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Obamacare Repeal Fails In Dramatic Late-Night Vote; Mnuchin: Don't Call Me 'Foreclosure King'; Sessions Speaks Out; Relatives Of U.S. Diplomats Ordered To Leave Caracas. Aired 5:30-6a ET

Aired July 28, 2017 - 05:30   ET

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


[05:30:00] CHRISTINE ROMANS, CNN ANCHOR: Seven years of repeal efforts have now essentially gone up in smoke leaving a frustrated McConnell to explain on the floor.

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL (R-KY), SENATE MAJORITY LEADER: I, and many of my colleagues, did as we promised and voted to repeal this failed law. We told our constituents we would vote that way and when the moment came -- when the moment came most of us did.

(END VIDEO CLIP)

ROMANS: Two other Republican senators, Maine's Susan Collins and Alaska's Lisa Murkowski -- they joined McCain, crossing party lines to vote against the repeal bill.

So how did this all go down behind the scenes and where do GOP leaders go from here?

Let's go live to CNN's Phil Mattingly on Capitol Hill. Our energizer bunny tonight because you have been watching a remarkable, remarkable few hours of legislating.

PHIL MATTINGLY, CNN CONGRESSIONAL CORRESPONDENT: Yes, Christine, no question about it.

And look, Senator Majority Leader Mitch McConnell, Vice President Mike Pence -- even at one point just off the Senate floor, the vice president handing his phone to John McCain and who was on the other line, President Trump -- all trying to get Sen. McCain to get to yes. But in the end, he wouldn't do it.

And as you noted, joining Lisa Murkowski and joining Susan Collins, sinking a clear priority year after year, after year, campaign after campaign, campaign after campaigner, after campaign. It's now dead.

Take a listen to what the leaders on both sides had to say afterwards.

(BEGIN VIDEO CLIP)

MCCONNELL: Now, I imagine many of our colleagues on the other side are celebrating, probably pretty happy about all this. Our friends on the other side decided early on they didn't want to engage with us in a serious way -- in a serious way to help those suffering under Obamacare.

SEN. CHUCK SCHUMER (D-NY), SENATE MINORITY LEADER: It's time to turn the page. I would say to my dear friend the majority leader, we are not celebrating. We are relieved that millions and millions of people who have been so drastically hurt by the three proposals put forward will at least retain their health care.

(END VIDEO CLIP)

MATTINGLY: Hey, guys. President Trump taking to Twitter shortly after the vote saying, "Three Republicans and 48 Democrats let the American people down. As I said from the beginning, let Obamacare implode, then deal. Watch."

I want to put some important context here because what we saw late into the night, in the morning, is as dramatic as we're all describing it.The idea that the Senate majority leader would put a bill on the floor that would end up failing is a very big deal in and of itself.

That he would put the bill that Republicans have promised to pass year, after year, after year -- one of the primary reasons they hold the U.S. Senate, they hold the majority in the U.S. House and at least partially the reason they hold the White House -- that that bill would fail. That they would not be able to get the votes for that bill is a huge, huge issue.

Now, we've seen this process play out over the last six or seven months. Failures, then revivals, then failures, then resuscitations.

Guys, I'm talking to Senate Republican aides this morning, at least those that haven't gone to sleep yet, and they're making very clear they don't see the path forward right now. As one told me, this is a kill shot to this process.

What happens next, we'll have to see. There's obviously bipartisan desire to do something to try and help the insurance markets right now. But in terms of repeal, it might be done altogether.

And if you want to get a sense of how bruised feelings might be, obviously a lot of respect, a lot of love for Sen. McCain, but the next bill up after health care has long been scheduled to be the National Defense Authorization Act. Guys, that's Sen. McCain's bill.

As one aide told me, that's his baby.

ROMANS: Yes.

MATTINGLY: Senator McConnell, after this vote, tried to call that bill up. The Democrats were OK with it, all Republicans were OK with it except one. Senator Rand Paul objecting to it. Because of that, the Senate is now adjourned. They will not be back until Monday.

Senator McCain is scheduled to start treatment on Monday in Arizona. The idea is he may not be able to be back to actually manage that bill. One of the primary reasons I'm told he came back --

ROMANS: Yes.

DAVE BRIGGS, CNN ANCHOR: Right.

MATTINGLY: -- to Washington. A lot of bruised feelings right now, guys.

ROMANS: That's his baby.

BRIGGS: And here's what John McCain said, not about the defense authorization but about health care.

"From the beginning, I have believed that Obamacare should be repealed and replaced. While the amendment would have repealed some of Obamacare's most burdensome regulation, it offered no replacement to actually reform our health care system.

The Speakers' statement that the House would be willing to go to conference does not ease my concern that this shell of a bill could be taken up and passed at any time."

Phil, we do not know what the president said to John McCain in the waning moments before he voted no, but we do know some behind the scenes between the White House, the Interior Department, and Lisa Murkowski, who also voted no. Tell us about that.

MATTINGLY: Yes, that's exactly right. Look, administrations try various ways to try and lobby members to try and get them to yes.

Lisa Murkowski has been a very clear no throughout this week. She voted against the motion to proceed. She's voted against every amendment that comes up to this point.

She has very specific, and I will note, very well laid out concerns about her state that could be -- could be ordinately impacted by whatever Republicans were going to try and do here. Leaders were aware of those concerns.

[05:35:09] The president trying a different tact, attacking Lisa Murkowski on Twitter earlier in the week for that no vote on the motion to proceed.

And then, the Interior Secretary Ryan Zinke, who has no relationship with health care whatsoever, placing a call to both Dan Sullivan, Lisa Murkowski's Republican counterpart from the state, and Murkowski herself, saying that the no vote on health care potentially could hurt the state's relationship with the Trump administration.

Now, let's add some context here for what that actually means. Lisa Murkowski won her Senate reelection campaign in 2010 after losing the Republican primary. She won as a write-in candidate.

She is not somebody who traditionally acts like she owes anything to the party whatsoever. She's known as an Independent senator. Her views, again, were very clearly laid out as to where they were.

And guys, we've talked about there's a couple of times. This is by far the kind of the most interesting tidbit for me. She chairs the Senate committee that oversees the Interior Department and Sec. Ryan Zinke, who will now be answering to her from here on out.

So whether or not that was the greatest strategy in the world seems to be up in the air. It certainly didn't help sway her vote.

Again, I want to reiterate. Administrations do lots of things on votes likes this --

ROMANS: Sure.

BRIGGS: Sure.

MATTINGLY: -- to try and get senators there. This isn't some dramatic out of the world idea here. But perhaps not the greatest strategy as it is very clear Lisa Murkowski couldn't be swayed, guys.

ROMANS: All right. Phil Mattingly with great detail behind the scenes --

BRIGGS: Great stuff, yes.

ROMANS: -- about what was really a dramatic night. Thanks, Phil.

Let's bring back Kimberly Leonard, senior health policy reporter for the "Washington Examiner." Also, David Drucker, our CNN political analyst and senior congressional correspondent, also for the "Washington Examiner."

Nice to see both of you.

Kimberly, this thing is dead. You heard Phil Mattingly say that GOP -- top GOP aides are basically saying that vote last night was the kill shot to repeal and replace. Do you agree?

KIMBERLY LEONARD, SENIOR HEALTH POLICY REPORTER, WASHINGTON EXAMINER: Well, every time I hear that it seems to come back to life a little bit so I'm cautious about making that kind of prediction.

You know, for now, it does seem that they wanted to at least try to show where everyone stood on this, you know. When you said you wanted to repeal Obamacare did you mean it, and what did you mean by that? And so right now everyone is kind of on the record as having, you know, voted either one way or another.

And perhaps they can move on to bipartisanship. There are certainly outside conservative groups that we're seeing, like Heritage Action, saying no, don't give up this effort. It's time to go back to it.

So we'll see.It's possible that it could come back. Anything's possible when it comes to --

ROMANS: True.

LEONARD: -- this battle, it seems like.

BRIGGS: No real hints at bipartisanship from the President of the United States though in his tweet at 2:25 a.m.

He said, "As I said from the beginning, let Obamacare implode, then deal. Watch."

So let's start with the first part of that. Will Obamacare implode?

LEONARD: It would have a lot of trouble if they were to do nothing. If Congress were to just go into next year with the open enrollment season coming up in November and do nothing, you would see a lot of counties facing no insurer for next year. You would see counties with higher rate hikes.People who don't receive subsidies for their health insurance would be paying a lot more.

Now, there are things that the Department of Health and Human Services can do to make things a little bit cheaper for customers.

They can, for example, say you can have a short-term health insurance plan and that might not offer all the protections as Obamacare but it certainly would be less expensive. They could work with states to craft different plans and to add more funding.

So there are ways that they could actually work with states and with Obamacare customers without even involving Congress.

ROMANS: Gosh, one wonders if the Trump administration and Tom Price could stand up and say because of your inability to fix this, this is what we -- I mean, you could own some success and improvement in Obamacare if the federal government wanted to do that -- if the White House wanted to do that.

You made a really good point last hour about how if both sides could say they won -- if both sides could claim victory then maybe it would be palatable to try to fix Obamacare.

LEONARD: Right. Well, I think at the end of the day what people are really noticing is what they're paying for health care.

ROMANS: Right.

LEONARD: And if you are very sick and you need this care and you have a preexisting illness, obviously you're going to see Obamacare a certain way. If you're relatively healthy, you've been kind of playing by all the rules, you have a family, you have student loans, housing loans, things like that, and you're paying so much in health insurance and you're not getting any subsidies for it, then you're really struggling.

And oftentimes, the Democrats don't necessarily address that second group --

ROMANS: Right.

LEONARD: -- and so that can be a little bit difficult to those who are facing these high prices and aren't necessarily seeing any empathy for it. No, you have to pay a little bit more. Well, it's not just a little bit of money, it's quite expensive for a lot of people. And so they have to able to say that they care about making sure that things are more equitable for those who are in the program.

BRIGGS: All right. Thanks, Kimberly.

Let's get to the politics of all this with David Drucker. David, what is your reaction? Seven years of promises to repeal and replace and it came down to three Republican no votes. What does it mean?

[05:40:05] DAVID DRUCKER, CNN POLITICAL ANALYST, SENIOR CONGRESSIONAL CORRESPONDENT, WASHINGTON EXAMINER: Well, I think this is a big political problem for Republicans, which is why I'm wondering if the best thing they could do is go home for recess and not come back. And maybe if they get a little pressure from their constituents they come back and they try and get something done on this quietly and see if they can resolve their differences.

But ultimately, this comes down to a disagreement, I think, over Medicaid and the Medicaid expansion. Seven, eight years ago there were zero Republican votes to expand Medicaid and basically every Republican believed the program needed to be reformed to deal with an out of control cost structure.

ROMANS: Right.

DRUCKER: They finally have the power to do something about health care and there were major disagreements internally with Medicaid and the Medicaid expansion and that, to me, is the policy part of this.

But also, the political part of this is they worried at home how their constituents would react to changes in the health care system that brought down their attempt to repeal the Affordable Care Act.

ROMANS: When I look at the most recent favorability polling from the Kaiser Health Tracking Poll, 50 percent favorable rating for Obamacare, 44 percent unfavorable.

You know, David, in some of these surveys -- in some of these polls, as we have found, part of the unfavorable is people who think that Obamacare doesn't go far enough. People who want single-payer, which I think is pretty interesting.

It doesn't mean those people are, you know, conservatives who hate government in your health care. It means that they think government should do more on their health care. Not all of them, but some of them.

Is it possible that over the past seven years the hatred -- the battle cry against Obamacare has morphed as Obamacare has become the law of the land and people have gotten more familiar with it?

DRUCKER: Well, it's a great question and I think it's -- you're right to point this out. But really, this all happened in the past few months.

Obamacare, at the beginning of the Trump presidency in January, was still, overall, unpopular.

ROMANS: Yes.

DRUCKER: As Republicans started pushing their solutions, first in the House and then in the Senate, the law, even though it's in worse shape than it has ever been since it was implemented, grew more popular as people decided that the devil they knew was better than the devil they didn't know.

Democrats would oppose it because, as you noted, it didn't go far enough on the left, found a new appreciation for it. And Republicans or people, you know, in the middle that were always suspicious of it started to feel better about it.

But I think this all goes back to number one, a failure of Republicans in Congress to explain how their proposals were going to help people and make their lives better with health care. And then goes to a failure at the White House to corral all of the different voices in the Republican Party, get them all on the same page, and let them know that the president would have their back and they would get this done.

There was a lot of reliance on Vice President Mike Pence because he's conservative, he understands policy, and he has relationships with Republicans on the Hill and they trust him.

But at the end of the day there is no substitute for the president, who never really dove into this, never held rallies, never gave speeches all about health care.

In the past couple of days he was in West Virginia speaking to the Boy Scouts. The Boy Scouts have now apologized for that meeting. It was all -- it was a campaign screed. Then he was in Ohio, where it was more of the same sort of campaign-style speech.

And so I think the president really missed an opportunity here, notwithstanding the fault that lies with Republicans on the Hill, but his responsibility. And I think he missed an opportunity to get this done.

BRIGGS: And this in the same 24 hours that you have headlines that covers -- rather --

ROMANS: Oh yes,

BRIGGS: -- the Trump-friendly "New York Post" about reality show. It's turned into a -- really, a circular firing squad in the Oval Office when you have the Senate voting for Russia-Iran-North Korea sanctions 98 to two. When you have Chuck Grassley saying no, we will not make a recess appointment of an attorney general if the president fires Jeff Sessions.

What does it mean for the Trump agenda? How do they turn the page and show some momentum?

DRUCKER: Yes, so let's stop talking about how brilliant the White House is to distract from things like health care with these side shows. All of this hurts because Republicans on the Hill -- members of the Senate are looking at the White House and they're thinking to themselves this whole ship is going down and if Obamacare repeal doesn't work out I'm in deep trouble.

I saw what happened to the Democrats. They thought it was going to be great and we won four straight -- you know, in four straight elections we profited -- or something -- three out of four -- something like that. And so this doesn't help bring confidence to the party on the Hill that they can take these tough votes, get things done, and it's going to work out.

And so I think what the president has to do is restore order at the White House, restore a focus on his agenda which actually has some appeal if he would give it some room to run and let people pay attention to it, and see if that can bring his party back together, number one, as they move to tax reform. And number two, as they look ahead to what they're going to have to with health cause because they have to do something.

BRIGGS: Yes.

[05:45:00] DRUCKER: Just one example, guys. By not repealing Obamacare there is a $14 billion tax -- health care tax -- that has been waived over the past couple of years that is about to go into effect. Insurance companies are going to build it into the price that they charge consumers. People's health care is going up.

ROMANS: Well, on that light note -- I know -- I mean, we've got open enrollment in three months. I mean, a lot of work still to be done and no clear path forward.

David Drucker, Kimberly Leonard, both from the "Washington Examiner." Thanks to both of you.

BRIGGS: Thanks, guys.

ROMANS: Have a great weekend.

DRUCKER: Thanks, guys.

ROMANS: Treasury Secretary Steven Mnuchin clashing with Democrats on Capitol Hill, especially over a specific nickname.

(BEGIN VIDEO CLIP)

STEVEN MNUCHIN, U.S. TREASURY SECRETARY: I take great offense to anybody who calls me the foreclosure king.

(END VIDEO CLIP)

ROMANS: We'll tell you what prompted all of that next.

(COMMERCIAL BREAK)

[05:50:05] ROMANS: Treasury Secretary Steven Mnuchin clashing with Democrats on Capitol Hill, especially over a specific nickname. (BEGIN VIDEO CLIP)

MNUCHIN: I did not make one mortgage during or prior to the mortgage crisis so I take great offense to anybody who calls me the foreclosure king.

(END VIDEO CLIP)

ROMANS: Democrats bestowed that title on Mnuchin during his nomination, accusing him of profiting from the financial crisis while he ran the lender, OneWest. A lender, by the way, that the company that became OneWest did make a bunch of mortgages.

The hearing got heated when Congressman Keith Ellison brought up robo- signing -- infamous, improper foreclosure practices.

(BEGIN VIDEO CLIP)

MNUCHIN: I don't even think you know what the definition of robo- signing is.

REP. KEITH ELLISON (D-MN), MEMBER, FINANCIAL SERVICES COMMITTEE: You don't know what I know.

MNUCHIN: There's not a --

ELLISON: You don't --

MNUCHIN: -- legal definition of robo-signing.

(END VIDEO CLIP)

ROMANS: It was one of several testy moments -- exchanges with the House Financial Services Committee, demonstrating increasing frustration between Democrats and this administration with Mnuchin saying this when asked if he would apologize.

(BEGIN VIDEO CLIP)

MNUCHIN: And I'm not apologizing to anybody because robo-signing is not a legal term and I was being harassed.

(END VIDEO CLIP)

ROMANS: He was later criticized for not providing records of financial ties between Russia and the president. But clearly, some tense moments in that hearing.

BRIGGS: No question. All right.

Jeff Sessions speaking out for the first time since President Trump began targeting him with a barrage of public criticism. The AttorneyGeneral standing by his decision to recuse himself from the Russia investigation but he admits this relentless battering from his boss certainly stings.

(BEGIN VIDEO CLIP)

JEFF SESSIONS, ATTORNEY GENERAL: Well, it's kind of hurtful. But the President of the United States is a strong leader. He has had a lot of criticisms and he's steadfastly determined to get his job done. And he wants all of us to do our jobs and that's what I intend to do.

TUCKER CARLSON, HOST, FOX NEWS "TUCKER CARLSON TONIGHT": He has said again and again in many different forums throughout this barrage that you should have acted differently. You should have not recused yourself.

SESSIONS: I talked to experts in the Department of Justice -- people who are trained in that. I'm confident I made the right decision.

(END VIDEO CLIP)

ROMANS: And he said their core values are in harmony.

Sessions says he believes the Justice Department is making tremendous progress but he acknowledges he serves at the pleasure of the president and will step down if his boss wants to make a change.

But, Sen. Lindsey Graham cautioning the president there will be holy hell to pay if he fires the attorney general.

BRIGGS: Russia ordering the U.S. to cut its Moscow Embassy staff in retaliation for the new sanctions bill passed overwhelmingly by the House and Senate.

Russia demanding the U.S. cut the number of diplomats and consuls across Russia significantly by September first. Russia also suspending the use of two compounds, including one in Moscow, effective in August.

In a statement the foreign minister says, quote, "Any new unilateral actions by the U.S. authorities to reduce the number of our diplomats in the United States will be met with a mirror response."

ROMANS: Oh, watch this space.

The U.S. is ordering relatives of American diplomats to immediately leave Caracas two days ahead of a polarizing election that's threatening to tear Venezuela apart. The vote, called by President Maduro, is an attempt to elect a new assembly and rewrite the country's constitution. Maduro's opponents call it a shameless power grab and the potential end to democracy.

BRIGGS: One hundred eleven people have died in violent protests in Venezuela since April. Now, the Venezuelan government says it will ban protests ahead of this week's election.

Let's bring in CNN's Leyla Santiago live from Caracas with the latest. Good morning to you.

LEYLA SANTIAGO, CNN CORRESPONDENT: Good morning, Dave. That ban -- that protest ban now in effect but it will be interesting to see how things play out because as the government says, we are banning all protests leading up to the election and that could come with a consequence of five to 10 years in prison.

Opposition leaders are saying do not stand down. We will be on the street. We will be speaking out against the government and this election on the 30th, in just a matter of days.

But let me sort of paint the picture of what you're seeing as you're out on the roads.

Just yesterday as we made our way to different parts of Caracas you could actually see groups of the opposition with makeshift roadblocks, and you have to sort of negotiate with them to get through to different parts. That's the opposition really taking control of some parts of Caracas on the streets -- on the roads, and they plan to do that again today.

And this is, again, leading up to an election in which many have spoken out against, but the government continues to say we will move forward.

When you watch the opposition and the government -- or, excuse me, the National Guard sort of clash on the streets it really is the back and forth that you see in the politics as well as opposition leaders say that they do not want a new constitution or a new assembly. They want a new government and the government continues to say this is about democracy -- Dave.

[05:55:25] BRIGGS: Just a terrifying situation there in Venezuela.

Leyla Santiago live for us in Caracas. Thanks.

ROMANS: All right. Let's get a check on "CNN Money Stream" this morning. It is that time of the morning.

Global stock markets are lower after a mixed day on Wall Street. The Dow hit a fresh record -- that's 30 stocks -- but a slump in tech dragged down the bigger Nasdaq and the S&P 500.

Tech has been a huge driver of the U.S. stock market this year. Tech up 23 percent so far. These five tech companies have had an outsized effect on the market accounting for more than one-fourth of the gains of the S&P 500 this year. Four of those big five closed lower.

Some on Wall Street worry stocks are getting too hot, but for now investors are shrugging off high valuations, focusing instead on really good, big corporate profits. Earnings have been strong overall.

One tech stock that did not tumble yesterday, Facebook. The stock jumped nearly three percent. Strong earnings pushing its value to about $500 billion -- the $500 billion mark. It's a big milestone, especially considering it's only been public for five years. Five years to $500 billion. Right now, only three other tech companies are worth more -- Apple, Google parent Alphabet, and Microsoft.

Amazon also hit that $500 billion mark on Wednesday. Speaking of Amazon, the stock falling more than three percent overnight after profits declined 77 percent.

You know, it's made a lot of investments in acquisition. It's spending money on things like Alexa and new warehouses. It bought Whole Foods for $13.7 billion.

So sales grew but net profit dropped from the year before and that has a -- oh, the stock dropped, by the way -- ended Jeff Bezos brief run as the world's richest person. He briefly dethroned Bill Gates Thursday morning.

BRIGGS: Which had Twitter going nuts when he was the world's most richest man, for a moment.

ROMANS: For a moment.

BRIGGS: Yes.

ROMANS: Thanks for joining us. I'm Christine Roman.

BRIGGS: I'm Dave Briggs.

The Republican repeal and replace efforts have failed, thanks in large part to Sen. John McCain.

A big day on "NEW DAY" starts right now.

ANNOUNCER: This is CNN breaking news.

CHRIS CUOMO, CNN ANCHOR: Welcome to our viewers in the United States and around the world. This is NEW DAY. It is Friday, July 28th, 6:00 here in New York.

And we do begin with breaking news.

Republicans' seven-year push to dismantle Obamacare goes down in a stunning defeat.

Senator John McCain living up to his nickname, 'The Maverick,' casting the decisive vote against the GOP's last-ditch effort to repeal major parts of Obamacare.

ALISYN CAMEROTA, CNN ANCHOR: What a night it was. President Trump blasting the Senate vote, saying that three senators let the American people down. The president tried to call McCain to sway him but that did not work.

What is next in the health care fight?

Let's get right to CNN's Phil Mattingly. He is live on Capitol Hill with all of the breaking details. You've had a very long night, Phil. MATTINGLY: Yes. Good morning, Alisyn. I think a lot of people have had a very long night.

Look, the furious lobbying not just taking place behind the scenes, but right in public view on the Senate floor. The Senate majority leader trying his best just to get the 50 votes he needed to move forward. In the end, one senator made it clear it wasn't going to happen.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: The yeas are 49, the nays are 51. The motion is not agreed to.

MATTINGLY (voice-over): The Republican Party's seven-year effort to repeal Obamacare collapsing after a dramatic Senate floor vote that dragged on into the early morning.

In the end, it was Sen. John McCain who cast the decisive final no vote, siding with fellow Republicans Lisa Murkowski and Susan Collins who voiced their disapproval on every measure voted on this week.

The Republicans' last-ditch effort, the 'Skinny Repeal' amendment, voted down 49 to 51.

MCCONNELL: This is a disappointment. I regret that our efforts were simply not enough this time.

MATTINGLY: McCain rejecting desperate pleas from Vice President Mike Pence and Senate Majority Leader Mitch McConnell, even taking a phone call from President Trump, according to a source. But none of it swaying the veteran senator who lived up to his nickname, 'The Maverick.'

SEN. TED CRUZ (R), TEXAS: Tonight was an unfortunate night. It was a sad night. But again, I don't believe this journey is over.

MCCONNELL: So now, Mr. President, it's time to move on.

MATTINGLY: The vote capping off a day of uncertainty as Republicans shuffled back and forth for meetings in the Senate floor, desperately trying to wrangle the votes for a skeleton repeal bill designed simply to move the process into a conference with the House.

But the seeds of failure were sown early Thursday evening as McCain joined colleagues castigating the bill and the process.