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EARLY START

Health Care Pivot; Comey Meets with Congress; South Korea's President Impeached. Aired 4-4:30a ET

Aired March 10, 2017 - 04:00   ET

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


[04:00:10] DAVE BRIGGS, CNN ANCHOR: The White House ready for an earlier rollback of Medicaid for millions to win over conservatives. But will those efforts cost the votes they need to pass the health care bill?

CHRISTINE ROMANS, CNN ANCHOR: And the FBI director behind closed doors with top members of Congress. What did he say about Russian meddling in the election as questions of links between the Trump organization and a Russian bank? A mystery.

Good morning --

BRIGGS: Odd story.

ROMANS: Yes, it is. Welcome to EARLY START this Friday morning. I'm Christine Romans.

BRIGGS: I'm Dave Briggs. It's Friday, March 10th, 4:00 a.m. in the East.

My question to you: if you had to be in a meeting for 27 hours as congressmen did, how would you stay awake?

ROMANS: Twenty-seven hours.

BRIGGS: Twenty-seven hours, there's not enough coffee on the planet for me to survive that.

This morning, growing involvement by the White House in negotiations over the Obamacare repeal bill being met with growing resistance from some Republican factions and what looks to be a major pivot, the White House is privately signaling it is open to a big change in the House Republican bill, rolling back Obamacare's Medicaid expansion years sooner than the current proposal. And that's according to two senior officials and a senior House conservative aide.

ROMANS: The shift comes after two House committees signed off on the bill following marathon markup sessions. One ran, that's the famous 27 hours Dave Briggs is talking about.

BRIGGS: Oh, boy.

ROMANS: But with concerns growing about the measure's content and the pace it is being pushed through the House, opponents, Republican opponents, are ramping up their public criticism.

(BEGIN VIDEO CLIP)

SEN. TOM COTTON (R), ARKANSAS: There is no deadline. We need to get health care right and fast. There are a lot of Republicans who are saying the exact same thing in private. I'm simply saying in public what many Republicans are saying that the legislation as it's written, one, probably cannot pass the Senate. But, two, would not solve the problems of our health care system, problems that Obamacare made worse.

(END VIDEO CLIP)

ROMANS: Today, amid a push in the sales campaign for Obama repeal as President Trump meets with key House committee chairman and the vice president sits down with conservative leaders.

Let's get the latest this Friday morning now from CNN's Phil Mattingly. He's on Capitol Hill.

(BEGIN VIDEOTAPE)

PHIL MATTINGLY, CNN CONGRESSIONAL CORRESPONDENT: Now, Dave and Christine, conservatives still very wary about this proposal and not guaranteeing that when it gets to the floor, they'll support it at all. All that does is underscored that there's a lot more work to do.

The reality is this, when you talk to House Republican leadership aides, when you talk to Senate and Republican leaders altogether, they say this is the vehicle moving forward. If they want to repeal Obamacare, that issue that they've campaigned on cycle after cycle, this is the moment to do it.

Now, the biggest issue by far is Medicaid. In the bill, as it currently stands, the Medicaid expansion that came with Obamacare would be rolled back in 2020. What conservatives want is 2017. That is problematic going forward. Still, they haven't here at the White House. The president telling conservative groups that he is not only open to the idea, but would consider trying to act on it. That would be problematic for both the House and Senate, where a lot of moderate senators, a lot of senators from those Medicaid expansion states simply wouldn't go along.

The reality is this: this bill still moving forward. The process, a little bit slow and certainly ugly. But when you talk to Senate leaders and House leaders, they say they'll still get it done -- Dave and Christine.

(END VIDEOTAPE)

BRIGGS: Slow and ugly. Thank you, Phil.

The GOP health care plan is revised to include a faster rollback of the Obamacare Medicaid expansion. Well, that could win over some conservative critics, but it might doom the bill because several moderate House Republicans backing the current measure would then be expected to pull their support.

All this coming after the chief medical officer of the Medicaid program blasted the Republican health care overhaul. Dr. Andre Ostrovsky, defending his own boss at Health and Human Services, tweeting, "Despite political messaging from others at HHS, I align with the experts of the academy of family physicians, the American Academy of pediatrics and American Medical Association in opposition to the American Health care Act."

ROMANS: Health insurers are concerned the Republican repeal and replace bill will leave many low-income Americans unable to afford coverage. Two of the country's leading insurance industry groups calling on lawmakers to revise the plan and provide more assistance. They are worried about millions potentially left uninsured once the Medicaid expansion is rolled back. And that Medicaid expansion is at the heart of the fight with Republicans right now, frankly.

BRIGGS: Yes, this is an interesting debate, right? Do you please the conservatives or moderates who has larger numbers clearly as they're concerned? And that House Freedom Caucus is 29 in the House. You have to please them first.

Meanwhile, investigation into Russia's meddling in the U.S. election heating up this morning. FBI Director James Comey meeting with congressional "Gang of Eight", the eight lawmakers whose have access to the most highly classified intelligence information.

[04:05:01] Members of both parties have been accusing the director of stonewalling them.

We get more now from CNN's Manu Raju on Capitol Hill.

(BEGIN VIDEOTAPE)

MANU RAJU, CNN SENIOR CONGRESSIONAL REPORTER: Good morning, Dave and Christine.

James Comey up on Capitol Hill as part of this growing investigation into Russia and Russia's attempts to influence the election. And also those questions that still remain about those alleged contacts that occurred between Donald Trump campaign associates and people who are tied to the Kremlin in last year's election, during that time of Russian meddling.

Now, Comey met behind closed doors with the top eight leaders in the House and Senate who get the highly classified information. Two separate meetings conducted behind closed doors and also at a time of growing tension between some of those members and the FBI, about whether or not the FBI is giving them enough information for them to conduct their own reviews.

After that briefing, we talked to those members who left. They would not comment. We are trying to learn details about exactly what was discussed. But we do know it's part of this larger effort to figure out what happened and Russia's attempts to influence the elections -- Christine and Dave. (END VIDEOTAPE)

ROMANS: All right. Manu Raju, thanks.

Virginia's Mark Warner, who met with FBI Director Comey on Capitol Hill, he tells CNN the Senate Intelligence Committee is now getting access to the same classified intelligence usually reserved for the "Gang of Eight". Senator Warner sits on the Intelligence Committee. He is the top Democrat investigating ties between the Trump administration and the Kremlin. He wants testimony from all former and current Trump associates who spoke to the Russians and he is not rolling out using subpoenas.

BRIGGS: Four months after early reports of a computer server connection between the Trump Organization and a Russian bank were widely dismissed, an FBI investigation though remains open. Sources close to the probe tell CNN it is now in the hands of the FBI's counterintelligence team, the same one looking into Russia's suspected interference in the 2016 election. One U.S. official said investigators find the server, quote, "odd", but the official said there is still more work for the FBI to do.

ROMANS: Internet records show that last summer, a server owned by the Russia-based Alfa Bank looked up the contact number for a Trump organization server and Alfa server did so far more than any other companies, almost 80 percent of all look ups to the Trump server. So far, there's no evidence of the two servers communicated with each other, there's no allegation of wrongdoing. The FBI declined to comment. The White House did not respond to a request for comment. Odd.

BRIGGS: Yes, it is.

So, what is the Russian bank in question saying about all of this?

CNN senior international correspondent Fred Pleitgen live in Moscow.

Good morning to you, Fred. This story is a tough one to grasp and to dumb down. Is there any accusation that the Trump administration or campaign did anything wrong?

FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, no, there certainly isn't at this point in time. And if you look at the comments made by Alfa Bank, and some of the reactions, they also say that they don't believe that there was any sort of wrongdoing.

Now, what they said in the past to the explanation that they think that they can deliver. They said they also are not sure what exactly was going on there. But they say they believe that some of their executive or some of their other employees may have stayed at Trump hotels and that then in reaction to that, the Trump hotel's server may have sent some sort of spam mail or some sort of advertising mail to an Alfa Bank account. And that that mail setoff their cyber security measures and that in return, a U.S. company they hired to protect their cyber systems would do what's called a DNS look up, which is exactly what you were saying there, is sending out an inquiry as to what the source of that mail list, whether or not that mail is legit, and whether or not there might be malware involved.

Now, Alfa Bank has said that they have investigated all this. They hired a U.S. cyber security firm to investigate all this and they say that they are not exactly clear why this happened. They say the investigation is now closed. But their general statement still is the one they stand by. They say that none of their executives have any sort of -- or anyone else in the bank had any sort of ties to Donald Trump as a businessman or in any other way, shape or form. We contacted them this morning. They have not gotten back to us yet.

BRIGGS: And the reports are, there are more than 2,000 contacts from that server to the Trump server. So, there's a lot to come out of this one. Thank you, Fred.

ROMANS: All right. New EPA chief Scott Pruitt insisting carbon dioxide is not a primary contributor to global warming, a position directly contradicted by leading scientists. Listen to Pruitt's comment to CNBC about the role of CO2 in global warming is drawing fire from Democrats and outrage from environmental groups.

(BEGIN VIDEO CLIP)

SCOTT PRUITT, EPA ADMINISTRATOR: I think that measuring with precision human activity on the climate is something very challenging to do and there's tremendous disagreement about the degree of impact. So, no, I would not agree that it's a primary contributor to the global warming that we see.

(END VIDEO CLIP

[04:10:04] ROMANS: Tremendous disagreement among whom about the degree of impact? Because scientists are pretty united on this. If you go to the EPA's web site, it clearly states carbon dioxide is the primary greenhouse gas that is contributing to recent climate change.

Pruitt slammed by his predecessor at the EPA, Gina McCarthy. She says, "I cannot imagine what additional information the administrator might want from scientists for him to understand this issue."

BRIGGS: Shocking there. International agreement on that one.

Three states have now officially joined Washington state lawsuit against President Trump's newly revised travel ban. New York Oregon and Massachusetts are now part of the suit that alleges the new executive order contains the same principles as the old one, and that White House officials admit their motivations are no different.

The federal judge blocked the first ban in early January. This comes after Hawaii filed a its own motion separate from Washington state for a temporary restraining order to block the ban.

ROMANS: All right. It's jobs day in America and this report is a big one. Four things you need to know about the jobs report that comes out in about four hours and 19 minutes.

Number one, this is the first full jobs report under President Trump. The last report was 11 days of his presidency. So, this is the first full progress report for him. He promises to create 25 million new jobs over the next ten years. That averages 208,000 per month.

Number two, what to expect? CNN Money's survey of economists shows the jobless rate is expected to go down, Dave, to 4.7 percent. That is nearly full employment in this country, 192,000 new jobs added. There's a potential, though, for an even stronger number.

You see that 192,000 on your left, it could be as high as 300,000, some people are saying, because the ADP reported 298,000 private sector jobs alone in February. This report, the government's report do not always mirror each other. But ADP strong enough for some economists to raise their estimates.

Finally, the Fed, a big jobs report today will almost certainly clear the way for the Federal Reserve to raise interest rates again next week. Investigators put the probability of a rate hike at 88 percent. Two weeks ago, it was just 22 percent.

You know, several Fed officials have said the economy is ready. What I want to hear from this administration is if they get one of the best jobs reports in months, if not years, right, something well above 300,000.

BRIGGS: Take a bow or no?

ROMANS: Do you take a bow? Do you take the credit or do you say the numbers are fake? They're not real, as the treasury secretary had said, they're fake, they're phony. As the president had said.

So, they have a chance here to kind of own these numbers that will likely be going in their direction.

BRIGGS: Well, there's historical precedent. Presidents have always taken credit for healthy job numbers.

ROMANS: Yes, they have. And they've also tried to not take -- the president saw these numbers yesterday. He gets a sneak peek with his economic advisor. So, he knows the number already.

(CROSSTALK)

BRIGGS: -- taken a lot of credit for the Dow and S&P, we'll see.

Protests overnight turn deadly in South Korea after the impeachment of the president is upheld. How does this effect the U.S. alliance with Seoul? We are live there next.

(COMMERCIAL BREAK)

[04:17:17] BRIGGS: Breaking overnight: protests turning deadly in South Korea after the court's constitutional court upheld the decision to impeach the country's embattled President Park Geun-hye. The political shockwaves stemming from the vote are likely to be felt across Asia and right here in the U.S.

CNN's Paula Hancocks has the breaking details. She's live in Seoul.

Good morning.

PAULA HANCOCKS, CNN INTERNATIONAL CORRESPONDENT: Hello, Dave.

Well, the country's first female president has now become the first president to be impeached. It is a historic day here in South Korea. There has been differing opinions. This is the pro-Park camp. There is bitter disappointment among the people there that she has been impeached.

There were also pockets of violence earlier on this. There's a clash with police. We know that two people have lost their lives because of these clashes.

It is a lot calmer now. As you can see, there are little pockets of violence that come and all of these police just coming in. These riot police trying to calm the situation down.

This just shows how high emotions are running here. There is an absolute fury among these protesters that their president has been impeached. They don't believe it should have happened.

You can see how frustrated people are. It sparks quickly seemingly out of nothing. Tempers are really frayed here on the streets of Seoul.

This is not indicative of the whole of Seoul, the whole of South Korea. There are people who are incredibly happy that Park Geun-hye has been impeached. Some people coming out on the streets saying they wanted her to go. And so, many -- they were tears of joy, there was jumping and down and cheering. Of course, here, there is big disappointment.

BRIGGS: Paula, thank you. A fascinating breaking story at the moment in South Korea.

And, Christine, this is a huge story. One, this is a corruption scandal. Again, the first female president and first ever impeached in South Korea at the heart of this corruption charged that she forced corporations to give millions of dollars to foundations she runs, the allegations. Now this opens the door for criminal now she doesn't have the protection of the office.

And also, her opposition favors dialogue with North Korea.

ROMANS: Right.

BRIGGS: So, this could really change tensions in the region and negotiations.

ROMANS: She has been an ally of the United States. This is a region that is, you know, stability there paramount because you have the rise of China and you have North Korea's instability and fear of North Korea, what leader is doing.

So, this is an American ally that is undergoing some obviously a crisis here.

BRIGGS: And the protests you are seeing, the clashes with two dead.

[04:20:03] They're pro and they're con. They are colliding. There are some who are thrilled that she's been impeached and there are some that are furious. So, this story not going away, breaking here at 4:20 Eastern.

ROMANS: Paula Hancocks in there for us in the crowds, reporting back to us.

All right. Thank you, Paula. We'll come back to you as events warrant.

Twenty minutes past the hour this Friday morning.

Julian Assange says WikiLeaks wants to help tech companies plug security gaps. But is it smart for companies to take his help and would they admit there are holes to plug? Oh, the conundrum. We're going to go live to London, next.

(COMMERCIAL BREAK)

[04:25:00] ROMANS: Welcome back this Friday morning.

WikiLeaks founder Julian Assange is offering to share secret details about stolen CIA hacking tools to help tech companies fix gaps in their security. Assange saying WikiLeaks has a lot of unpublished information about tools it claims allow the CIA to use people's phones and TVs to spy on them.

But the big question for the tech companies is whether they should cooperate with the fugitive in order to fix possible, you know, holes in their products or is Assange just too toxic or maybe he's just kind of poking fun at them in a way?

Let's bring in Samuel Burke, CNN Money business and tech correspondent live in London.

Good morning. Wasn't that nice of Julian Assange? He wants to help some of the biggest smart people in the world fix their products?

BRIGGS: Helpful guy.

SAMUEL BURKE, CNN MONEY TECH CORRESPONDENT: Good morning, Christine.

Well, listen, what's interesting here is that just because something has been released, classified information has been unveiled does not mean that it is unclassified information. And that puts these tech companies in some muddy legal waters. On top of that, it puts them in bad publicity waters.

Keep in mind, a lot of people have viewed Julian Assange as a pawn of the Russians and then take a look at what Senator Ben Sasse from Nebraska has said about Julian Assange in the past 24 hours after he did this press conference from the Ecuadorian embassy just down the street here from the London bureau.

Quote, "Assange should spend the rest of his life wearing an orange jumpsuit. He is an enemy of the American people and an ally to Vladimir Putin and has dedicated his life's work to endangering innocent lives."

Now, certainly, Julian Assange would disagree with that characterization. But the good news, Christine, as we have been talking with these tech companies and people close to these companies, and what we're hearing is a lot of information they have seen in the documents, they already know. So, that's good for them. That's good for their shareholders and that's good for us, aka, most of the world who uses all these tech products.

ROMANS: You know, Samuel, U.S. intelligence agencies have the obligation to inform the tech companies of these flaws in their products?

BURKE: Well, of course, that gets back to the very heart of this matter, the fact that the CIA may have been developing these tools allegedly that take advantage of the flaws in these products. It doesn't appear, according to experts, that they have any type of legal obligation to tell them.

But a lot of times in the Obama administration, we learned that when they found about this, they would go to a committee in the White House and according to those former administration officials, about 80 percent of the time, they did alert the companies to these flaws. I mean, if we are talking about making America great again, and making American businesses strong, you would want these companies to know about that because people feel that these products do not respect their privacy, they may not use them. And that would make it hard for American business.

ROMANS: All right. Interesting, Samuel Burke this morning in London. Nice to see you, sir. Talk to you soon.

I love that guy. He's very smart. He used to be in the New York bureau. He is one person we love to have on staff.

BRIGGS: Finest coifed scruff in the business.

ROMANS: Yes, he's good. He's good.

BRIGGS: I mean, it's perfect.

ROMANS: He's an attractive young man and very smart.

BRIGGS: The White House ready to change Medicaid provisions in the new health care bill to lure more conservatives. But will this amount to one step forward, two steps back?

(COMMERCIAL BREAK)