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EARLY START

Deputy AG: Mueller Can Probe Trump Finances; Pence Pushes Back Against 2020 Report; Tax Reform Could Hit Charitable Giving; Tillerson Turns Up Heat On North Korea. Aired 5-5:30a ET

Aired August 7, 2017 - 05:00   ET

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


[05:00:00]

CHRISTINE ROMANS, CNN ANCHOR: That clarity from the Justice Department after the president himself said his finances should be off limits.

MIGUEL MARQUEZ, CNN ANCHOR: And the vice president with a harsh rebuke to "The New York Times" suggesting that he's preparing for a White House run. He slams the suggestion as disgraceful, offensive, and absurd.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I think it's quite clear in terms of there being no daylight among the international community as to the expectation that

North Korea will take steps.

(END VIDEO CLIP)

ROMANS: And global pressure grows on North Korea to curb its nuclear program after sanctions are slapped on unanimously by the U.N. Security Council.

Good morning and welcome to EARLY START. I'm Christine Romans.

MARQUEZ: Good morning to you.

ROMANS: Nice to see you.

MARQUEZ: I'm Miguel Marquez in for Dave Briggs this morning. It is Monday, August 7th, 5:00 a.m. here on the east coast. The second in command at the Justice Department rejecting any suggestions Special Counsel Robert Mueller cannot dig into Trump family finances.

Deputy Attorney General Rod Rosenstein says Mueller can look into any crimes he might discover within the scope of his probe. Rosenstein's remarks on "Fox News Sunday" come days after President Trump said Mueller would cross a red line if he digs into his family's finances.

ROMANS: CNN reported last week that federal investigators are looking into potential financial ties between Russia and the president and the president's associates, viewing any such ties as fertile ground for their probe. Rosenstein authorized the special counsel after Attorney General Jeff Sessions recused himself, of course. Asked Sunday about the limits of Mueller's investigation, Rosenstein said he would have to approve any expansion.

(BEGIN VIDEO CLIP)

ROD ROSENSTEIN, DEPUTY ATTORNEY GENERAL: The special counsel is subject to the rules and regulations of the Department of Justice, and we don't engage in fishing expeditions. That order that you read, that doesn't detail specifically who may be the subject of the investigation.

UNIDENTIFIED MALE: Right.

ROSENSTEIN: Because we don't reveal that publicly. But Bob Mueller understands, and I understand, the specific scope of the investigation. So, no, it's not a fishing expedition.

(END VIDEO CLIP)

MARQUEZ: Questions about the Russia investigation come as intrigue builds around the White House and who may occupy it come 20. Vice President Mike Pence emphatically denying a "New York Times" report that he's laying the groundwork for a run for president if President Trump does not seek a second term.

All this with the president beginning what he calls a working vacation at his golf club in New Jersey. That's where we find CNN White House correspondent, Athena Jones.

ATHENA JONES, CNN CORRESPONDENT: Good morning, Christine and Miguel. Vice President Mike Pence is pushing back hard on this "New York Times" story, as are other White House officials. The vice president taking the unusual step of putting out an official statement on White House letterhead to respond to this story.

In the statement, the vice president called the story disgraceful, offensive, categorically false, laughable, and absurd. Two Pence aides, his spokesperson and his chief of staff, his chief of staff was mentioned in "The New York Times" story, also taking to Twitter to refute the story calling it fake news.

And White House counselor, Kellyanne Conway, appearing on ABC's "This Week" called the story complete fiction. Watch --

(BEGIN VIDEO CLIP)

KELLYANNE CONWAY, COUNSELOR TO THE PRESIDENT: It is absolutely true that the vice president is getting ready for 2020 for re-election as vice president.

UNIDENTIFIED MALE: No concern he's setting up a shadow campaign?

CONWAY: Zero concern. That is complete fiction. That is complete fabrication and I know that his advisers, who had comments attributed to them have pushed back very strongly and so did the vice president.

As am I right now unequivocally. Vice President Pence is a very loyal, dutiful, but also incredibly effectively vice president, active vice president with this president.

(END VIDEO CLIP)

JONES: And I think the operative phrase on what Kellyanne Conway said was very loyal. White House officials want to make it very, very clear that the vice president has no designs on the president's job in 2029.

And I think it's important to note that President Trump has made it quite clear that he plans to run again. That he hopes to be a two- term president. In fact, he filed the paperwork to do so very early in his presidency.

He's held multiple campaign rallies. That is why we're seeing such strong pushback from the White House on this story -- Christine, Miguel.

ROMANS: Athena Jones in New Jersey for us.

To help break it all down this morning, CNN political reporter, Eugene Scott joins us here in New York. Good morning.

EUGENE SCOTT, CNN POLITICS REPORTER: Good morning.

ROMANS: Nice to see you.

SCOTT: You, as well.

ROMANS: Let's talk about the fallout from this "New York Times" report. The headline was "Republicans shadow campaign for 2020 takes shape as Trump doubts grow." Vice President Mike Pence really took issue with this, issuing a statement basically saying that "The article is disgraceful, offensive, is absurd.

The allegations in this article are categorically false and represents just the latest attempt by the media to divide this administration. Whatever fake news may come our way, my entire team will focus to on our efforts to advance the president's agenda and see him re-elected in 2020."

[05:05:03] Mike Pence does not want to be seen by this president as trying to step out ahead of him, as trying to measure the drapes prematurely. What do you make of this development?

SCOTT: It's not surprising to see him push back so aggressively on "The New York Times." That's a part of the narrative that we see coming out of the White House, but I think Pence has to be honest and acknowledge what many of us reporters talk and conservative voters should know.

And that's that there are people in the Republican Party, who have problems with President Trump, who would like Mike Pence to take a more prominent role in this administration, in the party as a whole, and maybe in the White House.

MARQUEZ: But I mean, the article also mentioned Senator Sass, Senator Cotton.

ROMANS: They've been to Iowa, both of them -- proving grounds for --

MARQUEZ: But what's interesting, Pence started a PAC.

SCOTT: Right.

MARQUEZ: That's unheard of for a vice president. Clearly, the president will have his PAC. Everything must be (inaudible) to the president. Why would a vice president start a PAC?

SCOTT: What they would say probably is that what Pence is trying to do is use these funds to go to these states to rally the base on behalf of the president so that people who really are walking away from supporting him will stay on the Trump train.

I think what happens, though, is when you send someone like Pence out to get people on the Trump train, you'll risk the chance that some people are going to be like maybe it should be the Pence train.

ROMANS: Meantime, the president trying to control his own message. He tweets -- that's how he speaks directly to millions of people. This is what he talked about, fake news.

You heard Mike Pence slamming the fake news, the president as well, "The fake news refuses to report the success of the first six months, Supreme Court, surging economy and jobs, border, military security, ISIS and MS 13, et cetera" --

SCOTT: We have stories on all of this.

ROMANS: I know and I would like to say every day I talk about the economy, every day I talk about jobs. Interestingly, the president's job record at 1.24 million jobs is just slightly below the last six months of last year when President Obama had slightly more jobs created than that.

SCOTT: True.

ROMANS: So, that's the real numbers. You hear Kelly McEnany, who used to be a contributor here, posting on the president's Facebook page. Her version of news, like the good news stuff that the president would like to see. The real news, she says. This is the president trying to control the message again.

SCOTT: Absolutely. And I think what he risks is having someone who I think was so effective at communicating the Trump agenda to people who already aren't on Team Trump. You take that voice away and put them in a space where people who you need to get on board just aren't likely going to watch.

ROMANS: Interesting. SCOTT: I think another thing that's worth paying attention to, two demographics -- white Evangelicals and white working-class voters without a college degree, have dropped in their approval of Donald Trump a bit. I think perhaps he wants to get -- see on behalf of the Trump administration -- wants to get the message to them that Trump is doing great.

ROMANS: Is that a re-election issue? I mean, is that part of a reelection bid?

SCOTT: Isn't everything, though, that's positive about President Trump now?

MARQUEZ: Everything I hear from Trump supporters out there is that the real news of this administration is not getting out. It's not breaking through. We're too mired in Russia. There is a real split among Republicans out there.

And a growing split among Republicans out there about sort of the news they want out there and what Republicans want to focus on. Great frustration that with Republicans controlling everything in the capitol they can't get anything done, the big-ticket items.

SCOTT: Well, I watched that report and every single thing she reported and we report on cnnpolitics.com, cnnmoney.com, CNN U.S., CNN international --

ROMANS: She didn't mention the Russia probe.

SCOTT: Right, exactly. I think that's the concern, right? You want to get a certain part of the message. Not the message that we have polls saying many people actually care about --

MARQUEZ: This is called a propaganda.

SCOTT: It's certainly not fair and balanced news.

MARQUEZ: Right. Interesting. Eugene, thank you very much.

ROMANS: Come back in 2 minutes.

SCOTT: See you soon.

ROMANS: All right. Time for an "EARLY START" on your money this morning, the benefits of charitable giving might change if lawmakers push through tax reform, according to new analysis from the Congressional Budget Office.

Most people don't donate to charity just because of the tax breaks they get. They donate because it's the right thing to do. The Republican plan to double the standard deduction, lower overall income tax rates, and repeal the estate tax has charity experts concerned.

They think donations could drop. By how much? Between $5 billion and $13 billion a year according to one study. Here's why -- increasing the standard deduction would mean fewer people could itemize and claims those breaks.

Lowering tax rates would make the deduction less worthwhile for those who still take it. Those in favor of these tax proposals say this could lead to people actually giving more to charities. They say if a person has to pay less to the government, they're more likely to give more money to charity. More money means more do-gooding.

MARQUEZ: Although I don't know that is what economist have shown.

[05:10:02] ROMANS: You know, it's interesting because the two things that are sacred in tax reform, we're told, are the mortgage interest deduction and the charitable giving.

MARQUEZ: Right.

ROMANS: This analysis would suggest that even if you keep that sacred, it still could hurt charitable giving.

MARQUEZ: All right. North Korea facing steep penalties for its nuclear program. We are live in Manila where world leaders are speaking with a unified voice.

(BEGIN VIDEO CLIP)

REX TILLERSON, SECRETARY OF STATE: You know, we've not had an extended period of time where they have not taken some type of provocative action. That would be the first and strongest signal they could send to us is just stop these missile launches.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

ROMANS: Secretary of State Rex Tillerson says the international community is united in its expectation that North Korea will take steps to denuclearize. Tillerson is in the Philippines at the forum of the Southeast Asian Nations.

He's ramping up the pressure on North Korea just days after the U.N. Security Council unanimously approved the toughest sanctions to date against the Kim Jong-un regime.

(BEGIN VIDEO CLIP)

[05:15:05] TILLERSON: So, the next steps obviously are to see that the Security Council resolution sanctions are enforced by everyone. We will be monitoring that carefully and certainly having conversations with any and all that we see who may not be fully embracing not just the spirit of those sanctions, but the operational execution of those sanctions.

(END VIDEO CLIP)

MARQUEZ: All eyes now on China, North Korea's largest trading partner. The Chinese voted for the U.N. sanctions and will be key to implementing them. We want to go to Manila now and bring in CNN's Ivan Watson. Ivan, the North Koreans moving ahead with developing the missile technology and their nuclear weapons. The sanctions come, but they are already under a very heavy sanctions regime. How is this going to happen, and will this really pressure the North Koreans?

IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: What this latest round of sanctions does is it bans North Korea's exports of coal and iron and even seafood, and the U.S. government estimates that it generates about a third of its export revenues from those activities.

So, this could have an impact on the ability to earn hard currency for the North Korean regime. North Korea has made it clear it doesn't care. It's responded in the last couple of hours via the North Korean state news agency, calling the new sanctions a violent violation of North Korean sovereignty.

And saying that the international community must be delusional if it thinks that sanctions can convince North Korea to give up its commitment to develop nuclear weapons as what it sees as a vital weapon of self-defense.

This is despite the fact that China, as you mentioned, the Chinese foreign minister, is here in Manila. He met face to face with North Korea's foreign minister, and he urged him to follow, abide by United Nations Security Council regulations and stop firing intercontinental ballistic missiles.

That's also what Southeast Asian nations, ten of them said, in a joint communique here saying that the two ICBM tests that North Korea carried out last week were a threat to world peace, and they were gravely concerned about that.

The big question is, is that message getting through and judging by the messages we've heard from Pyongyang today, no, it's not going to convince North Korea to stop.

Another question here is how will Secretary of State Rex Tillerson, will he potentially shake hands or meet with the North Korean foreign minister when they're all under one roof? They've had a series of meetings today as part of the Asia regional forum.

There are more than 20 top diplomats who were underneath one roof for that. The State Department says there's no plan for the two diplomats to meet. It will be interesting to hear from people who were in the room if there was any interaction whatsoever between the diplomats from these two rival states -- Miguel.

MARQUEZ: The North Koreans have long wanted that direct official contact with the U.S. Ivan Watson for us in Manila, thank you.

ROMANS: All right. Breaking news this morning, the Australian military said it has located a U.S. Osprey aircraft that went down there on Saturday. An Australian Navy survey ship locating the submerged aircraft off of Australia's east coast overnight. The Australian military says it will survey the crash site with a submersible before beginning diving operations. Three U.S. Marines remain missing since that crash. Twenty three Marines were rescued.

Not much of a retirement for Jay Cutler. The former Bears quarterback was supposed to begin his broadcasting career of the season. Instead, he'll be taking snaps for the Miami Dolphins. Coy Wire with the details in this morning's "Bleacher Report." That's next.

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[05:23:17]

MARQUEZ: Now a Virginia's girl's softball team learned a tough lesson about social media -- think before you post.

ROMANS: Coy Wire has more in this morning's "Bleacher Report." Hi, Coy.

COY WIRE, CNN SPORTS CORRESPONDENT: Good morning, Christine and Miguel. The 12 to 14-year-old girls' team was disqualified from the Junior League World Series championship game after an inappropriate photo was discovered on Snapchat.

Six of the girls were in a picture giving the middle finger following a semifinal win on Friday. The team apologized Saturday, but tournament organizers had already made their decision.

In a statement, officials said the photo violated the league's policies regarding unsportsmanlike conduct. The team's manager says he feels the punishment doesn't fit the crime.

(BEGIN VIDEO CLIP)

SCOTT CURRIE, MANAGER: These girls, they're human, they made a mistake. It's not who they are. It doesn't define who they are or who they are for the rest of their lives. It was just one moment in time. They just made a mistake.

(END VIDEO CLIP)

WIRE: The team had gone undefeated, beating their opponents by a combined score of 29-1 before heading to the World Series featuring teams from around the globe.

Former Bears quarterback, Jay Cutler's coming out of retirement to sign a one-year deal with a reported $10 million to play for the Dolphins. This according to the "Miami Herald."

Cutler's leaving a tv gig as a game analyst to reunite with his former offensive coordinator, Adam Gays (ph), who is now the head coach in Miami. After the Dolphins' starter, Ryan Tannehill partially tore his ACL according to reports.

So, another possible window of opportunity for Colin Kaepernick appears to have opened and closed. The team was reportedly interested in signing him as well as Tim Tebow.

The 10-year-old Jesse Pallas still deals with brain swelling and bone loss because of the leukemia he has battled since he was 4.

[05:25:06] The cancer is now in remission, and this weekend he beat the New York Jets into submission. Taking a handoff from quarterback, Josh McCown, scampering 50 yards leaving defenders in the dust.

His mom, dad, and older brother were there to cheer him on and watch him score a touchdown and to see the team lift him up in celebration. The Jets found out about him from the Marty Lions Foundation started by a former player of theirs 35 years ago that grants the wishes of children with terminal and life-threatening illnesses.

The team will also give Jesse and his family four tickets to their home opener next month.

ROMANS: Wow.

WIRE: Your feel-good story of the day.

ROMANS: It really is.

MARQUEZ: Coy Wire, you're going to make me cry on a Monday morning. That is so sweet. Adorable.

ROMANS: I got to tell you, Coy. That first story about this girl, the softball team, I think every parent should be aware that, you know, their kids are posting stuff and doing stuff --

MARQUEZ: I don't get how they don't get it anymore. Crazy.

ROMANS: It's worth a conversation with your kids about, look, your scholarship, your admission to college, your job offer, all of those things, you know, could be on the line if you're putting something out that you don't want people to see.

WIRE: That's exactly right. My dad speaks to young high school student athletes and their parents all across the country. He tells them social media, don't post anything that you wouldn't want your grandmother or your grandfather to see.

MARQUEZ: The grandmother rule. That's exactly the rule. Don't embarrass your --

ROMANS: My grandma watches the show. Keep it clean. Keep it clean. Coy Wire, thank you. Nice to see you.

President Trump calls the Russia probe a total fabrication, but the second in command at the Justice Department says the investigation is expanding, it will not be limited as the president hopes.

That, plus Mike Pence firing back at reports he is readying for a White House run. We'll explain why.

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