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INSIDE POLITICS

Examining Alabama Senate Race; Puerto Rico Continues to Work to Recover from Hurricanes. Aired 12-12:30p ET

Aired September 27, 2017 - 12:00   ET

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


(COMMERCIAL BREAK)

JOHN KING, CNN HOST OF INSIDE POLITICS: Welcome to Inside Politics. I'm John King.

Thanks for sharing your day with us and a busy day it is. Roy win - Roy Moore, big win in Alabama Senate runoff, a giant defeat the President Trump and the Republican leadership.

The big question now, "Will it set off a wave of anti-establishment challenges and even more chaos to a divided GOP?"

(BEGIN VIDEO CLIP)

STEVE BANNON, FORMER WHITE HOUSE CHIEF STRATEGIST: The question was called today in the state of Alabama. Who is sovereign, the people or the money?

And Alabama answered today, "The people."

(END VIDEO CLIP)

KING: Plus the President is off to Indiana this hour with the goal of turning the page to tax reform. The new GOP plan calls for fewer rates and takes away some very popular deductions.

So, can the Republicans work out their differences or tax reform expose the same GOP divides that just yesterday doomed yet another Obamacare repeal bill?

(BEGIN VIDEO CLIP)

REP. PAUL RYAN (R-WI), SPEAKER OF THE HOUSE OF REPRESENTATIVES: We're very excited about this because we really believe that we have an historic chance of prosperity in this country.

The Republican leaders in the House, the Senate, and the White House, we've come together on this concrete framework for historic tax reform.

(END VIDEO CLIP)

KING: And the president insists he was not preoccupied with his war on the NFL but as the White House rushes now to prove its commitment to Puerto Rico, the frustration is mounting. (BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: There is people that are - have a shortage of food. The National Guard is now working up to the way it should be. They're all just standing there doing nothing, no electricity, no water for the city.

It's going to take like may be six, seven months for anything to happen here.

(END VIDEO CLIP)

KING: We begin what you can only describe as a blow-out in Alabama.

The bombastic, controversial Former Judge Roy Moore toppling Interim Senator Luther Strange in last night's Republican Senate runoff.

Safe to say the Republican leadership did not sleep well last night.

Here's how Breitbart heralded the win, "ESTABLISHMENT GOP BROUGHT TO ITS KNEES."

Roy Moore put it this way, he's "Going to help bring America back in line," he says, with the Christian Bible."

(BEGIN VIDEO CLIP)

ROY MOORE, (R) ALABAMA SENATE CANDIDATE & FORMER CHIEF JUSTICE OF THE ALABAMA SUPREME COURT: We wouldn't be having these demonstrations and riots, division in our society if we return to 'One nation under God,' as it was.

Some people see God as a religion. He's not a religion. He something real. If he hadn't given us the rights there to be nothing there for government to secure.

(END VIDEO CLIP)

KING: This is a massive political defeat for President Trump and for the Senate Majority Leader, Mitch McConnell.

Despite spending $10 million in ads. Despite sending the President in himself along with the Vice President, the establishment's pick still couldn't pull off a win in Alabama.

Moore of course was backed by Breitbart's own Steve Bannon who promises Alabama, "Just the beginning."

(BEGIN VIDEO CLIP)

STEVE BANNON, FORMER WHITE HOUSE CHIEF STRATEGIST: You're going to see in state after state after state, people that follow the model of Judge Moore that do not need to raise money from the elites, from the crony capitalists, from the fat-cats in Washington, D.C., New York City, Silicon Valley.

(APPLAUSE)

(END VIDEO CLIP)

KING: Now if Bannon gets his wish this loss might set up chaos in the Republican Party, certainly set up some chaos in the West Wing.

Sources telling CNN, President Trump spent the evening angry, venting about the loss and that he went to bed, excuse my language, quote, "Embarrassed and pissed."

Senior White House Correspondent Jeff Zeleny, joins me now, live from the White House.

Jeff you're part of the team that's reporting this, take us inside the President's reaction and what comes next?

JEFF ZELENY, CNN SENIOR WHITE HOUSE CORRESPONDENT: John, those two words that you just said, sum it up pretty succinctly there. The President doesn't like to lose in fact he's not used to losing in special elections but he's also getting a taste that - of what President Obama got as well.

It is difficult for a president, a sitting president to campaign for anyone and hope that their supporters followed along.

Voters time and time again do what they want to do.

There's no question though the President is very upset about this. He was flying back to Washington last evening after doing a RNC fundraiser, some $5 million there, he was watching these returns come in and was frustrated, venting at everyone, of course Mitch McConnell the Senate Majority Leader, blaming pretty much everyone John, except himself.

That is one thing I do not hear here at the White House this morning, talking to a variety of people, other Republicans close of this White House, blaming the President himself.

He has not accepted much blame for the defeat of healthcare. He's not accepted much blame for much of anything.

But the real question here going forward is, 'will this president get behind sitting Republican senators?'

And a couple minutes ago I just had a conversation with the president's Senior Advisor, Kellyanne Conway here at the White House and she said that Republican senators should take this as a sign that he will be with them.

But then she stopped short of saying, 'if he will endorse all city Republicans senators' or if this was simply an endorsement for Senator Strange but she did say the President felt loyal to Senator Strange because he had voted with the president, arrived in Washington about the same time of course and she said, "He had no regrets for doing that." But we do know behind the scenes, much anger and again that big question, 'will the president keep doing that or really follow Steve Bannon and endorse some outsiders,' John.

KING: Fascinating to watch in the days and weeks ahead.

Jeff Zeleny live at the White House. Appreciate it Jeff.

With us to share their reporting on their insights, CNN's Dana Bash; Michael Warren of The Weekly Standard; CNN's MJ Lee; and Margaret Talev of the Bloomberg News.

It's a stinging defeat for the president, a humiliating embarrassment for Mitch McConnell who most likely is the one who will have to deal most often with Roy Moore if he wins, he has to beat a Democrat in December but Alabama being what Alabama is, most people think the Republican will win in that state.

Let's start with what comes next. We will then get back to the recriminations and the blame (for it) but Steve Bannon took a high- profile here which is very unusual for Steve Bannon because he wants to use this as a springboard.

I was talking the other day about how he's already trying to recruit a stronger conservative challenger in Arizona...

DANA BASH, CNN CHIEF POLITICAL CORRESPONDENT: Yes.

KING: ... to run against Jeff Flake because they don't think Kelli Ward who is in the race right now is strong enough to do that.

BASH: Yes.

KING: You have some reporting that he's trying to turn this into a national crusade.

BASH: Absolutely. He made that pretty clear last night. But he's already flying to - flying out west to Colorado to work on recruiting Republican candidates - conservative candidates I should say, four western states, four western races like Arizona and then he's going to meet and talk with like-minded candidates in Tennessee, in Mississippi.

He also is going to try to stay focused on Alabama because as you said obviously it's a red state, there hasn't been a Democrat there, elected from the senate for a - for a couple of decades.

But Roy Moore is a unique individual in that he certainly could bring out Democrats to the polls to vote against him so they're going to focus on that.

And then he's - he's - Steve Bannon is also going to speak at a conference of social conservative grassroots leaders about the ground- game, I'm told, needed to, quote, "Defeat elites," so he is completely you know, hoping to use the win last night as some fuel to convince people that this is an OK fight to take and that the establishment needs to be taken down.

KING: But this an unfair question in some way but I've got to ask you, what's the conversation among conservatives about this, it depends on which conservatives...

BASH: Exactly.

KING: ... we're talking about obviously in that sense but Steve Bannon says, "He's not out to oppose the president, he's out to help the president" but he opposed the president in Alabama, he opposed the president's choice and he opposed what the president wanted, a more mainstream conservative, not a guy who is going to come to Washington with a pitchfork and challenge every decision the leadership tries to make.

If he goes on and does this, couldn't the president step forward and say, "Steve Bannon, if you're on my side, 'stop.' 'Stop. Do not campaign against the incumbent Republican candidates,'" but he hasn't done that?

MICHAEL WARREN, SENIOR WRITER AT THE WEEKLY STANDARD: No. But that's not necessarily what Trump necessarily wants. I mean Trump is a...

KING: He wants chaos?

WARREN: He wants Flake for instance in...

KING: (INAUDIBLE).

WARREN: ... Arizona so if he and Steve Bannon could be on the same side of that.

Now remember what did Steve Bannon - who again came into this race late, a lot of sort of the conservative talk radio world was actually on the side -- in...

KING: Right.

WARREN: ... the primary of Mo Brooks the third-place congressman who came in third place in the primary, he didn't make it to the runoff.

So, you know, this is something that's - Bannon and others were doing and saying they were supporting Roy Moore in the name of Trump...

BASH: Yes.

WARREN: ... and Trumpism.

I do think it's important to look at Alabama as a very unique situation in the sense that special election, sort of (awe) - and you saw that it's hard to get too much you know, information about what 2018 and primaries will be like.

And also, Roy Moore had this weird position of being more well-known, more established in many ways in Alabama Republican voter's minds than Luther Strange. Add to that, all of that as well the sort of corruption surrounding

Luther Strange as to what - basically the last act of Bob Bentley, the very corrupt Alabama governor who appointed him to the 'Sessions' seat right before he resigned; Luther Strange was the attorney general investigating Bentley for a number of scandals.

BASH: Just to quickly add to how unique this might be and that he might not be - if this wasn't him going against the president.

My understanding is that Bannon believes that when he was fired, left the White House, that the president got advice from the establishment Republicans...

UNIDENTIFIED MALE: (INAUDIBLE).

BASH: ... "Please endorse Strange" and that from the minute the - not long after the president did that, despite what the White House is saying now, he...

UNIDENTIFIED MALE: (INAUDIBLE).

BASH: ... realized that he was going against the people who elected him.

KING: Roy Moore campaigned on that saying...

BASH: Exactly.

KING: ... they -"They'd gotten to the president." Essentially, they've you know, convince the president otherwise, they've - not - he didn't use a term but they brainwash the president, 'this is the right thing for him.'

I agree, Alabama is unique however we live in Washington, D.C., where we know politicians, they see something like this happen...

BASH: Yes.

KING: ... and a bed-wedding is a common thing that happens here in what's a highly-technical term in politics.

I just want to show you, some of the Republican seats up for - up in 2018.

Just yesterday Bob Corker said, "I'm retiring."

He was going to face a conservative primary, never mind he's out.

Orrin Hatch, we're waiting for his decision in Utah. A lot of people I talked to late last night thought that the result in Alabama would convince Orrin Hatch, "Not worth it. This is just - it's time to go. This is crazy." We'll see how that one plays out.

If you look they are trying to - Steve Bannon wants a conservative challenger to Dean Heller.

He wants a stronger conservative challenger to Jeff Flake, you see right there.

Roger Wicker, they tried this against Thad Cochran in Mississippi, they want to go back after it again against Roger Wicker.

You look at all these races right here, what does it affect here?

We're going to get in a minute to conversations about the collapse of Obamacare.

Can we move on to tax reform?

When you're in this quicksand environment and you're not sure what's happening in your own party, how do you get things done?

MJ LEE, CNN NATIONAL POLITICAL REPORTER FOR CNN POLITICS: Yes. Well we've seen over the last couple of months and it's become very clear to Mitch McConnell and to President...

KING: Right.

LEE: ... Trump that the Republican Party right now is very, very, difficult to govern.

I think it's very fascinating that the President has been tweeting angrily about this filibuster rule except that that was not even an issue in this latest Obamacare fight.

The problem was not that Republicans couldn't get 60 votes on a healthcare plan. The problem was that they couldn't even get 50 votes on a promise that they have been making for many, many, years.

And I think one thing to point out about Mitch McConnell and why this is so tough for him, in the next couple of months he's going to have to decide, is he actually going to spend money to boost Roy Moore, is he going to...

KING: Yes.

LEE: ... actually, talk to him, and campaign for him when there is already so much bad blood there because he went all out...

KING: Rand Paul is...

LEE: ... for Luther...

KING: ... an example...

LEE: ... Strange.

KING: ... that he will. Rand Paul is an example that he will. He opposed Rand Paul in the primary in his home state of Kentucky. Yet Mitch McConnell gets the math, he understands he needs the Republican. He will...

LEE: Right.

KING: ... bite his tongue, so always pride and do what he has to do to keep that seat in Republican hands.

But look, you've mentioned Mitch McConnell's challenge. Roy Moore is likely to win this seat. Doug Jones is the Democratic candidate, we'll see what happens as it plays out.

Dana makes a key point, if you look - we'll get to Judge Moore's history a bit - little bit later in the program.

There's a lot to motivate Democrats. There are a lot to give middle voters. Center-right voters thought about that race.

But if he comes to the Senate, Mitch McConnell, he just went through the Obamacare, listen to Ron Johnson here, Republican of Wisconsin saying, "Oh, no big deal."

(BEGIN VIDEO CLIP)

SEN RON JOHNSON (R) WISCONSIN: In our conference we already have a pretty broad spectrum of opinion and ideology so you know, we've got a bunch of cats here and we'll - and whoever comes in hopefully it will be Republican, hopefully Judge Moore will win. He'll just be one more cat into the mix.

(END VIDEO CLIP)

KING: Just one more cat in the mix.

MARGARET TALEV, WHITE HOUSE CORRESPONDENT FOR BLOOMBERG NEWS: Yes. It sounds like what everyone signed up for, right?

There is like two different kind of calculations here.

One if you're Mitch McConnell or Paul Ryan, how do you stay in leadership without getting toppled, blown up from inside your own caucus and are you in greater vulnerability in general elections if the controversial figures like this take up too many seats - are winning too many...

KING: Right.

TALEV: in primaries, (if you prefer)...

KING: Every Republican candidate running, "Judge Moore said," this; "Judge Moore said," that; "You agree with Judge Moore on this"...

TALEV: ... and it - so...

KING: ... so?

TALEV: ... it's not just in the - it's not just in those states, it's in the other states that are more like swing states.

But for President Trump it's a completely different issue which is what's his hammer if he's backing candidate who don't win primaries, does anyone need to be afraid of him?

KING: Right.

TALEV: Or does he end up gravitating right back to Bannon and we have seen him experimenting with cutting deals with Democrats where it makes sense for him and scaring Republicans into a kind of a submission that way.

Does that end?

Did that end effectively last night?

And if not, how does he juggle his?

KING: Right, another thing we saw last night is that, no criticism to the Trump campaign. They did a masterful job within the election however, he rode this wave, he didn't create this wave.

He may have built the wave but he didn't create this anti-Washington, anti-establishment, wave especially among Republican voters and we saw in Alabama last night it still very much exists; we'll see.

(We go next to,) President Trump gives a big speech on his tax plan later today but will it go over any better than his healthcare plans?

(COMMERCIAL BREAK)

KING: Welcome back.

President Trump heads to Indiana this hour to promote the brand-new Republican outline for tax reform.

It's a giant policy priority in its own right and it's also a bid by the President and the Republican leadership in Congress to turn the page from yet another stinging and embarrassing failure on their promise to repeal and replace Obamacare.

Here are the big goals for the new tax outline:

Cut the number of individual tax rates from seven from three;

The proposed new rates, 12 percent, 25 percent, and 35 percent;

Double the standard deduction with the goal of reducing the number of taxpayers who itemize;

A substantially higher child tax credit. It would eliminate the popular - some popular tax breaks like the deduction for state and local income taxes you pay; and

It slashes the corporate tax rate from 35 percent to 20 percent.

That policy outline, just a starting point now for Congress.

The political reality is this, and it's pretty clear, Republicans fail repeatedly to overcome their own healthcare policy divides and tax reform is just as complicated, some even say, "More so," can the Republican family learned the lessons of Obamacare collapse and figure this one out?

WARREN: I think they've learned a few lessons which is they are coming into this with a little you know, clearer eyes, a bit more of a plan, leaving things a lot more open so as to you know, they are called "The Big Six," you know, the congressional leaders and White House leaders who sort of came up with this plan.

But they've left a lot of things open so that all these members don't feel like they're being dictated to, "This is what the tax reform package must be."

They're hoping I think - I think with a little degree of optimism, they should be, that Republicans can sort of figure this stuff out and come together around something.

There is a little more agreement on taxes than say on healthcare among Republicans and having a plan mean they are you know, much better off than they were with Obamacare repeal for which they didn't have a plan.

KING: And yet - and yet let me play - I don't know whether this is a contrarian or just studying recent history.

Number one you had Matt Drudge this morning, look he sees Steve Bannon out there causing all this uproar, anti-establishment uproar in the elections.

Matt Drudge (streamed), "Keep Obama - first keep Obamacare, now raise taxes on top earners? At least the illusion, there's a difference between the party, it's finished, once and for all."

That's not a unified conservative message there.

Plus, we are also told that even though this outline says a 20 percent corporate rate, the President keeps saying in private meetings, "I'm going to keep pushing...

BASH: (Fifteen percent).

KING: ... for 15 percent. That's what happened in the healthcare debate every time the speaker said, "Mr. President, I have a deal; it's really fragile, don't undermine this," the President will say, "It's open for negotiation."

What's?

BASH: You're - that's right. Well that's true and maybe this is part of the lesson that you do have to work on those and the notion that there is - could be a tax increase in there for high earners, I think this is another example frankly of the split in the Republican Party.

It is anathema to establishment Republicans that they would raise taxes at all on anybody but not on necessarily for Trump Republicans...

KING: But...

BASH: ... not necessarily for white working-class workers as Steve Bannon calls them, "The Hobbits."

I mean they probably look at the idea of raising taxes on the wealthy and say, "OK, great. Lay...

LEE: And...

BASH: ... it on."

LEE: ... Republicans on the Hill have to be so frustrated because we're not even - this is day one, or literally day two of them rolling out this tax plan and the President has already made things difficult for them because of the mix messaging right.

He's out there saying, "High-income earners, the highest earners will not get a break," and what they want to do is you know, lower the highest rate to 35 percent.

This is exactly a repeat of what we saw the president do during the healthcare rollout. Back in January remember how surprised we all were when the President gave an interview saying, "Everyone is going to have insurance. Nobody's going to lose coverage."

That was so not the Republican message.

KING: Right, and then...

BASH: (That is not possible).

KING: ... and then the House passed a bill, the President through them apart in the Rose Garden and...

BASH: Yes.

KING: ... then he called it, "Mean," as Dana noted, it's anathema to Republicans to raise taxes on anybody, especially on the rich what are you know, big donors to the Republican Party but here's the president?

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES OF AMERICA: I think the wealthy will be pretty much where they are.

Pretty much where they are.

If we can do that, we'd like it.

If they have to go higher they'll go higher, frankly.

We're looking at the middle class and we're looking at jobs.

(END VIDEO CLIP)

KING: "If they have to go higher they'll go higher." Now the Democrats are not going to join the Republicans on tax reform but there's certainly going to take those words from the president and poke the Republicans every time they tried to cut taxes.

TALEV: Yes but Dana is right, that's very much the Steve Bannon model for the approach that (they're) talking and it's striking to hear President Trump speaking so publicly about it now because when Bannon was still at the White House, President Trump really was not speaking, vocalizing that perspective.

I look at the calendar as a clue for the re-strategizing of this and how long they think it's going to take because you remember earlier this spring, during those rosy, dewy, days when the repeal of healthcare vote was just one vote away, they were looking at like October as the time right, so they were going to come back after Labor Day, like hit the ground running on tax reform.

(Bada bing, bada boom), before the end of the year done everyone can run for mid-term but nobody's really holding that out as a date anymore.

And if you're looking at the next debt ceiling as kind of a companion timeline or goal-post to the passage of tax reform...

KING: Not an easy...

TALEV: ... you're looking at the...

KING: ... thing for the Republicans.

TALEV: ... if you're looking at those together, we have seen that slide to...

KING: Right.

TALEV: ... The end of the year, into February, maybe to April now, I think they're giving themselves some extra time if they need it.

KING: Well they probably need it because remember the President said, "Obamacare repeal would be easy."

His Treasury Secretary said, "We'd have tax reform by August," I believe we are almost to October and we have none of those things.

But we will see how this debate goes. They had a big launch today, we'll see how it goes.

Up next Puerto Rico in desperate need of supplies, as supplies run out. Now crews racing against the clock to save lives and to get in desperately needed food, water, and medicine.

(COMMERCIAL BREAK)

KING: Some signs of hope in Puerto Rico.

A short time ago the U.S. Customs and Border Production Agency delivering more than 3,000 pounds of supplies including water, MREs, and baby supplies.

The need there is enormous. Look right there, at the video showing the words, "H-E-L-P," painted on a rooftop as crews try to carry out rescue operations.

Puerto Rico's Governor echoing calls that, "People need help and he need it now."

(BEGIN VIDEO CLIP)

RICARDO ROSSELLO, GOVERNOR OF PUERTO RICO & PRESIDENT OF THE NEW PROGRESSIVE PARTY: Puerto Ricans are proud U.S. citizens.

After Irma we helped out others, about 4,000 U.S. citizens that were stranded, we gave them shelter and food. During Harvey, we sent out resources to Texas as well so that they can help in the rescue process.

And now it's the time to take a quick decision and help out Puerto Rico...

(END VIDEO CLIP)

KING: CNN crews are spread across Puerto Rico trying to assess the damage and the needs, including CNN's Rosa Flores in San Juan.

ROSA FLORES, CNN CORRESPONDENT: John, we are in San Juan, Puerto Rico with a group of customs and border protection agents. They are here on a dual mission.

First of all, to drop off much-needed supplies. As you know, much of this island is without power. People are going hungry. People are going thirsty so 3,500 pounds of supplies were dropped off.

The second part of this mission is to evacuate the family members of federal workers. You see some of their baggage already in the cargo portion of this plane.

Now Custom and Border Protection usually uses this Dash 8 plane for intelligence-type mission. This time it is being used for humanitarian efforts to evacuate some of the people in the hard-hit areas.

Now about 28 people will board this plane and will be able to go back to the mainland but as you know, there is so much need, this is just one small portion of the people who have been spending nights, days, here in San Juan, Puerto Rico's airport trying to get out.

We will be on this flack - flight back to Florida and we will keep you posted on the latest.

John?

KING: Rosa Flores, among our reporters on the ground doing great work. The President of the United States bristles at the suggestion, he cares more about his fight with the NFL players than he does about those urgent needs in Puerto Rico.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES OF AMERICA: (No). I wasn't preoccupied with the NFL, I was ashamed of what was taking place because to me that was a very important moment.

I don't think you can disrespect our country, our flag, our national anthem.

To me the NFL situation is a very important situation. I've heard that before about was I preoccupied; not at all, not at all.

I have plenty of time on my hands. All I do is work.

(END VIDEO CLIP)

KING: The President considers tweeting part of his work and that's where we get the best sense of what is most on his mind.

Here are the numbers, since hurricane Maria hit the President has treated 26 times about sports and the national anthem --