point that we really need to keep in mind is that this - the budget does not - at least the outline of this budget seems highly unrealistic. The idea that you can increase spending by such a dramatic factor at the Pentagon, at the Department of Homeland Security, and find all those savings just through the domestic discretionary spending without even touching Social Security or Medicare, I don't even think there are many Republicans, not to mention Democrats, on Capitol Hill who are going to be willing to come out there and say, yes, this is - this is - this is doable, no problem. I'm not - I'm not really sure that President Trump is really tethering these to - to the math that he faces and a lot of frustration among Republicans that he isn't willing to take on entitlements, which is where the real drivers of the budget are.

KING: But - but he boxed them in during the campaign on this. He was an un-conservative Republican, if you will, or very different kind of Republican. Speaker Ryan has made his name for (ph) - you want to bend the budget arc back to a balanced budget, you want to bend the long- term debt arc back down, you have to deal with entitlements. President Trump says, don't touch.

MANU RAJU, CNN SENIOR CONGRESSIONAL REPORTER: Yes, that's right. And he's clearly, with this budget, trying to win over those defense hawks in Congress, people like John McCain, Lindsey Graham, who have been in frequent war with this president over this issue of increasing spending. He's going to win over them on this argument. But when you start getting into serious, significant tens of billions of dollars' worth of cuts to those domestic discretionary programs, you're going to have pushback from Republicans as well. There are a number of Republicans that want to say they would cut spending, but there are key programs that are important for individual states, individual districts. So it's going to start a big war with Congress.

But the one thing also is that this is just a first budget. There is going to be a supplemental appropriations bill that they're going to send to Congress afterwards that will increase spending for things like the wall, others issues like that. So there are going to be tens of billions of more dollars that are going to be spent on the domestic side and that is also going to cause some concerns because at the end of the day it probably will increase the deficit.

[12:05:18] MATT VISER, "THE BOSTON GLOBE": One of the interesting thing too, Trump, in his business background, was the king of debt. You know, a thing that he sort of wore, you know, with - with, you know, sort of showy pride, you know? And he could do that as a businessman and over leverage things. He can't do that as a government executive.

So I think this is the first time, like Laura was saying, how does the math add up? What sorts of things is he going to cut? And also getting pushback from Democrats, you know, pretty fiercely on some of the things that he's going to be targeting, I think, in his budget to try and make this work.

KING: Right. And one of the things he can't do with the stroke of a pen, and he can't do with a speech, this is going to have to be a negotiation. First and foremost, with Republicans, who have some significant difference with their president, and then one would assume at least try to get some Democrats.

NIA-MALIKA HENDERSON, CNN SENIOR POLITICAL REPORTER: Yes. I mean, who, on the one hand, must be pleased that he's not going to touch Medicare and Social Security. There are ads that are running from progressive groups about holding him to that promise. So in that sense, I think this budget, on the one hand, you've got hawks who are going to be pleased with this explosion in terms of spending on Pentagon and the military, but then you're going to have progressives who are wondering what's going to happen with the EPA, as well as the State Department. I mean some of the reports are saying that the state Department could face something like 30 percent cuts across the board. I don't know if Tillerson is aware of that, but it sort of -

KING: Well, he's meeting with the president today.

HENDERSON: Yes. I think that underscores where he's been all along in terms of this administration and being sidelined in terms of his responsibilities. I think a lot of the cuts are going to be to foreign aid. But foreign aid is like 1 percent of the budget.

KING: Right.

HENDERSON: It's nothing. It's kind of a favorite hobby horse of people who say we should cut spending, but really it's not much of a federal budget at all.

KING: One thing, if you're serious about spending, you can't do it there.

Hold the thought on the budget. We'll come back to it, but I want to move on. That's one of the big challenges. A, what does the president want to do, where does he want to cut, where does he want to add, how does he negotiate with the Congress? As he's doing that, he's going to have to play out a huge debate, which is what to do about Obamacare. The president, speaking to the nation's governors this morning, lamenting the fact he says this is what happens. He said at the end of the Obama presidency, President Obama's approval rating went up. He says now that people think they're about to take Obamacare away, guess what, and the polling backs this up, people like it more.

(BEGIN VIDEO CLIP) DONALD TRUMP, PRESIDENT OF THE UNITED STATES: People hate it, but now they see that the end is coming, and they're saying, oh, maybe we love it. There's nothing to love. It's a disaster, folks, OK?

(END VIDEO CLIP)

KING: He sees - he's a great communicator, and he speaks in his way. But, you know, as he - as he talks about this, again, this is not something he is going to be able to solve with his words and with - he can frame a debate with his words, and he's very, very good at that, and that will be important going forward, but he's meeting with the governors today. They have some issues. Republicans and Democrats alike have some questions about how to do this. He's going to have the speaker of the House and the Senate majority leader down in about an hour or two to talk to him about that big speech tomorrow night because they want some health care help from the president there.

And then again, you have a lot of conservatives saying, hey, why didn't we do this out of the box? We have a Republican Congress, a Republican president, we promised to repeal Obamacare, do it already.

RAJU: And when we have - we talk about entitlements, this is going to be a central question on, say, Medicaid, for instance. It's a big sticking point of these negotiations with these governors that are there. A number of - 31 states have expanded Medicaid under Obamacare. Do they go? Do they actually touch the Medicaid program and turn it into a block grant program, like a lot of conservatives want? But a lot of those states with Republican governors, like, say, Ohio, for instance, they are concerned about going that route. How does Donald Trump come down on key central issues that are essential for this - for Republicans to cut a deal? We don't know that yet. We'll see how specific he gets tomorrow.

VISER: And also like how much can he be swayed? I mean we saw from John Kasich meeting with him on Friday, and sort of - Trump is sort of going along with whatever Kasich is proposing.

HENDERSON: Yes. Right.

VISER: You know, and so I don't think that he is articulating - he keeps talking about the plan will be beautiful. You'll love it, you know, but he hasn't articulated what that is. And so I think there's room for debate over how to influence Trump for what he does.

KING: He's also set up a huge risk for himself because in the campaign, and Republicans don't like this, he's boxed them in. He says, you know, up to age 26 you should be able to stay on your parent's thing. The insurance marketplace never again should be able to rule you out if you have a pre-existing condition. Again, we'll dive deeper on this one in a few minutes.

But I want to quickly get to one other thing that's buzzing in politics today, the return of George W. Bush. Mostly silent for the eight years of Democratic President Barack Obama's term in office, but in an interview with NBC "Today," the former president of the United States, the 43rd president of the United States, asked what he thinks about President Trump's attacks on the news media.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, FORMER U.S. PRESIDENT: Power can be very addictive, and it can be corrosive, and it's important for the media to call to account people who abuse their power, whether it be here or elsewhere. One of the things I spend a lot of time doing was trying to convince a person like Vladimir Putin, for example, to accept the notion of an independent press.

[12:10:11] MATT LAUER, NBC "TODAY": Right.

BUSH: And it's kind of hard to, you know, tell others to have an independent free press when we're not willing to have one ourselves.

(END VIDEO CLIP)

KING: Beyond very interesting.

HENDERSON: Yes, and so key, I mean that point that he's making about American presidents go - traveling overseas and essentially lecturing other countries about the importance of a free press. This president can't really do that because he's already declared the media as an enemy of the people. And this idea - I mean he said power can be addictive and corrosive. I mean those are strong words that are arguing for -

KING: Especially because he has tried religiously to stay out of this.

HENDERSON: Exactly.

KING: Because he's a member of that exclusive club and he thinks former presidents shouldn't get in the grill of current presidents.

VISER: And using Putin probably no accident there either.

HENDERSON: Right.

VISER: But, you're right, I mean when the American press travels to other countries, there's always fights for access with foreign governments, and you can't - and Trump has not yet gone on a foreign trip, but imagine those disunions taking place and will this administration fight for access? I mean -

KING: I got carried out of the room once or twice at the Kremlin.

MECKLER: I thought that there was another interesting moment in that interview with George W. Bush where he was - they talked about the ban on people from these seven Muslim majority countries coming here. And the "Today" show played the clip of George W. Bush after 9/11 where he said we are not at war with the - with the Muslim religion. That it's the people who did this - you know, terrible acts on 9/11 were not religious people. And he spoke very generously about that and said they're our allies are - many Muslim allies. And as the clip was playing, you could see George W. Bush's face sort of smiling where I got the sense where that he was proud of that. KING: Right.

MECKLER: You know, he's proud of that moment that he took that position. And, obviously, it's a very different point of view that we have coming out of the White House today.

KING: More on the former president returning (ph) up to. A lot to discuss in the hour ahead. Stay put.

Up next, the deeper dig on the president's budget ideas and his challenge in selling them to Congress and to you.

(COMMERCIAL BREAK)

[12:16:08] KING: Welcome back.

The numbers don't lie, and most of the numbers aren't good as President Trump prepares for a big moment tomorrow night, a primetime speech to a joint session of Congress. His early job performance ratings are historically bad. Doubts about his leadership skills are on the rise. Just six weeks on the job, this speech now a rare second chance to make a first impression. And the president will outline a new budget he says will shift power back to the states and keep his big campaign promises.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: We're also going to do whatever we can to restore the authority of the states when that is the appropriate thing to do. We're going to give you back a lot of the powers that have been taken away from states and great people and great governors. And you can control it better than the federal government because you're right on top of it.

(END VIDEO CLIP)

KING: Conservatives, especially Republican governors, will love that line. They believe too much power, too much authority, too much regulatory enforce the semi-colons is here in Washington and it should be given back to them. Although several Republicans worry that if you pass a budget that gives them more power and shifts the money and the decisions to them, what happens next year? If the economy takes a bad turn or if the president decides I want to give that program less money? How important is this moment tomorrow night?

MECKLER: Well, it's important on so many different levels. I mean it's important on the policy level, what you just outlined and what the future of health care is going to be, what the budget's going to look like, all of those things. But I think it's something else that's really important about this, which is that, you know, he has not done what traditionally presidents do, which is sort of pivot from campaign mode into leadership mode, into sort of presidential mode, if you would, where you sort of try to bring people together. You're no longer, you know, nursing wounds from the campaign, but, you know, reaching out, olive branches to your former rivals and trying to bring them aboard. And we haven't seen that. And then we've also seen him talking repeatedly, I think, he said over

the week, this has been - you know, this job has been fun. I have accomplished everything that I wanted to accomplish.

HENDERSON: (INAUDIBLE).

MECKLER: Like he's basically made it sound like it's been easy, as opposed to, none of this is easy. I don't care who you are. None of this is easy. These are all hard decisions. And I think what we need to look for is, is he going to grapple with that? Is he going to say, you know, yes, we have our trade-offs for these things, and this is how I'm going to try to - going to walk through that mine field. So I think that both of those are signs of a little more maturity in the job and we'll see if we see any of that tomorrow night.

KING: Right. You know traditionally presidents reach out to those who didn't vote for them, reach out to the other party. But this White House, I think, has made a calculation, and there are plenty of numbers and smarts people to support the calculation, that he's not going to get those people, at least not in the short-term. So he needs to keep his 40 percent. He needs to keep his campaign promises. He needs to stay laser focused on his group.

And to his credit, like him or not, he has at least - he has, out of the box, shown great fidelity to his campaign promises. But you make an important point, signing executive actions or talking about them doesn't change the law, doesn't change the policy, doesn't move the federal government. How important is this?

RAJU: I mean it will be interesting to see what his tone is tomorrow night. Is it more conciliatory in any way? Does he show some signs of humility? Does he reach out? We know that's a difficult thing for the president. Does he reach out to Democrats in any way? Does he recognize how difficult it will be to get something done without significant bipartisan support?

He has done things on an executive level, but a lot of these are task force to study issues or -

HENDERSON: Yes.

RAJU: You know, pull back some regulations, but that takes a while to go through the whole regulatory process or give a little flexibility on Obamacare, also things that will take a while. He knows Congress is a place where he can get significant things done in his agenda, or they could brush him back and he could really be stymied. So how much does he try to reach out, how much does he try to recognize the challenges ahead?

KING: And what's the calculation about who's the most important audience? You have Republican skeptics under that dome, who disagree with him on issues, or they don't like some of this spending, they wanted to touch entitlements, they wanted it to be a more traditional Republican. You have Democrats who, since the election, have frankly - and now after this past week when they've been home, they're - they're, no, no, Donald Trump says, you know, eggs for breakfast, they say, no. Donald Trump says nice sunrise, they say no. The Democratic base says say no to everything.

[12:20:04] And then you have the American people watching at home. Never mind the global audience, but people watching at home who are still trying to get to know this president. One thing working in his favor, his approval ratings are in the tank, but the NBC/"Wall Street Journal" poll asked about his policies. Do you approve or disapprove of Donald Trump's policies? Forty-seven percent approve, 50 percent disapprove. So under water, but that's a pretty even split.

HENDERSON: Yes.

KING: A much more traditional split than when you ask them about Donald Trump.

HENDERSON: Yes, and another - and other numbers, I mean the stock market is almost at 21,000, gas prices are great, we're almost at full employment in terms of the unemployment rate. So I think he's got some fertile ground here. I think the people he needs to reach out to in many ways are those Republicans, right? I mean he's been signing executives orders, hasn't really reached out to the Republicans in Congress who are skeptical of him, those Trump state Democrats as well, people like Heidi Heitkamp and Manchin who are going to be up for re-election and in those tough states. So - and the American people.

But, again, I think they are smart to focus on that 44 to 45 to 46 percent or whatever that is their base. He keeps talking about wanting to keep his promises. So I don't think we're going to see a president who all of a sudden is different from the man we've seen over these last many months.

VISER: Inside those numbers was an interesting split where 17 percent of people said that they don't like him personally, but they do like his policies. And that's a greater number than has ever been polled in this survey.

KING: Right.

VISER: So that's an interesting point for tomorrow night. I mean reaching people who don't like him personally but do support the things that he wants to do is a - is a big challenge for this president. And I think that the other thing going into tomorrow night, it is a very scripted event, and perhaps the most scripted in politics. And he doesn't often do well with scripted events. You know, he likes that free-wheeling style. So you can imagine those moments with Democrats not standing up or sort of that interplay that I think he feasts off of will be interesting in that room.

RAJU: And will it have -

KING: That's a great - it's a great point about what's the mood in the room going to be like? A number of Democrats boycotted the inaugural. We don't get a sense there are any big boycotts here. We expect them to come. Some of them are bringing guests to try to get in his face (INAUDIBLE).

HENDERSON: Yes.

KING: But I think to you point, and forgive the language here, but his great trump card is that voters want change in Washington. And he can stand up there as president and look down at them, but my question is, how much will he say they're a part of the problem before you jump in. Here's Nancy Pelosi, the leader of the House Democrats, she is trying to make the point that, yes, he seems very busy, but what's he done for you?

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI (D), MINORITY LEADER: He has no jobs bill, so he's got to talk about the press. He has no jobs bill, so he has to talk about kids - transgender kids in school. He has no jobs bill, so he has to talk about immigrants and have a ban on Muslims coming into the country. So all of this is a deflection from the fact he has done nothing.

(END VIDEO CLIP)

KING: Safe to say he's not going to have a lot of Democrat support at all tomorrow night.

RAJU: Yes. I don't think there will be many standing ovations from the Democratic side.

Getting back to, though, your point before, will he - this - what happened to the whole drain the swamp agenda? This was one of the first things that he was going to do, term limits, things to really reign in members of Congress. Will he talk about that there? Will he go after the people in that room or will he realize that he needs the people in that room to get his agenda through?

KING: Right.

MECKLER: I think one more important point to think about this, in regard to that polling finding about people who like his policies, is that most of these policies are not yet policies. They're more like proposals in the form of executive orders. So we'll have to see, what does this really look like?

KING: Right.

MECKLER: So when you actually go out and try to repeal the Affordable Care Act, the Republicans are finding and will continue to find that it is very difficult to do, very difficult to do.

KING: Right.

MECKLER: And the same thing with immigration policies. You know, he talked about this border wall. Well, you know, it's a $20 billion project that, you know, even Texas Republicans don't support. So, I mean, it's a - it's not something that's going to be easy to do. None of this is easy to do. So I think it's going to be - at some point he's going to run up into some barriers with that (INAUDIBLE). KING: That's a governing challenge. But, again, whether you like him

or not, to his credit, he has changed the - he is setting the tone of the conversation in Washington.

MECKLER: Yes, for sure.

KING: He is - he e is deciding what Washington talks about, what issues Washington talks about. We'll see how it plays out. A big moment tomorrow night.

Everybody sit tight.

The president calls in insurers and promises governors they'll be happy with this Obamacare replacement plan. So what's in it?

(COMMERCIAL BREAK)

[12:28:20] KING: Welcome back. A little flashback here. Remember this line? If you like your plan, you can keep it. Well, it turned out not to be true. And now that President Trump has inherited President Obama's health care law, the new administration wants to make sure Americans don't forget how we got here.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Since Obamacare went into effect, nearly half of the insurers are stopped and have stopped from participating in the Obamacare exchanges. It has gotten so bad that nearly 20 million Americans have chosen to pay the penalty or received an exemption rather than buy insurance. That's something that nobody has ever heard of or thought could happen, and they're actually doing that rather than being forced to buy insurance. We must work together to save Americans from Obamacare. And people know that and - everyone knows that at this point.

(END VIDEO CLIP)

KING: Everyone knows that. Everyone knows that, and everyone - if you have any memory of the last debate when they implemented or passed Obamacare, it's pretty complicated, both from a policy perspective and from a politics perspective.

HENDERSON: Yes.

KING: We're at that moment. That was the president's meeting of insurance. He brought some CEO's of insurance companies down into the White House. And he's right, a lot of those companies have pulled back, or at least limited their involvement with the Affordable Care Act. He had governors earlier today, and he's going to be sitting down, Manu, I think in about two hours with two principle stakeholders in this debate, the Senate majority leader and the speaker of the house.

There are a lot of plans out there. There's a lot of stuff being tossed around. What do we know about, a, what the White House wants to do, and, b, what the congressional leaders would prefer that it do? RAJU: Well, they need Donald Trump to give political cover to whatever

plan they come out with. You know, Trump says they're going to put out a plan, but really it's the congressional Republicans who are drafting this plan privately. They're consulting with the White House or consulting with Tom Price at HHS. They're consulting with the governors, who are actually trying to cut a deal on this Medicaid piece of it.