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Face the Nation December 3, 2017 Transcript

JOHN DICKERSON: Today on FACE THE NATION, Senate Republicans cut last-minute deals to get their tax bill passed. It's a giant step towards granting the President's wish for a tax bill by Christmas. But a plea deal for former national security advisor Michael Flynn might make for a not so happy New Year for the Trump administration.

MIKE PENCE: The Tax Cuts and Jobs Act, as amended, is passed.

JOHN DICKERSON: It was a 3:00 A.M. call the President said he was happy to get.

PRESIDENT DONALD TRUMP: I said, "Call me. You can call me." It's the largest tax decrease in the history of our country by far. Not even close.

JOHN DICKERSON: As for the news that Flynn is cooperating in the Russia investigation, is the President worried?

PRESIDENT DONALD TRUMP: No, I'm not. And what has been shown is no collusion. No collusion.

JOHN DICKERSON: We'll talk about the two big stories in Washington this week and more with Senate Majority Leader Mitch McConnell. Two senators investigating Russian influence in the election, South Carolina Republican Lindsey Graham and Maine independent Angus King will also be here. Budget director Mick Mulvaney will set the stage for the next round of tax bill negotiations, and handicap the chances of the government shutting down at the end of the week when it runs out of funding. Plus, new poll numbers on the Alabama Senate race. How is Roy Moore faring after allegations of sexual misconduct with minors?

All that, plus, plenty of political analysis coming up on FACE THE NATION.

Good morning and welcome to FACE THE NATION. I'm John Dickerson. We knew it would be a busy week when Congress and the White House return to Washington Monday, but we had no idea just how busy. More stories of sexual misconduct on the part of the longest serving House Democrat John Conyers and now others prompted more calls for Congress to do a better job of policing its own. North Korea fired another missile, one that in theory could reach Washington.

PRESIDENT DONALD TRUMP: It is a situation that we will handle.

TED CRUZ: Mister President, tonight I ask--

JOHN DICKERSON: Progress on the tax bill continued at a brisk pace after Senate Republicans cut a number of deals to gain its passage, which thrilled the President.

PRESIDENT DONALD TRUMP: People are going to be very, very happy they're going to get tremendous-- tremendous tax cuts and tax relief.

JOHN DICKERSON: That remains to be seen. Unsurprisingly Democrats were not happy. Montana's Jon Tester tweeted a show and tell of the massive bill.

JON TESTER: This is your government at work. Here's the bill as it's written. Here's the modifications that are in it. I can read one word, it's called "add this language." Can you tell me what that word is?

JOHN DICKERSON: Friday arrived with a big development in special counsel Robert Mueller's investigation into possible Trump campaign collusion with the Russians and obstruction of justice as Michael Flynn pleaded guilty to lying to the FBI and said he's cooperating with Mueller. The President further muddied an already complicated story with a Saturday tweet that seemed to suggest he was aware of Flynn lying to the FBI at the time when he was calling the investigation a "witch hunt." "I had to fire General Flynn because he lied to the Vice President and the FBI. He has pled guilty to those lies." The day after the President fired Flynn for lying, former FBI Director James Comey says the President asked him to go easy on his investigation of Flynn. Sources tell CBS News that the tweet was drafted by one of Mister Trump's attorneys.

We want to take a closer look at what the Senate passed, their bill would repeal the Obamacare individual mandate, the corporate tax rate would be cut from thirty-five percent to twenty percent. It will nearly double the standard tax deduction, eliminate state and local tax deductions but would allow an up to ten thousand dollar exception for property taxes. The bill would also double the estate tax exemption limit and raise the alternative minimum tax threshold. An analysis of the bill by the nonpartisan Joint Committee on Taxation indicated that even accounting for economic growth the tax plan would add a trillion dollars to the deficit.

We begin this morning with Senate Majority Leader Mitch McConnell. He joins us from Louisville. Welcome, Mister Majority Leader. I want to start with the balance of this tax cut that passed through the Senate. The corporate tax rate is at twenty percent. It's been sold as a middle class tax cut, but those middle class taxes will expire. Analysis shows that while the majority of the middle class will get a tax cut there are some whose taxes will increase. Why not, in putting this bill together, make-- make it so that you could say everybody in the middle class will get a tax cut that's permanent?

SENATOR MITCH MCCONNELL (Majority Leader/@SenateMajLdr/R-Kentucky): Well, it's impossible to do that. You can't craft any bill that would guarantee no one was in a special category that might get a tax increase. What I can tell you is that every segment of taxpayers, every category of taxpayers on average gets significant relief. The average family of four, twenty-two hundred dollars a year. You mentioned the standard deduction doubling, the child care credit increase. Clearly most people, middle income taxpayers, an overwhelming majority of them will get tax relief. And because of the business tax changes it's much less likely that the job they currently have is going to end up in another country because we are clearly uncompetitive in the global economy with the current tax rates.


SENATOR MITCH MCCONNELL: John, I think this coupled with-- with the regulatory relief, the administration's been providing are the reasons the economy's beginning to pick up. Consumer confidence is up. I don't want to read too much into quarterly growth rates, but we've had two quarterly growth rates in a row of three percent growth. I think this is going to get the country growing again.

JOHN DICKERSON: But on the question of the middle class, there would be a way to craft it so that the number of people who might get a tax increase would be pretty small. And there were Republican efforts to expand the earned income tax credit, to make the child tax credit more robust, to lower the rates for people at the lower end. And those were all Republican efforts that didn't get much energy whereas the energy on the corporate tax rate was always, it's going to be twenty percent, and nobody's tinkering with that. So just in terms of where the emphasis was on the work, there's much more work that could have been done on the middle class and lower income question than was really done in crafting this bill.

SENATOR MITCH MCCONNELL: Well, the question is whether you're getting a tax relief. And of course people on the lower end don't provide a huge percentage of the revenue that we raise through taxation. But what people want is, am I going to get some relief myself answer overwhelmingly likely to, and is my job likely to continue to be in the United States, and are we going to have a growing economy so my children will be able to realize the same goals and aspirations that I want them to have?

JOHN DICKERSON: I think that--

SENATOR MITCH MCCONNELL: And this is designed-- this is designed to get the economy grow-- we didn't have a single year of three percent growth during all of the Obama years. We were clearly underperforming. You have to ask the question why.


SENATOR MITCH MCCONNELL: A combination of overregulation and a lousy tax code.

JOHN DICKERSON: I think the-- the question was about really the winners and losers, but let's move on to the question of process. Because the Democrats of course have made a lot of complaints about process. You said on Friday night, you complain about process when you're losing. And-- and the Senate process might seem like something that's not important to people, but you wrote a book called The Long Game in which you talk a lot about the process. You say in fact it's what's at the heart of the Senate and why it's a different institution. So this looks like a situation when you're in the minority you like the process but when you're in the majority you move on.

SENATOR MITCH MCCONNELL: Not true. We fought-- we followed the regular order. There were multiple hearings. The Democrats were there. Days of hearings. Days of amendments. The Democrats offered amendments in committee ad nauseam. The-- the process on the floor, the reconciliation process, is regular order. That's how they passed Obamacare. It's-- it's-- we didn't do anything that you could call a foul on process.

JOHN DICKERSON: Well, they--

SENATOR MITCH MCCONNELL: Well, they didn't-- didn't-- well, let me just say they didn't-- they didn't like the fact that we repealed the unpopular individual mandate from Obamacare, but yet they didn't offer a single amendment to take it out, and they had the opportunity to do it.

JOHN DICKERSON: Well, they had twenty-five days of debate on Obamacare. And you said the process at the time was arrogant and that they were pushing an unpopular bill through. This bill is unpopular. Why isn't it's the same thing?

SENATOR MITCH MCCONNELL: Well, we'll see how unpopular it is when people start noticing they're paying less in taxes, the economy's growing, there are more jobs and opportunity. Look, we have a very different-- it was pretty clear during this debate we have a very different view of what America ought to look like. Our Democratic friends apparently are quite content with slow growth--


SENATOR MITCH MCCONNELL: --and little opportunity--


SENATOR MITCH MCCONNELL: --to improve your condition. We think we need to jumpstart the economy and provide more jobs and opportunity for the American people. One of us is going to be proven wrong here over a period of time.

JOHN DICKERSON: Let me ask you about Roy Moore. We have a poll out that says Mister Moore is up six points over his Democratic opponent Doug Jones. And in that poll it says that among Mister Moore's supporters fifty-six percent say they were more likely to vote for him after you said he should quit the race. What do you make of that?

SENATOR MITCH MCCONNELL: Well, look, the people of Alabama are going to decide a week from Tuesday who they want to send to the Senate. It's really up to them. It's been a pretty robust campaign with a lot of people weighing in. The President and I of course supported somebody different earlier in the process. But in the end the voters of Alabama will make their choice.

JOHN DICKERSON: And should that be the final word? The White House, when asked about the President's accusers, said, "The voters heard about President's accusers. They voted for him anyway, end of subject." So shouldn't that be the case with Roy Moore?

SENATOR MITCH MCCONNELL: Well, look. I'm concerned about the Senate. And if-- we have two ethics investigations in the Senate going on right now--Senator Franken and Senator Menendez and there might well be another one depending upon people who are in the Senate. And it'll be up to the people of Alabama to make this decision. And we'll swear in whoever's elected and see where we are at that particular point.

JOHN DICKERSON: In the past you've supported Ethics Committee determinations in the case of Senator Vitter that said, basically, behavior before he got to the Senate was not germane in terms of punishing him as a senator. That would seem to cover Roy Moore in which case, what's the Senate Ethics Committee got to look into?

SENATOR MITCH MCCONNELL: Yeah, I don't remember the-- I'm not on the Ethics Committee. I don't remember exactly how the Vitter case was handled. But the Ethics Committee makes those decisions about whether behavior prior to the Senate is relevant or not. They'll decide the-- the parameters, if you will, of their jurisdiction. And then a decision will be made based upon the facts of a particular case. I can imagine there probably will be a case. Whether the outcome is there, I don't know. But, look, the Ethics Committee is three-three. Neither side can take advantage of the other.

It has to be a pretty credible case to go forward. In other words, at least one member of the other party would have to decide that the case was worth pursuing. All of that'll be considered by the committee if they have a member of the Senate--


SENATOR MITCH MCCONNELL: --that they think has a case that ought to come before them.

JOHN DICKERSON: All right. Majority Leader Mitch McConnell, thanks so much for being with us.

Joining us now, South Carolina Senator Lindsey Graham. Congratulations Senator on Clemson's big win.

SENATOR LINDSEY GRAHAM (R-South Carolina/Judiciary Committee/@LindseyGrahamSC): Go Tigers.



JOHN DICKERSON: Let-- let me pick up on something we were just talking about with the Majority Leader, which is on Roy Moore.


JOHN DICKERSON: Majority Leader said, voters of Alabama are going to decide.


JOHN DICKERSON: That seems like there's a new standard basically if it happened before you got into the Senate, the voters will decide. That means-- sounds like he's going to be a senator.

SENATOR LINDSEY GRAHAM: I think the body can regulate itself, you know, at the end of the day when he comes to the Senate if he does. I think an investigation-- an ethics investigation would be a smart thing to do. And we'll see what the Ethics Committee decides as to whether they look at behavior before he came into the Senate, does that matter, if they do, what did they find, we'll see.

JOHN DICKERSON: Could you have him be a senator, by your lights? I mean, would-- would you be able to based on what you've heard, you'd be okay with him being a senator?

SENATOR LINDSEY GRAHAM: We can't stop him from being seated. If there was an investigation and all six members of the committee said they believe he was a child molester that would be a problem.

JOHN DICKERSON: Let me move on to the President's tweet this morning about the FBI, you're on the judiciary committee.


JOHN DICKERSON: You oversee the FBI. President says that-- that after-- in the tweet, he says, after years of Comey, with the phony dishonest Clinton investigations (and more) running the FBI, he's talking about Comey there, its reputation is in Tatters - worst in History. But fear not, he says, we'll bring it back to greatness. FBI worst in history, in tatters. Do you agree?

SENATOR LINDSEY GRAHAM: No. I think Comey needs to answer questions as his time as director. I think he made some decisions that were really very, very wrong. I would just say this President-- there's an ongoing criminal investigation, Comey may be part of it. He tweet and comment regarding ongoing criminal investigations at your own peril. I'd be careful if I were you Mister President. (INDISTINCT).

JOHN DICKERSON: You were a former prosecutor.


JOHN DICKERSON: Along those lines, the President has said he knew that Flynn lied to the FBI and yet he has called the investigation into whether Flynn lied to the FBI, a witch hunt and because it was a witch hunt he fired James Comey. How can you know that you lied to the FBI and then fired the FBI director for investigating that?

SENATOR LINDSEY GRAHAM: I think, number one, what Flynn lied about, is not a crime. I don't think it's wrong for a transition person to talk to foreign government about change in policy. I don't think the Logan Act is worth the paper it's written on. So I'm not really worried about what happened after the election in terms of trying to communicate with the Russians about the-- the Israeli resolution or about sanctions. It comes down to the following to me. Was there any effort by the Trump campaign to coordinate with Russian intelligent services or any entity controlled by the Russians to receive benefit during the election. And they found the one guy that would know that.

JOHN DICKERSON: Let me ask you though on that question of obstruction, because that's the other thing that's a part of this issue, and if you know he lied to the FBI, how can you say an investigation into whether he lied to the FBI, it's a witch hunt that Comey should be fired for carrying out?

SENATOR LINDSEY GRAHAM: Apparently this statement is that-- by the President's lawyer.


SENATOR LINDSEY GRAHAM: He says, I didn't know, I mean, he wasn't in on the interview. He did know that he lied to the vice president. The vice president was very upset, he took action. To me that's not the issue. Here's the issue. In fact--


SENATOR LINDSEY GRAHAM: --from my point of view. If it was coordination between the Trump campaign and the Russians, I can't think of a person who would know more about that than Flynn.

JOHN DICKERSON: Let me ask you on the national security front though, you are very critical of the Russians for interfering in the election?


JOHN DICKERSON: Yeah. And-- and former Obama administration official says the interference was the cyber equivalent or espionage equivalent of 9/11. So if after that kind of an event, given me your foreign policy judgment about an incoming administration that then says to the perpetrators of an event that that's serious. "Hey, let's work out a deal on these sanctions that are going to punish you for that behavior, don't overreact because we'll-- we'll be on your side later when we're in the administration."


JOHN DICKERSON: Give me your national security judgment.

SENATOR LINDSEY GRAHAM: Okay. Well, number one, the Obama administration sure didn't act like it was a 9/11. They were late to the game and did this-- this, the least amount possible. What they did in the interim before Trump took office was a slap on the wrist. I don't buy that whole narrative.


SENATOR LINDSEY GRAHAM: I don't have a problem with the Trump administration reaching out to the Russians. We're going to take a different view about sanctions and we're going to seek your help in the U.N. Security Council.

JOHN DICKERSON: Even given your rough opinion of the Russians on what they did, it's okay to play footsie?

SENATOR LINDSEY GRAHAM: Yeah. Well, here's what I'm saying, that behavior after the election is reaching out to foreign government that we have a different view about things. I'm not here to condemn the President about that. Here's what I'm saying that collusion between a campaign and a foreign government is unacceptable. There is no evidence of collusion, nobody has been charged with it, but you found the one person who would know if it did exist. So it won't be long before we understand one way or the other whether Trump people colluded with Russia because I can't imagine it happening and Flynn not know about it.

JOHN DICKERSON: Let's take a quick break. We'll be right back on the other side of that.


JOHN DICKERSON: We'll be right back.


JOHN DICKERSON: And we're back with Senator Lindsey Graham. Senator, before we get to North Korea, one more question on this investigation. The New York Times reported this week the President had made some calls up to the Hill about these investigations into Russian interference. Was that appropriate for him to make those phone calls?

SENATOR LINDSEY GRAHAM: I don't know what the content was, but he's never asked me to stop an investigation. Yeah, it would be inappropriate for the President to say. "Stop the investigation. It's not inappropriate to have a discussion in general." Again, I just want people to understand, Mike Flynn would know if there was collusion in my view between the Trump campaign and the Russians. There's no evidence of collusion yet, nobody has been charged with collusion. The-- the Manafort lawyers said there was no collusion. But if there was, Flynn would know. And we're going to know pretty soon one way or the other.

JOHN DICKERSON: But on a larger question, you're not saying it's only about collusion because there is this obstruction of justice question--


JOHN DICKERSON: --which is quite important--


JOHN DICKERSON: --and lying to the F.B.I.--

SENATOR LINDSEY GRAHAM: Completely different, but that's not my focus right now.

JOHN DICKERSON: Sure. I understand.


JOHN DICKERSON: But I'm saying in general that's not--

SENATOR LINDSEY GRAHAM: Sure, absolutely, absolutely.

JOHN DICKERSON: --you don't want to want to overlook that.


JOHN DICKERSON: North Korea. Where are we with North Korea right now?

SENATOR LINDSEY GRAHAM: We're getting close to military conflict because North Korea is marching toward marrying up the technology of an ICBM with the nuclear weapon on top that cannot only get to America, but deliver the weapon. We're running out of time. McMaster said that yesterday. I'm going to urge the Pentagon not to send any more dependents to South Korea. South Korea should be unaccompanied tour. It's crazy to send spouses and children to South Korea, given the provocation in North Korea. So, I want them to stop sending dependents. And I think it's now time to start moving American dependents out of the South Korea."

JOHN DICKERSON: How close? You say we're getting close to military confrontation. What's-- what-- what are we talking about here?

SENATOR LINDSEY GRAHAM: The intelligence community can tell you that better than I can. But I had extensive discussion with the administration about this topic. The policy of the Trump administration is to deny North Korea the capability to hit America with a nuclear-tipped missile. Not to contain it. Denial means pre-emptive war as a last resort. That preemption is becoming more likely as their technology matures. Every missile test, every underground test of a nuclear weapon means the marriage is more likely. I think we're really running out of time. The Chinese are trying, but ineffectively. If there's an underground nuclear test then you need to get ready for a very serious response by United States.

JOHN DICKERSON: Should the-- should the Congress be having a big open conversation about pre-emptive war?

SENATOR LINDSEY GRAHAM: Yeah, I think so. I think the President as inherent authority as commander-in-chief has the ability to strike North Korea to protect the American homeland. But this discussion needs to happen among ourselves.

JOHN DICKERSON: Let me ask you about the President's team. There were a lot of back and forth this week about whether Secretary of State Tillerson, going to stay in the job.


JOHN DICKERSON: Do you-- net-net after all the reports and so forth is over, do you have confidence in the President's team around him to manage this tricky question?

SENATOR LINDSEY GRAHAM: He's got the best national security team of anybody I've seen since I've been in Washington. The President, himself, early on, made the right decision. I'm not going to allow North Korea to hit America with a nuclear weapon. We're not going to live under that threat. If I have to go to war, and I don't want to, to stop it, I will. Everybody before President Trump screwed it up, including Republicans. Now we need to get it right. And I think he's got the right approach. He's got the right team. I hope China will help us. We're running out of time.

JOHN DICKERSON: All right. And we have run out of time, senator. Thank you so much--


JOHN DICKERSON: --for being with us.

And we'll be back in a moment.


JOHN DICKERSON: Joining us now is independent Maine Senator Angus King. Welcome, senator. Mitch McConnell, majority leader, says regular order was followed on this tax bill. What's your response?

SENATOR ANGUS KING (I-Maine/Intelligence Committee/@SenAngusKing): If that was regular order, I'd hated to see something else. This is the bill. I brought it. This is the bill that we got at about six o'clock at night that we were going to vote on that night. There were no hearings. There were some general hearings about tax reform. There were zero hearings on the bill. And--and even the bill that was reported out by the finance committee was different than what we were handed that we had to vote on a few hours later. And what worries me about this, I'd-- I commandeered a staffer's desk right off the floor Friday night and read it all the way through. Now, I can't say I understood all of it, but you could do the things that we were talking about, reducing corporate tax rates, doubling the standard deduction in maybe fifty pages. This is four hundred and seventy-seven pages, John. There's a lot of stuff in here that I don't think anybody knows what it's all about. I just happen to pick up. I marked in the margin on page four-oh-nine, "domestic royal and gas extraction income." What's that all about? There is a later provision about income on oil and gas from foreign countries, what's that all about? The point is nobody knew what was going on here and there was a moment when we could have fixed it. Chuck Schumer moved to-- to recess Friday night about nine o' clock until Monday, give people a chance to go through this and dig through it. Party line vote, denied. We end up voting at 3:00 AM.

JOHN DICKERSON: Senator McConnell said Friday night, he said, you know, "When you're complaining about the process. It means that you're losing."

SENATOR ANGUS KING: Well, I think there is-- I mean, there's a point there because I heard him complain about the process a lot when I first arrived, but at-- at some point process matters. I mean, the eighty-six tax bill, thirty-three hearings, ten months, the vote in the Senate, by the way, was ninety to ten. This one barely was dragged across the finish line on a party-line vote.

JOHN DICKERSON: So what happens now?

SENATOR ANGUS KING: Well, I'm-- you know, there's a lot of talk about what the conference will be. I-- I give it fifty-fifty. There will be no conference. I think there is a chance, because I don't think that either side wants to take the-- either the House or the Senate wants to bring this back to the floor.


SENATOR ANGUS KING: The-- the House just may take the Senate bill and send it to the President. So, what happens now is we have now made a thirty-year decision. This is-- this may be the most important vote any of us take in our-- in our career because this isn't the reauthorization of the FAA or even the farm bill. This is something that's going to affect every American, every business, the whole economy for decades. And what happens now is, we're going to see-- well, I give you three predictions. I got three predictions. One is--

JOHN DICKERSON: All right. You have thirty seconds.

SENATOR ANGUS KING: One is you're going to see people put on their long serious face as Orrin Hatch did this morning and say "The deficits really a problem, we can't do snap or social security or Medicare." We got to restructure, that's number one. That's the first prediction. Two, we're going to find some really stinky stuff in here that we didn't know. And three, anything good that happens in America in the next year including good weather at the Super Bowl is going to be attributed to this bill. Those are my predictions.

JOHN DICKERSON: All right. We're going to come back and talk to you, senator, on the other side of the commercial.

We'll be back with Senator Angus King just after this break, stay with us.


JOHN DICKERSON: And we'll be right back with a lot more FACE THE NATION. Stay with us.


JOHN DICKERSON: Welcome back to FACE THE NATION. We're back with independent Maine Senator Angus King. Before I-- I want to ask you about the intelligence committee, but first on the question of spending. Government spending at the end of the year, democratic leaders didn't meet with the President this week. What's your sense of what happens when the government is running out of money?

SENATOR ANGUS KING: Well, they're already talking about another short term--what they call a CR, continuing resolution-- that would get us into January and escape this deadline of this week. I think it's really unfortunate, most-- generally all the work of the Appropriations Committees have been done for a budget. We could pass a budget. We could have passed a budget two months ago. And I-- I don't sense that nobody wants to shut down, I don't sense that that's going to come unless it's through mutual misunderstanding between the two sides.

JOHN DICKERSON: Let me ask you about Michael Flynn. Given what you know as a member of the intelligence committee, how do you read this plea deal that he made?

SENATOR ANGUS KING: Well, I think you can read it in one of two ways. One, you could say he pled to a fairly minor offense and that's the end of it. It's not a big deal. The other you could say he pled to a fairly minor offense, and that means he has lot to deliver to the prosecutors.


SENATOR ANGUS KING: I think one of the most significant developments, though, has been in the last twenty-four hours where the President tweeted yesterday that he fired him because he had lied to the FBI. That's the first time the President has said that. And it was the next day after he was fired that the President allegedly said to Jim Comey, "Go easy on Flynn." If he said to Comey go easy on Flynn knowing that he had lied to the FBI, that ups the ante on that particular part of this whole situation. And I think that may be one of the things Mister Mueller is focusing upon.

JOHN DICKERSON: Does that change the shape of your investigation on intelligence committee? Are you looking into obstruction of justice in the work you're doing?

SENATOR ANGUS KING: No. And I think that's important distinction to make. Mueller is-- is a criminal investigation.


SENATOR ANGUS KING: He is a prosecutor. He is looking for criminal violations. We're looking for the facts. And our focus is on what did the Russians do? Will they do it again? What did they do in the states? And was there collusion between the Trump campaign? My concern about all this, John, is that the-- the-- the latter issue, the-- the hot political issue of Trump and the Russians in the campaign is obscuring the larger issue, which is the Russians attacked our democracy, and they're going to do it again. And that's where the focus of our investigation is and on the collusion issue.

JOHN DICKERSON: Let me quickly get your thoughts. You're on the Senate Armed Services Committee. You just heard Lindsey Graham talked about Americans preparing for pre-emptive action in North Korea. What's your take on that?

SENATOR ANGUS KING: Well, part of diplomacy has to be the threat of military force in the background. And although it-- it makes your negotiations credible. But we've really got to lean on the Chinese. They have to be the solution to this. This is not a case. One of the worst terms ever to enter our lexicon is surgical strike. There's no such thing as a surgical strike. And the idea that we can go in and take out their nuclear capability just isn't so. Most of it's deep underground. So we would be talking about a major war on the Korean Peninsula, plus Seoul is only thirty-five miles from the North Korean border. Anything happens in North Korea, Seoul is history. That's twenty-six million people, including a hundred-- a couple hundred-thousand Americans. So that's-- I wouldn't say it's unthinkable. It's got to be credible. But we can't go there anytime soon.

JOHN DICKERSON: All right. Senator, thank you so much for being with us.

And we'll be right back with White House Budget Director Mick Mulvaney.


JOHN DICKERSON: And we're back with White House Budget Director Mick Mulvaney. Mister Director, this is not in your bailiwick, but I've got to ask you as an administration official. Yesterday, the President said that he knew Michael Flynn lied to the FBI and that's why he fired him. But then consistently he said this investigation is a witch hunt. But if you lie to the FBI, that's not a witch hunt.

MICK MULVANEY (White House Budget Director/@MickMulvaneyOMB): Yeah. John, you're probably asking the exact wrong person about that. It's been kind of a busy week for me. I'm working two jobs. In fact, I'm leaving here to go back over to the CFPB on a Sunday. So I'm probably not the right person to ask about the Flynn investigation.

JOHN DICKERSON: All right. We'll-- we'll-- we'll let that be there. Let me ask you about taxes. The President said that he might be okay with a twenty-two percent corporate rate instead of a twenty percent corporate rate. Is that right? And why the change?

MICK MULVANEY: I-- I don't think it's a change. I think what you heard the President say is, "Look, we're-- we're very close to the finish line." You know he's wanted a fifteen percent rate from the very beginning. That move to a twenty percent rate is part of the discussion. My understanding is that the Senate has a twenty percent rate now. The House has a twenty percent rate now. We're-- we're-- we're happy with both of those numbers. If something small happens in conference that gets us across the finish line, we'll look at it on a case-by-case basis. But I don't think-- I don't think you'll see any significant change in our position on the corporate taxes.

JOHN DICKERSON: One of the goals for this tax cut plan was that it's going to make taxes less complicated. Taxes are not going to be less complicated if this passes.

MICK MULVANEY: They will be-- they will be for ordinary people. For ordinary Americans, they will be. For small businesses, they're still going to be fairly complex. But they always were. You know when you sign up to be a pass-through entity that your life is going to be fairly complicated for taxes. But for ordinary folks it will be.

JOHN DICKERSON: But for conservatives who wanted to shrink the IRS, the IRS is going to have to get bigger to watch all of these new tax regulations. Because if you don't, you're not going to squeeze the revenue out that you need to keep the budget more in balance than it would be.

MICK MULVANEY: Keep in mind, there's not a lot of new regulations. Yeah, you're going to change the way we treat, again, pass-through entities. But a lot of the deductions are gone, A lot of the loopholes. Again, one person's loophole is another person's deduction. Those are gone. So there is still some-- some simplification. So I don't think, no, you're not going to see a dramatic increase in the size of the IRS in order to administer this law.

JOHN DICKERSON: Let me ask you about carried interest. You and I have talked about this. The President said the loophole that exists that allows people to get away with murder, hedge fund managers and so forth. There have been tweaks in that--


JOHN DICKERSON: But not material changes. Why was that something that couldn't get through given what the President said, which is that these people who benefit from that loophole are getting away with murder?

MICK MULVANEY: Yeah, go back to the very beginning. And, you know, I've talked about this before. We laid out some principles at the White House. That principle was ordinary families would pay less, and it would be simpler for them to pay, and the corporate rate would come down. Within those guardrails, we sort of left it up to the House and the Senate. And the House and the Senate apparently I think have both settled on the same plan, which is that if you hold an asset longer than three years, you're going to get that carried interest treatment. The same in both bills. But I think that does discourage some of the abuse, the short-term churning and so forth.

JOHN DICKERSON: But there's not much short-term churning in that carried it. That-- people--


JOHN DICKERSON: --who benefit from the carried interest, I think the average holding on the assets is well over three years. So it's not something that's going to get at what the President made a big deal about both as-- as candidate and as President. The treatment that benefits those people he said was getting away with murder, that's going continue.

MICK MULVANEY: But, again, go back to what we-- what our priorities were. Ordinary families, lower corporate tax rate. We got that.


MICK MULVANEY: What the House and the Senate sort of filled in the details on that was up to them.

JOHN DICKERSON: We've talked about this before, but that priority, sticking with the priorities. But the middle-class families are still-- there's going to be about a quarter that might see their taxes go up. And in the Senate bill, they-- those-- those tax cuts expire. And-- and just in watching this go through, there's been such focus on keeping that corporate rate steady at twenty percent. But there's been that flexibility on really being able to say what you started is being able to say at the beginning of this, which is that everybody in the middle class will get a tax cut.

MICK MULVANEY: Yeah. I'm not sure where the quarter number comes from, so let's talk about--

JOHN DICKERSON: Well, those who--

MICK MULVANEY: --the expiration.

JOHN DICKERSON: --who deduct, who don't take the standard deduction, who itemize, those are the ones who might see their taxes go up.

MICK MULVANEY: Well, but keep in mind also we're doubling the size of the standard deduction. So the number of people who will otherwise itemize will go down dramatically. But, anyway, come to this-- this issue of this expiration. That's, it is. Well, call it what it is. It's gaming the system. The Senate rules are so bizarre and so arcane that you have to sort of horseshoe a bill into that Senate reconciliation process, which is why they're supposedly these-- these rates are going to expire after five years. The Bush tax cuts were the same way, and most of them didn't expire. We said before. We'll say again. If it's good policy, it will be permanent. If it's bad policy, it will be temporary.

JOHN DICKERSON: Gaming the system seems like a dangerous place to be when you're passing legislation.

MICK MULVANEY: Well, they did it-- they did it for health care. They did-- any time you want to get something through the Senate on fifty votes, you have to sort of--

JOHN DICKERSON: I know. But you do want to repeat--

MICK MULVANEY: --forcing into those rules.

JOHN DICKERSON: --the mistakes of the previous-- the other team that you were so unhappy about? Do you want to repeat those mistakes yourself when you're in charge?

MICK MULVANEY: What I'd rather do is change the rules so that ordinary legislation can be considered on an ordinary basis and you're not sitting there forcing policy into procedure. You shouldn't let procedure dictate what your policy is, which is exactly what you have to do because of these rules.

JOHN DICKERSON: Yeah. Well, but people would say those procedures helped keep the deficit problem going down. But let me ask you about the shutdown which might be coming. Government's running out of money. Democrats wouldn't meet with the President. What's the status of things?

MICK MULVANEY: Oh, you know, it's-- it's funny to see now that the Republicans are in charge. I-- I think there's a group of right-wingers in the House who say they want to shut the government down. There's a group of Democrats who want to shut-- shut the government down over DACA. And there's a group of lawmakers from some of the hurricane states who want to shut-- shut the government down until they get what they want. This just sheds light on the fact that the appropriations, the spending system is broken when any little group can sort of hold the government hostage. We need to get beyond that. I think that we will, I don't think you'll see a government shutdown.

JOHN DICKERSON: People used to say that about you. You were in one of those little groups when you wanted to-- to shut the government down for reasons. You've changed your stripes.

MICK MULVANEY: Well, all the more reason the system should be fixed. We don't spend money properly in Washington, DC. We-- we jump these massive bills to massive bills. The government shut down I think, John, seventeen times in twenty years between '80 and '94 or something like that. So it used to happen.

JOHN DICKERSON: But-- but some people would say, "Well, then go back to the tax bill where people basically gave up their fiscal conservatism in order to get a tax bill." That-- that this is always what happens.

MICK MULVANEY: No. No. I mean--

JOHN DICKERSON: You want to fix the system, but--


JOHN DICKERSON: --the instincts are to basically--

MICK MULVANEY: But-- but my reputation is as a fiscal hawk. At least I hope that it is. And that's why I'm so interested in seeing that tax bill passed because these deficits are a function of two things, the amount of money in and the amount of money out. Spending is one of those. Tax revenues is the other. We have to get the tax revenues up. That means we have to get back to a healthy American economy, grow the economy so that you make more money, I make more money, ordinary Americans make more money, and so does the government. That helps lessen the deficit.

JOHN DICKERSON: Obviously, there's a big debate among other deficit hawks about whether this bill meets that criteria.

MICK MULVANEY: I've had long conversations with Mister Corker. Yes, sir.

JOHN DICKERSON: The-- well, more than him. But anyway, a good shutdown. The President once talked about, "It would maybe be good to have a shutdown." Is that still his view?

MICK MULVANEY: Well that goes back, I remember when he said that in April. And that goes back to the system being broken. Congress doesn't spend money the way it's supposed to. It's supposed to pass, and I know this is getting deep down in the weeds, thirteen different-- twelve different appropriations bills. They don't pass any. And we have these massive bills at the end of the year. And either they pass those all at one time or it fails all at one time. And that's-- that's sort of managing by crisis to crisis. And it's not a good way to run the country.

JOHN DICKERSON: Our crisis is we're out of time. Mister Director, thanks so much for being with us.

MICK MULVANEY: It's always a pleasure.

JOHN DICKERSON: And we'll be back in a moment with our panel.


JOHN DICKERSON: For some analysis on this very busy week, we turn to our political panel. Julie Pace is the Washington bureau chief for the Associated Press. Ramesh-- Ramesh Ponnuru is the senior editor at the National Review. We're also joined by Ron Brownstein, the senior editor of The Atlantic and a CNN senior political analyst, and Ezra Klein is the founder and editor-at-large of Ramesh, let me start with you. The tax cut, this is-- looks like it's going to pass. It's in signed by the President, so big win for the President, what's your take on it?

RAMESH PONNURU (Bloomberg View/National Review/American Enterprise Institute/@RameshPonnuru): It's not just a big win for the President, it's his only major legislative win so far. And I think that is the thing that led to its happening because Republicans were just desperate to get something across the finish line and be able to tell people that they've accomplished something while in office. So I think it is a big accomplishment. It does achieve several longstanding Republican goals, particularly bringing down that corporate tax rate, which is what this entire bill is designed around.

JOHN DICKERSON: Ron, how does this shake out in terms of the effects of this bill do you think?

RON BROWNSTEIN (The Atlantic/@RonBrownstein): You know, normally passing a tax cut is like playing tennis without a net in terms of the public reaction. People like the idea. This tax cut is facing two to one opposition in polling. Sixty percent of Americans in Quinnipiac said it would benefit the rich at the expense of the middle class which is pretty tough language. And there are reasons for that. I mean, it will increase the deficit by at least a trillion in the most optimistic estimates after growth. It puts most of its benefits, sixty-two percent by some estimates into the top one percent. And all of the studies have shown it will have relatively limited impact on accelerating growth. But that I don't think is the reason why it is at risk. It's at risk because it departs from earlier tax bills in raising taxes on certain targets. People who live in big cities, people who live in-- who live in blue states, it cuts taxes for alternative energy while preserving them for oil and gas. In many ways it is as much an enemy's list as a tax bill. I mean, it is a clear expression of this is-- these are the people on our side, these are people on the other side and that I think exposes us to much more political risk than you usually see in a tax bill.

JOHN DICKERSON: Ezra, picking up on Ron's point, I was struck on Leader McConnell said, well, we'll see how popular it gets once it passes. Chuck Schumer in 2010 after the Affordable Care Act passes-- passed said when people learn what's actually in the bill as this goes along it's going to become more and more popular. So they've really just switch teams.

EZRA KLEIN ( Well, there are two actually interesting things about that because two things happen here. One is that recently Obamacare has gone a lot more popular.


EZRA KLEIN: It's become a majority popular bill for first time since it-- its passage, since Trump got elected. But the other thing this tax bill does is on the way to passage, it casually destabilizes the entire individual insurance market in America. So the Republicans had skinny repeal at the end of the Obamacare appeal effort. The main provision of skinny repeal was that they're going to repeal the individual mandate, not really replace it with anything. They knew that was a bad idea. And so the idea was it could only pass if Republicans promise it wouldn't make it law, they would change it to conference. But right now they've passed the tax bill that on the way to passage, it gets rid of the individual mandate according to the Congressional Budget Office. Thirteen million people will lose health insurance, insurance premiums will go up by ten percent, individual markets will be much more destabilized and they don't have any answer for this. So in addition to a tax bill that is incredibly progressive, has all the features Ron just mentioned, it's also going to upend American health insurance markets, and they've not really thought hard about this or what to do about it or how to handle it at all. It's something they need to get a little bit of revenue and didn't really think through on the way to passage.

JOHN DICKERSON: What's your take, Julie, on this?

JULIE PACE (The Associated Press/@jpaceDC): Well, politically big win for the President and Republicans if they can get through to conference process and they have every political incentive to try to move through that process pretty quickly. I think one of the big things that we have to look at over the next year or two as the President heads toward 2020 is what is the impacted of this legislation on his voters. He has made sweeping promises to his voters, working class voters that they are going to get big tax cuts. They're going to-- there's going to be lot of tape for Democrats to go back to. If you look at a lot of the analysis that's come through, yes, many middle class Americans will get some kind of tax cut, some may not, and-- and for some it may be fairly minimal. So, he's putting lot of his own political capital into a piece of legislation that may not bring the kind of success for his voters that he is promising right now.

RON BROWNSTEIN: One intriguing marker in this. If you go back and you look, twenty-five Democratic senators voted for the Reagan tax cuts in 1981. Twelve Democratic senators--


RON BROWNSTEIN: '81. The original. The original '81. '86 everybody voted for it.


RON BROWNSTEIN: Both parties. There's ninety, you know, ninety-- ninety plus votes. Twenty-five Democratic senators in '81. In 2001, twelve Democratic senators voted for the Bush tax cuts. When this started there was a lot of expectation that because there are ten Democrats running in 2018 in states-- senators in states that President Trump carried that he would have a lot of leverage--


RON BROWNSTEIN: --to get them to vote for it. This bill is so tilted toward Republican constituencies, relatively narrowly at the top that no Democrat felt compelled, even in states that Trump won by double digits to vote for-- in stark contrast to '01. And I understand politics has changed since the '80s and even since '01. But this is not something that they were afraid of opposing. Both because of the politics and because of the substance.

RAMESH PONNURU: And because Trump is less popular than most presidents are.

JOHN DICKERSON: You can respond to that, but first--

JULIE PACE: But it seems like North Dakota, West Virginia, we're talking about here.


JOHN DICKERSON: But, Ramesh, you-- you wrote this week about an effort by Senator Rubio and Senator Lee to try to build up that-- the families at the lower end of this. Why was there resistance to what they were trying to do? There's also other things-- Paul Ryan has been the fan of increasing the ITC for childless.


JOHN DICKERSON: There are-- you could lower the rates at the bottom. Why were those which would've been direct, you know, injections into the middle class and lower class, why where were those start to get through?

RAMESH PONNURU: Right. So they weren't the priority for Republicans. Senator Mike Lee and Marco Rubio tried to make payroll tax relief possible for families by extending the child credit to them and pay for that by just increasing the corporate rate less than one percent. Republicans were just dead set against it. Thirty-two of them saying that we had to keep this twenty percent rate that that's somehow written in stone. And the Democrats by and large decided they did not want to participate in this bill. They could have carried that across the finish line if they had wanted to.

JOHN DICKERSON: Ezra, let me go back on the health care question. Susan Collins as a-- as a trade for her vote said that Mitch McConnell promised her that Alexander Murray, the bill being used to kind of try to stabilize the Affordable Care Act, of course, before the individual mandate was being taken away. Give me your sense on-- on that.


JOHN DICKERSON: And-- and McConnell is committed to that to bringing that up.

EZRA KLEIN: Alexander Murray was build-- was designed to deal with some problems that are in Obamacare now, and also the Trump administration's continuing sabotage of Obamacare, particularly, the expectation they're going to stop paying the cost sharing reductions. You cannot pass Alexander Murray after blowing a giant new hole in it. Alexander Murray doesn't fix that. It's not build to fix that. It's not powerful enough to fix that. So I mean, you can even-- these are percentages pulled out of nowhere, but can imagine that Alexander Murray stabilizes the individual market by fifteen percent, the individual market destabilizes him by forty percent.


EZRA KLEIN: You have net worth individual market. This was not a-- a trade that ever made any sense. It's a fig leaf. It's a way of saying that you're doing something without having any idea of what you're actually doing.

RON BROWNSTEIN: John, can I go back to Julie's point for a minute?


RON BROWNSTEIN: Real quick about-- about the economic impact of the tax bill. I mean, essentially you have a Republican coalition now that depends largely on the votes of blue collar, lower middle income whites and who Trump is speaking to very powerfully on a cultural basis.

JULIE PACE: Absolutely.

RON BROWNSTEIN: But you have-- you have a tax bill that tilts even more towards the top one percent and the Bush tax cuts that gave about a quarter of its benefits, this is about three fifths. And the question is, you know, can they hold those blue collar voters. One way they're doing it is by ramping up even relative to Bush or Reagan, the cultural antagonism, even the kind of overt kind of racial element in-- in the message. The problem they're getting is that's pushing away more people at the top. And if you have to predict for 2018 what's a bigger risk, blue collar people thinking they violated their interests or white collar people thinking they're violating their values. I'm betting on the latter. That's what we saw in Virginia. That's what we're seeing in Alabama. And the blue collar side is holding so far for the Republicans.

RAMESH PONNURU: But the tax bill does reduce taxes on average including for blue collar people. The question is, are they going to be upset that other people get a bigger tax cut than they do. And my guess is--

(Cross talk)

EZRA KLEIN: Until that expires, right? Until those parts of the bill expires.

RON BROWNSTEIN: The people who are coiling from Trump on cultural grounds would also-- will also face higher taxes in blue states. And there are still a lot of Republicans in Southern California, New York, New Jersey, Northern Virginia, suburbs in Minneapolis and Chicago who will be at risk in this bill from voters who are really pulling away from them on the cultural and racial grounds.

JOHN DICKERSON: All right. Let's switch here to-- Julie, let's switch to Michael Flynn. What do we make of this? I mean, obviously it's a big deal. What's your take on it?

JULIE PACE: It's a huge deal. And the White House is leaning hard on this idea that in the actual court documents that came out at the end of the week, there is no evidence of collusion between the Trump campaign and Russia. That is true, based on what is in the court documents. But I think Senator Graham made a good point if that is Mueller's aim to see if that collusion existed, he now has the witness that he-- a cooperating witness that he needs, Michael Flynn was by Trump's side throughout the campaign. He was flying on-- on Trump's plane with him, he was with him behind the scenes, he was a major player in terms of their-- their formation of policy such as-- as it was. And I think the other thing that is significant about the-- the court documents is that it undermines the entire White House argument about why Flynn was fired. They said Flynn was fired essentially because he was freelancing in his conversations with the Russian ambassador, he lied to Mike Pence about it, and he did this on his own. Those court documents say that he was actually in direct conversations with Jared Kushner and with KT McFarland, who was part of a larger group talking about conversations they were going to have with the Russians. We haven't had-- heard a good explanation from the White House about that right now. But it's very clear that Flynn was not the only person during the transition who was aware that they were going to be talking policy with--


JULIE PACE: --Russian officials.

JOHN DICKERSON: Transition policy. Go ahead.

EZRA KLEIN: The big one-- just big point about this. If you just step back from Flynn, from Manafort, from everything we're hearing from the-- the meetings that Sessions forgot, all the times Kushner lied on the security clearances. There's lot being forgotten about, lied about, misrepresented, for all to be innocent. I mean, there's something-- we don't know the whole story yet, Mueller is running what appears to be a very expansive and very aggressive investigation, but it is getting to be-- what we are being asked to believe as innocent is getting to be almost ridiculous. You go back to the Don Trump Jr. e-mails with the Russian lawyer saying, I would love to get some dirt on-- on Hillary Clinton. There's an overall picture coming together here and for a group that says they have nothing to hide, there sure is lot, they appeared to be trying extremely hard-- at great legal risk--


EZRA KLEIN: --to hide.


RAMESH PONNURU: So, you know, we all want to know what this means for the future of the Mueller investigation. So obviously because this is a plea agreement that means that Mueller thought that he can charge Flynn with more than that, and that he wants Flynn's cooperation. So, of course, we all want to know what the future holds here. But one thing that we can easily skip over is, this just shows terrible judgment on the part of somebody who was the National Security Advisor, and therefore also shows terrible judgment on the part of the person who hired him. The administration is sending out these press releases where they say, this was an Obama guy, Flynn. And, of course, Flynn did work in the Obama administration, but the Obama administration warned the Trump people not to hire him. They went ahead anyway and it really just shows again abysmal judgment from a President who always said he was going to surround himself with the best people.

JOHN DICKERSON: Twenty-five seconds.

RON BROWNSTEIN: One thing you know about the special counsel is he does not give out hall passes easily. There was a lot he could've charged Michael Flynn with that he did not charge him with. And the assumption has to be-- there's a reason why they made that call. The only thing we know about the special counsel, there's a lot we know, there's a lot we don't know. They have-- they know a lot more than we do. They may know a lot more than the people they're interviewing do. And I think that limits our ability to truly understand where this is going except every indication is that this is a very serious, aggressive and comprehensive investigation.

JOHN DICKERSON: All right. We're going to have to end it there. Thanks to all of you. And we'll be right back in a moment.


JOHN DICKERSON: That's it for us today. Thanks for watching. Be sure to tune in to the CBS EVENING NEWS tomorrow night as we begin a new era with Jeff Glor. He's taking over as anchor of the broadcast. Until next week for FACE THE NATION, I'm John Dickerson.

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