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The Tax Deal; FCC Votes to Change Internet Regulations; Putin Comments on Investigations. Aired 1-1:30p ET

Aired December 14, 2017 - 13:00   ET

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


(COMMERCIAL BREAK)

WOLF BLITZER, CNN ANCHOR: Hello, Wolf Blitzer. It's 1:00 p.m. here in Washington. Wherever you're watching from around the world, thanks very much for joining us.

We start with Republicans hitting the home stretch on their $1.5 trillion tax plan. The deal is mostly set putting the House and Senate bills together.

They've reached agreement on several key points, including lowering the top individual rate to 37 percent from 39.6 percent. Setting the corporate rate now at 21 percent down from 35 percent.

They've also agreed on state and local tax deductions, lowering the estate tax threshold and eliminating the health care individual mandate.

But one big hurdle still needs to be cleared, the final votes which includes questions about the health of the Arizona senator, John McCain.

Let's go to our Congressional Correspondent Phil Mattingly. He's closely watching this up on Capitol Hill.

Phil, we get to the -- we'll get to the votes in a moment. But first, what response are you hearing there today to the deal? What's the reaction?

PHIL MATTINGLY, CNN CONGRESSIONAL CORRESPONDENT: Well, mostly, Republicans are still trying to digest things, Wolf. This has been moving at a very, very quick clip.

And the reality is the full proposal has still not been unveiled. That's not expected until tomorrow.

Republican leaders, though, feel very good about they -- where they will end up. You mentioned, the state and local tax deduction. They expanded the eligibility for that.

That should hit a lot of the concerns from Republicans in the House, from states like New Jersey, New York and, most importantly, perhaps, California. So, they feel good about where that is.

But there's no question about it. The details here matter a tremendous amount. Not just for members of Congress, but for pretty much everybody in the country.

And until all of the details are out, it's very likely you aren't going to know where things are going to end up.

I will say though, Wolf, the expectation is, has been and will continue to be, in the days ahead I'm told, that they will move on this.

On Monday, they expect to have this to the president's desk, as soon as Wednesday.

The big question now is, what's actually going to be in the 500-plus pages beyond the topline deal points that already you noted -- Wolf.

BLITZER: All right. I want you to stand by, Phil, because I want to get some more specifics on the proposed deal. We'll get back to you in just a moment.

Jim Tankersley is with us right now. He's the tax and economics reporter for "The New York Times." Lots of questions, you know, Jim, about where this goes. They've now set it at 21 percent, the corporate tax rate.

The president originally wanted it at 15. He agreed to 20. Then, there was talk of 22. Now, it's down to 21.

JIM TANKERSLEY, TAX AND ECONOMICS REPORTER, "THE NEW YORK TIMES": Yes, 21 has emerged as an important place here for the Republicans, because they needed money.

They've had to give revenues from other parts of the bill away to assuage concerns from wavering senators, wavering members in the House.

And so, 21 just seemed to be that resting point that they came to and the president said he was OK with it.

BLITZER: What about the individual -- the highest individual rate now -- which is currently 39.6 percent, going down, what, to 37 percent?

TANKERSLEY: So, this was a little bit of a surprise because neither the Senate nor the House bill came down this far.

But there were complaints, especially from higher-income people in New York, people the president runs with in his circles, who thought that they weren't getting enough out of this bill. And so, this appears, possibly, to be a response to that.

Now, it's a 37 percent top rate which would be a tax cut, again, for the highest earners.

BLITZER: And what's the final decision on very sensitive issues, including education-related deductions, graduate school, tuition waivers, student loan deductions, teacher spending deductions? A lot of folks are really concerned.

TANKERSLEY: So, we don't know all of those provisions yet, but we know some of them.

For example, on graduate student tuition waivers, we know that they will not be taxed. That's the Senate version. The House had made that taxable. That was something people were -- graduate students were, in fact, very worried about.

In most cases so far, what we've seen is, from the details we've learned, the tie goes to the Senate bill. And so, the Senate tends to preserve more of those deductions, for example, medical expense deductions, whereas the House eliminated more of them.

BLITZER: All right, stand by for a moment.

I want to go back to Capitol Hill. Phil is up there.

The Senate vote is really the focus right now. Two senators, they have been missing some votes due to health-related issues. Others are still considered to be on the fence, even though they voted yes the last time.

Then, there's the vice president Mike Pence, he's now postponing a trip to Israel and Egypt. Where does all this stand?

MATTINGLY: Yes, Wolf, you have to look at it through the context of the razor-thin majority, the Senate majority leader, Mitch McConnell, is actually working with here. Only 52 votes. They're going to need 50, with the vice president being able to cast the tie-breaking vote here.

So, you look at, kind of, four key senators right now who are still outstanding, Susan Collins, who made very clear that she had some specific ask in the Senate bill, and also has some specific ask related to health care legislation outside the tax bill.

We'll have to wait and see whether she gets that.

Senator Jeff Flake, he had some issues on the gradual phase-out of the expensing provision, where that ends up standing.

Senator Marco Rubio, he's long been considered a solid yes vote on this but he has concerns about the refundability of the child tax credit.

And then, you have Senator Bob Corker. Wolf, you know well he voted against the initial plan on deficit reasons. Those haven't changed.

[13:05:05] Those reasons, those deficits that the bill would create haven't changed at any point during these negotiations. He's expected to be a no but still saying he's looking at the proposal.

I think the key issue right now is the health of the two senators, Thad Cochran and Senator John McCain. Senator Cochran's spokesman, earlier today, told our colleague, Ted Barrett, he fully planned on being back to vote on the tax bill next week.

He is in Washington right now. So, that's the expectation. The big question, Senator John McCain. He's still at Walter Reed Hospital, recovering from the treatment that he continues to get for his cancer diagnosis.

There is no ETA, in terms of when he would actually return to the Senate. His office says he's trying to get back as soon as possible.

But because of that, the idea has always been the Senate would go first. They have tougher rules to deal with. They have more restrictive rules to deal.

The best, kind of, case scenario would be they push it through the chamber first. That is now an open question, according to Speaker Paul Ryan. Take a listen.

(BEGIN VIDEO CLIP)

REP. PAUL RYAN (R), WISCONSIN, SPEAKER OF THE HOUSE: It's all about timing and managing absences in the Senate. So, we're basically being flexible for the majority leader. I've talked to Mitch a couple times about this. We're simply being flexible to honor their concerns about managing their schedule and some possible absences.

(END VIDEO CLIP)

MATTINGLY: Now, Wolf, I think it's important to note the very tight timeline the Republicans are working on here. Now, this is an artificial one. One they set themselves.

But given the, kind of, large magnitude of the other year-end items they have to deal with, they expect to deal with by the end of next week. They still plan to move this early next week, when it comes to the tax proposal. That's where those absences or potential absences are coming into play right now.

We will still have to see how all that shakes out. I will say that, according to both the House and Senate leadership officials and negotiators that I've been talking to, they are confident the votes will be here.

But as we've seen, as of now, they aren't. There is still work to do -- Wolf.

BLITZER: And you think the votes will go next, what, Monday, Tuesday, Wednesday of next week? First, what, in the House and then in the Senate? Is that what they're planning?

MATTINGLY: Look, the plan, at least over the course of the last six or seven days, has been for the Senate to go first, starting on Monday. The House to follow, likely on Tuesday. A bill signing at the White House by Wednesday.

I think the big question that the speaker is referring to and that we're hearing right now is if other senators are absent, if the votes aren't necessarily there, perhaps the House goes first. But that raises some serious issues, based on whether or not the bill actually, kind of, falls into place, related to Senate rules. That's why they always wanted the Senate to go first. I think the preference in both chambers is for the Senate to go first.

Right now, that's an open question. We'll have to see over the course of the next 24, 48 hours, whether that issue is resolved or solved all together, before we really know, kind of, the exact step-by-step process.

But I will say, there's no question right now, the White House and leaders on Capitol Hill expect the bill to be at the White House for a signing ceremony likely on Wednesday -- Wolf.

BLITZER: All right, we'll see if it is.

Phil Mattingly, thanks very much. And Jim Tankersley, thanks to you as well.

President Trump may be on the verge of his first legislative win. But he also faces major challenges. First of all, polls show most Americans don't like the tax bill. In our Quinnipiac University poll, just 26 percent approve the plan.

The president's own approval rating is at historic lows right now. The latest Monmouth University poll is at 32 percent, his job approval numbers.

So, what does all this mean heading into 2018? Let's talk about that and more with Susan Page, the Washington Bureau Chief for "USA Today" and our CNN Chief Political Analyst Gloria Borger.

It's not very popular, if you believe the polls right now, this tax bill, even though the president, the Republicans keep saying to the American people, especially the middle class, you're going to be paying a lot less tax.

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: And if you look deeper into these numbers, the people who have problems with it are Democrats and independent voters.

And so, what you see from this White House is, really, a base strategy which is appeal to the base. These vote -- our voters want this tax cut. They believe it's going to help them and that's what they're doing.

But going into 2018, and I harken back to 2010 and Barack Obama, Obamacare, they had the same kind of strategy with their base. Their base wanted the Affordable Care Act. They gave them the Affordable Care Act. And Barack Obama lost 63 seats in the House.

BLITZER: We all remember that.

You know, the reason it's not that popular is because a lot of Americans have accepted this notion, this is a tax plan, tax cuts that will benefit the wealthy, benefit the corporations, not necessarily them.

SUSAN PAGE, WASHINGTON BUREAU CHIEF, "USA TODAY": So, here's the gamble the Republicans are making. The tax cut will do what they predict it will do which is improve the economy.

And the fact is, if you see a surging, a great economy going into the mid-terms, that does a lot to help Republicans even in a tough year.

But if it doesn't, that's a problem. You know, this is not just an unpopular bill. This is the least popular bill that has been passed by Congress, in terms of a major bill, in the past 30 years.

You know, it makes Obamacare look popular when it was passed. Obamacare was in -- it was about 10 points higher --

BORGER: Higher.

PAGE: -- than the tax cut bill is now.

[13:10:00] So, this is an enormous risk, on the part of the Republicans.

BLITZER: Where does the stunning Alabama Senate race loss for Roy Moore, the Republican candidate, where does that fit into all of this?

BORGERF: Well, I think you can argue it puts the Senate more in play here.

I mean, look, you know, the Democrats have a -- have an uphill struggle to win control of the Senate. Because they have 10 Democrats who are running for reelection in states that Donald Trump won. So, that's a -- so, that's a problem for them.

But you do see a motivated Democratic base. You do see a 40 percent turnout in the state of Alabama in this election on a random Tuesday. And so, you do see that the Democratic base is much more motivated right now than the Republicans. And you do see this slippage among independent voters.

So, I think it's all part and parcel of the kind of environment that we are seeing going into 2018.

BLITZER: Is it likely to have any impact in the short term right now, the loss for the Republicans in Alabama, on what's going to happen with the tax cuts?

PAGE: I think it makes it more likely it goes through. Because Republicans are looking at the possibility of going into the mid-terms having achieved no major legislative victory. Even though they control the House, the Senate and the White House.

And that is why, I think, there is no momentum behind passing a bill that has many details we don't even know about. We don't know how the Senate hits the $1.5 trillion deficit number that they have to meet in this bill. There's a -- there are a lot of important details about this bill that have not been explored and analyzed. But it looks like it's going to pass anyway.

BORGER: And also, don't forget, it's going to take effect very quickly. There are going to be lots of unintended consequences that people are going to suddenly see. And it's -- and that can play out in a way that isn't -- that isn't particularly helpful.

But I also think that there may be some members who are less afraid of taking on Donald Trump. I mean, I know they all think that they got to get to the big goal because they have to get something done.

But there may be members, like a Flake, or a Corker who's leaving anyway, or a Collins, although she seems to be predisposed to vote for this, who may be saying, you know what? He might not hurt me as much anymore.

PAGE: But with this divided Republican Party, I think it makes the calculation so complicated --

BORGER: Yes, it is.

PAGE: -- for Republicans. Because you've got Steve Bannon out there who's still talking about challenging Republicans in primaries next year. You've got the McConnell faction that is under fire by some and yet has succeeded in a way.

I mean, it's a sign that the -- that Republicans count it as a victory. That they -- that the Republican candidate was defeated for the Senate.

BLITZER: Susan, where are all the Congressional Republican deficit hawks on this? Because this tax bill --

BORGER: Under this paper here.

BLITZER: -- supposedly is going to increase the national debt by at least $1 trillion, maybe $1.5 trillion, that according to the Congressional Budget Office, the Joint Committee on taxation. These, you know, nonpartisan independent auditors.

Yet, they're willing to go along with it. It's not paid for, as they say.

PAGE: You know, it's a sign of how Donald Trump has redefined what the Republican Party stands for. This is not the party of fiscal discipline. It's not the party of free trade. It is the party of Trump. And that has meant some fundamental differences on issues like that one.

BLITZER: Are you surprised by that? That a lot of these deficit hawks, all of a sudden, well, we can go along.

BORGER: But first of all -- BLITZER: And they come up with these -- this notion that there will be dynamic scoring. The economy will be great. A lot more money will be coming in.

BORGER: Well, first of all, you see Bob Corker. That's the issue that he's, kind of -- that's he's, kind of, hanging back on.

By the way, you're cutting taxes in the middle of a booming economy. That is also something Republicans would say, wait a minute. We normally would do this to juice the economy. That's what you normally do.

And so, it has turned the party on its head. And I think Donald Trump has said, you know, I promised to move the embassy in Israel. I promised to cut taxes. I haven't been able to deliver on health care. I want to do what I promised I would do. And they're, kind of -- they promised it, too.

BLITZER: He's delivering a lot of those promises, deregulation and other related issues. But this is, clearly, going to be a huge vote next week. Let's see if it happens and what happens as a result.

Gloria, Susan, guys, thanks very, very much.

We expect, by the way, to hear from the White House press secretary, Sarah Sanders, later this hour. You're looking at live pictures from the briefing room. Reporters still haven't really started coming in. We'll have live coverage of that briefing. That's coming up later this hour. Stand by for that.

Meanwhile, the Russian president, Vladimir Putin, derives what he calls, quote, "espionage mania" when it comes to claims that Moscow tried to influence the 2016 U.S. presidential election. We'll get a live report from Moscow when we come back.

[13:14:50]

(COMMERCIAL BREAK)

[13:19:07] BLITZER: There is breaking news we're following right now.

We've been watching the Republican-led Federal Communications Commission where the commissioners just voted on the future of how the Internet is going to be regulated. A panel voted along party lines to repeal what's called Net Neutrality. The Obama-era regulations were designed to keep the Internet open and fair. Republicans, though, argue the rules stifle innovation.

Once again, the FCC voting along party lines, 3-2, to repeal Net Neutrality. A very significant development.

Our senior tech correspondent Laurie Segall explains how all of this will affect you.

(BEGIN VIDEOTAPE) LAURIE SEGALL, CNN SENIOR TECH CORRESPONDENT (voice-over): What is Net Neutrality? It has nothing to do with a volleyball or a tennis court. The "net" refers to the Internet, something that's become as necessary as water and power for most of us. The "neutrality" part is about keeping the net the way it is today. It's a set of rules that went into effect in 2015 to prevent speed traps on the information superhighway. In other words, speeding up access to some sites and slowing down access to others, or blocking certain cites entirely.

[13:20:15] So, are these rules a bad thing? It depends on who you ask. The companies that deliver your Internet, like Comcast, Verizon and AT&T have spent millions in lobbying money to get rid of Net Neutrality, arguing that having the government micromanage their business is not good for them or their consumers.

On the other side are Internet giants like FaceBook and Google, streaming services like Netflix and former President Obama. They all argue the Internet is a public good and should be regulated like one. They also say that companies that own the pipelines could play favorites.

For example, a content provider like Netflix is in direct competition with Comcast, which owns NBC Universal and controls access to the Internet for over 20 million customers. You can imagine a scenario where NBC would want to speed up streams of its shows and slow down streams of its rival, Netflix.

Now, Netflix can afford to pay for the fast line. It's worth more than $70 billion. But the next Netflix, some awesome startup, can't.

(END VIDEOTAPE)

BLITZER: All right, Laurie's joining us right now.

Laurie, a very significant development now.

First of all, will this vote be challenged?

SEGALL: I can say, I am almost positive that it will. The could definitely be legal fallout here because the stakes are simply so high and you've had so many folks speaking out against this. You know, I've covered technology. You look at the tech company who have been very outspoken about the stakes here. You had the telecom industry in favor of this for a long time. They said that the current regulations, you know, get in the way of daily business. That they're stifling innovation, which you heard a little bit about.

But you have the tech companies on the other end who say that, you know, this gives Internet providers too much power, too much control over the way online content is delivered. It creates a tiered Internet. So I think you're definitely going to see that challenge.

And we already heard a lot of controversy, Wolf, ahead of this vote. The FCC actually went out on their website and asked for public opinion. They wanted the public to weigh in. And an investigation showed that you had 20 million comments and millions of those comments were bots and they were fake. So you had Democratic lawmaker calling for them to delay the vote. they didn't delay that vote.

So I think this is the beginning of, you know, a longer process. But, you know, the stakes are very high. These regulations were put into place in 2015 under the Obama administration to ensure a fair and open Internet. So it depends on whose side you're on and who you're asking. But you can certainly bet that this will just be -- kind of the beginning of what we're hearing about this because today's a big day for all of us as Internet consumers.

BLITZER: Well, assuming their -- forget about whether or not it's going to be challenged, when will this decision, this vote, this 3-2 vote by the FCC, when does it go into effect, eliminating what's called the Net Neutrality?

SEGALL: You know, I think we'll have to see to see about the legal challenges, to see, you know, what happens. So I don't think we're going to see anything immediate right now.

But, you know, Net Neutrality has always been something that has been tough for some folks to understand and people don't know too much about it. But why it's important to talk about it is because it really does impact all of us and how we browse the Internet. You think about right now, under the current rules, or under -- as they were, you know, the way you watch Amazon, Hulu, all of these streaming services, that could change. You know, you could be charged for one. It would allow companies to essentially charge us more money to make our streaming videos faster. And it could, in a sense, as many of the tech companies, create a tiered Internet.

So I do think, you know, this is a big moment today but we're going to hear a lot more in the coming weeks. Probably, you know, we've already seen protests. I can imagine we'll hear more protests. That it won't be long until we start beginning to hear again from the big tech companies, FaceBook, Google, I'm sure they'll all be weighing in very shortly after today's vote, Wolf.

BLITZER: Yes, we'll be getting a lot of reaction and we'll, of course, have all of that. And we'll see how this impacts the average person out there.

Laurie, thank you so much.

Laurie Segall reporting for us on a significant development.

We may be hearing about this at the White House briefing that's coming up. Sarah Sanders, the press secretary, getting ready to answer reporters' questions. We'll have live coverage of the daily briefing right here on CNN. That starts later this hour.

Also, the Russian president, Vladimir Putin, derives what he calls espionage mania when it comes to claims that Moscow tried to influence the U.S. presidential election. We'll get a live report from Moscow when we come back.

(COMMERCIAL BREAK) [13:28:56] BLITZER: The Russian president, Vladimir Putin, offering some kind words for his American counterpart, President Donald Trump. President Putin spoke about what he calls serious achievements by President Trump. He made the comments during his annual end of the year news conference. Putin also took a shot at the investigation over possible collusion between the Trump team and Russia. Listen.

(BEGIN VIDEO CLIP)

PRESIDENT VLADIMIR PUTIN, RUSSIA (through translator): This is all dreamed up by people who are in opposition to Trump, so as to make sure that everybody thinks that what he's doing, what he's working at, is illegitimate. This is very strange because it's being done by people who aren't working against the interest of their own country and against the dully elected president of the country.

(END VIDEO CLIP)

BLITZER: Our international correspondent Phil Black is joining us now live from Moscow.

So, what else did we hear from the Russian president about Russian -- Russia/U.S. relations?

PHIL BLACK, CNN INTERNATIONAL CORRESPONDENT: Well, Wolf, you heard another strong rejection of any -- any suggestion that Russia meddled in the 2016 president election and Vladimir Putin talked about a sense of hysteria and mania within the United States on this issue.

[13:30:05] But beyond that, he had largely warm words regarding President Trump.