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MARGARET BRENNAN: It's Sunday, July twenty-ninth. I'm Margaret Brennan and this is FACE THE NATION.
President Trump dug in this week to try and fix some problems caused by his trade policies. First up, twelve billion dollars in assistance to farmers to ease the pain of his tariffs. Then the President made up with the head of the European Union Commission, a group of allies he called his foe just two weeks ago promising to work together for a future trade deal.
PRESIDENT DONALD TRUMP: We also will resolve the steel and aluminum tariff issues and we will resolve retaliatory tariffs. This was a very big day for free and fair trade.
MARGARET BRENNAN: And just in case there was any doubt he tweeted a photo of EU Commission head, Jean-Claude Juncker, kissing him on the cheek saying the EU and U.S. love each other. But the President's biggest triumph on the economic front came Friday, and no surprise he took a victory lap.
PRESIDENT DONALD TRUMP: And I am thrilled to announce that in the second quarter of this year the United States economy grew at the amazing rate of 4.1 percent. We've turned it all around. Once again we are the economic envy of the entire world.
MARGARET BRENNAN: We'll talk to the President's top economic adviser Larry Kudlow about whether that growth is real and sustainable. Plus, the President's attorney Rudy Giuliani weighs in on the new allegations against Mister Trump from his long-time fixer, Michael Cohen. We'll also hear from a Republican who's not happy with the impact of those tariffs on his home state, Wisconsin's Ron Johnson, and New Hampshire Democrat Jeanne Shaheen. We have new polling from our Battleground Tracker about America's views on President Trump's trade policies and its impact on the midterm elections.
Plus, analysis on all the news just ahead on FACE THE NATION.
Good morning and welcome to FACE THE NATION. We begin today with President Trump's attorney Rudy Giuliani who is in our New York broadcast studio this morning. Mister Mayor, thank you for joining us. The President told--
RUDY GIULIANI (Attorney for President Trump/@RudyGiuliani): Thank you, Margaret.
MARGARET BRENNAN: --CBS News earlier this month he still wants to speak to special counsel Robert Mueller. So when? Where? What format?
RUDY GIULIANI: Well, you know, we have kind of been distracted on all kinds of things starting with Peter Strzok and the Horowitz report. And now Michael Cohen really surprising all of us and taping--
MARGARET BRENNAN: Is that what's holding up your negotiations?
RUDY GIULIANI: Well, it keeps us away from it and-- and-- and also the-- the-- the special counsel is kind of tied up. Although quietly when the Manafort-- getting ready for the Manafort trial. So we have negotiations going on with them. We have an outstanding offer to them. They haven't responded in about a week to ten days. I-- I don't hold that against them. I think they got a lot going on like we do.
MARGARET BRENNAN: What does that offer look like?
RUDY GIULIANI: Well, I can't tell you-- I can't tell you what the offer looks like except there is a, sort of area of questioning and a group of restrictions on it that-- that, you know, we could live with, I think. I'd have to reanalyze that in light of the new facts but I-- I don't think that's going to change it very much. Let's remember--
MARGARET BRENNAN: This is narrow to the Russia probe? And not obstruction of justice? Or how narrow?
RUDY GIULIANI: It relates basically to the-- to the-- to the Russia collusion thing, which we think there's no evidence in President doing anything wrong so we don't really have much of a problem with it but the obstruction thing it's more a question of we don't see the legal basis for a President obstructing by merely taking an action in firing somebody that he had every right to fire and about ten good reasons to fire. So we don't just acknowledge though the basis for that. But, you know, we-- we might consider a few questions in that area also. But, at this point, it's best left to us and them to do that quietly. There's enough going on with the Southern District thing to keep people busy.
MARGARET BRENNAN: When are we going to find out? When are you going to nail this down?
RUDY GIULIANI: I think a couple. I mean maybe this week. Maybe next week. It's--
MARGARET BRENNAN: Last time you told us it was July Fourth, Mister Mayor.
RUDY GIULIANI: Well, a lot happened since July Fourth.
MARGARET BRENNAN: It's true.
RUDY GIULIANI: Peter-- Peter Strzok. Our-- our friend Cohen going rogue. I mean, lots-- lots of things.
MARGARET BRENNAN: The New York Times is reporting that special counsel Robert Mueller is looking into whether the President's treats-- tweets, I should say, added up to any kind of obstruction of justice here. Have you advised the President not to tweet, at least not to tweet about his attorney general?
RUDY GIULIANI: Good luck about tweeting. First of all, you know. Obstruction by tweet is not something that I think works real well. Generally, obstruction is secret. It's clandestine. It's corrupt. You don't want the evidence out in the public. So it can be used against you and I've looked at all those tweets and they don't amount to anything but the man complaining about an unfair investigation which even if it wasn't the president, he has a First Amendment right to do that. I don't think there's anything there that gets-- gets them beyond the First Amendment. And-- and second a lot of his tweets have been very helpful. The reason he may not have to testify is he's laid out his defense. Clearly, like this whole Russian thing he's made it clear he didn't know about the meeting beforehand--
MARGARET BRENNAN: You're talking about the Trump Tower meeting that Michael Cohen--
RUDY GIULIANI: Yeah.
MARGARET BRENNAN: --apparently, now says--
RUDY GIULIANI: He has made it clear. And now-- and now--
MARGARET BRENNAN: --the President did know in advance about.
RUDY GIULIANI: Yeah, well, I mean. I don't see how you can believe Michael Cohen. Michael Cohen is also the guy that taped him without telling him. Taped Chris Cuomo. Taking his cell phone and putting it in a drawer and saying I'm not recording it and then did a two-hour recording that we now have. He did that at least four other times. To my surprise he turns out to be almost an instinctual liar. So there's no way this guy's credibility is going to withstand four or five witnesses saying the exact opposite.
MARGARET BRENNAN: You called him an honest, honorable lawyer just a few weeks ago. What changed?
RUDY GIULIANI: How did I know? Why would I have not thought he was? I mean-- never had a bad dealing with Michael. I was being-- I was being straight and honest. I didn't know that he taped conversations surreptitiously. I didn't know he would grossly violate the attorney-client privilege. I didn't know he would mislead dozens of reporters and tape them all over the place, and pretend to them directly, I'm not recording you.
MARGARET BRENNAN: How much of the evidence that the--
RUDY GIULIANI: And I-- I didn't know that.
MARGARET BRENNAN: --how much of the evidence that the FBI seized from Michael Cohen's, you know, place of-- of work and-- and residence relates to the President, beyond tapes?
RUDY GIULIANI: Well, let me see if I can-- I can make it about as clear as possible. We know of something like a hundred eighty-three unique conversations on tape. One of those is with the President of the United States. That's the three-minute one involving-- involving the McDougal payment--AMI-McDougal payment. There are twelve others, maybe eleven or twelve others out of the hundred and eighty-three in which the President is discussed at any length by Cohen, mostly, with reporters. All clearly corroborating what the President has said in detail on many of those tweets. In other words, that he didn't know about the payments to either one when it happened; that he only found out later; that Cohen made them not for the campaign-- he didn't-- he didn't like the campaign, he says very derogatory things about the campaign. He said I only made it because I, personally, love the President and Melania. And that's why I made the payments, which takes it right out of the campaign contribution arsenal. So these-- these are tapes I want you to read. I want you to hear them. I didn't think I'd be able to get them out publicly. And somehow, he and his lawyer have this crazy idea of just throw it all out there. I think they also don't realize it's going to hurt them with the prosecutors. When I was a prosecutor I don't want some guy giving out all the evidence to the press.
MARGARET BRENNAN: But you do want these tapes released now.
RUDY GIULIANI: I can't do it. I mean I'm not allowed to do it. We've not leaked a single tape. I think if you check with the reporters who did the stories they'd tell you that. The Times came forward and made that clear. We don't violate these rules. However, we are allowed to refer to them if they put them out. Why they're putting them out? Someday, somebody is going to have to figure it out. But--
MARGARET BRENNAN: You mentioned--
RUDY GIULIANI: --they're doing it.
MARGARET BRENNAN: You mentioned Karen McDougal this recording that was made public earlier this week relates to her she claims she did have a consensual affair with the President. But I want to ask you beyond this case--beyond Stormy Daniels were other payments made to as yet unnamed women around the time of the 2016 campaign?
RUDY GIULIANI: There is-- there is a conversation about that. On one of the tapes in which I think Chris Cuomo asked him that and Cohen says no. Denies it. Said that there were no other situations like this.
MARGARET BRENNAN: Was that an accurate statement by Cohen?
RUDY GIULIANI: As far as I know yeah. I have no evidence to disprove that. And-- and we've searched the records. I mean-- remember both these payments were made or at least the McDougal payment was going to made through a corporation. Well, you're hardly going to make an illegal contribution through a corporation and that whole dispute about check or cash really couldn't have been done any other way. But-- but by check. It's a corporation, after all, making the payment.
MARGARET BRENNAN: But you maintain that payment didn't actually occur.
RUDY GIULIANI: That one didn't happen for-- for reasons I guess that AMI wanted to keep it, they probably saw a value in keeping it. I mean I know a lot of people raised questions about it but it's pretty clear from the tape this is a straight out and out legal and business transaction.
MARGARET BRENNAN: The CFO for the Trump Organization, Allen Weisselberg, was subpoenaed this week to testify in the criminal probe around Michael Cohen. Does any of this cross that red line that the President has said in terms of touching his own personal finances?
RUDY GIULIANI: No, I think these are about-- I think these are about the things we're talking about to see are they corroborated and they are or they could be about other things that they may have some knowledge of that Cohen was doing independent of the President. I should finish that discussion of the tapes by telling you that, yes, there are a hundred and eighty-three, President's on one, mentioned on twelve others. There are then an untold number of other tapes that do have no relation to us, meaning President Trump. That has to do I guess what the Southern District originally raided him for. Those tapes I don't know what's on those nor now if they related it to us the government would have to give it to us.
MARGARET BRENNAN: Right.
RUDY GIULIANI: The government has been totally ethical about this. So I don't believe there's any question, but there's a lot there for them to investigate. And you know when you just look at a box you can't tell what it contains--
MARGARET BRENNAN: Right.
RUDY GIULIANI: --but I sure wouldn't want to-- to have that box there in the FBI has possession of it with me.
MARGARET BRENNAN: All right, Mister Mayor. There's always another part to this story. We'll continue to track it here.
RUDY GIULIANI: Oh, yeah. Keeps change-- every time I talk to you it changes.
MARGARET BRENNAN: Well, we look forward to having you on again.
RUDY GIULIANI: Thank you.
MARGARET BRENNAN: I'm going to speak now to a friend of yours, Larry Kudlow, the director of the President's National Economic Council. Larry, welcome back, so good to see you.
LARRY KUDLOW (National Economic Council Director/@larry_kudlow): Thank you.
MARGARET BRENNAN: We did have a good economic growth number that Q2 number 4.1 percent. It's hard to argue it was anything but a Goodwin for the President. But when you take it apart was this sort of just a temporary burst of buying ahead of the implementation of the President's tariffs?
LARRY KUDLOW: No, I don't think so at all. I mean the-- the basics of this number were consumer spending and business investment. Those are the basics of any number. C+I to put it in economic terms. It's doing terrific. It's rising by better than four percent as was the overall. And I know some people have tried to downgrade this by saying about the tariffs, by ahead of tariffs. By the way, we don't know that, there's lot of theories about that. I'm glad to see exports rising whatever the reason. The biggest thing that nobody has talked about in terms of these smaller issues is inventories. Inventories fell by I think twenty-five billion dollars. That's a very unusual.
MARGARET BRENNAN: Mm-Hm.
LARRY KUDLOW: It took at least a percentage point off of GDP. But let-- let's-- these things jump around a lot. The heart of this report, as I said, consumer spending, business investment, are on a tear. Business investment is on a tear which was really what our tax cuts were designed to do.
MARGARET BRENNAN: Right. And your deregulation.
LARRY KUDLOW: And the deregulation--thank you--and the energy. And by the way, the President's attitude, the war against business is over. The war against success is over. The war against energy is over.
MARGARET BRENNAN: But then he's got a trade war, Larry. He's got trade disputes even with some of our allies and that's the thing that makes people worry that everything you just laid out is going to go up in smoke.
LARRY KUDLOW: Up in the smoke.
MARGARET BRENNAN: Can you promise that NAFTA will be done ahead of the November races that you will get that agreement in principle to actually be a hard agreement with the Europeans.
LARRY KUDLOW: Actually, on Mexico, just to pin point that we're making very good progress and something good may be announced in the not too distant future.
MARGARET BRENNAN: By September?
LARRY KUDLOW: The biggest one was the European Union. I was waiting for you to-- to get to the EU, where I had a role, and POTUS was unbelievable, and President Juncker was unbelievable.
MARGARET BRENNAN: You helped to cool off the tensions this week.
LARRY KUDLOW: More than that. I mean, yes, I think that's true. But also the EU, President Juncker, I mean comes right out of the gate saying we will buy a ton of your soybeans which will help ameliorate the China problem.
MARGARET BRENNAN: But you know the EU can't buy that. European Nations of private businesses would have to.
LARRY KUDLOW: Indeed.
MARGARET BRENNAN: Right.
LARRY KUDLOW: And I think they will. And I think there's a lot of momentum to that.
MARGARET BRENNAN: So this wasn't an actual transaction. This is a promise to do something in the future.
LARRY KUDLOW: We will have an actual transaction.
MARGARET BRENNAN: On what?
LARRY KUDLOW: Guaranteed. Starting out right away with soybeans, beef and liquid natural gas, LNG, which is a huge topic.
MARGARET BRENNAN: But the European Commission says that agriculturals-- agricultural products are absolutely not up for negotiations. You're saying they are?
LARRY KUDLOW: They will be part of the negotiations. But-- but I don't want to get in the way of their domestic issues, okay. We are going to be very accommodative. They will be very accommodative. Again, if egg is not part it than what are soybeans doing--
MARGARET BRENNAN: Right.
LARRY KUDLOW: --what's beef doing. In the final document that was signed by both, we talked about opening markets for farmers and for workers. So, no, I don't buy that.
MARGARET BRENNAN: What's the timetable on this?
LARRY KUDLOW: Immediately. Immediately. We're starting immediately.
MARGARET BRENNAN: You're going to-- are you going to be negotiating them or they say a trade representative?
LARRY KUDLOW: We started immediately. I'll be involved. Bob Lighthizer is the key guy, absolutely. We will be starting immediately. We'll be setting up a layered process to examine all the different areas. Remember--
MARGARET BRENNAN: Can you get this by September? Because we still have the Commerce Department saying they're reviewing whether to put these auto tariffs on or not?
LARRY KUDLOW: That's fair enough. And they are reviewing it.
MARGARET BRENNAN: That's a knife hanging over your neck.
LARRY KUDLOW: Well, I don't know if it's a knife. We'll see how that study comes out. The President asked for it and Commerce Department will give it.
MARGARET BRENNAN: You don't think we'll-- we'll see that twenty percent tariff on autos?
LARRY KUDLOW: I don't want to get ahead of anything in this game, Margaret, as you well know. All I am going to say is the EU story is moving ahead very rapidly, very rapidly. And I think that, by the way, puts China in a very difficult position. China is I think being isolated. I don't know if they realize it or not. I assume they do. Not only is the EU and the U.S. coming back together. As I said before I am looking forward to a deal on Mexico and I think a deal with Canada is-- is out there--
MARGARET BRENNAN: But-- but, as you say, this is--
LARRY KUDLOW: So, China-- China--
MARGARET BRENNAN: --really about China.
LARRY KUDLOW: --all of a sudden--
MARGARET BRENNAN: But if China is not coming to the table then what are these--
LARRY KUDLOW: Well--
MARGARET BRENNAN: --tariffs accomplishing?
LARRY KUDLOW: Tariffs have moved a lot of people to the table, including the European Union.
MARGARET BRENNAN: Beijing?
LARRY KUDLOW: Including Mexico. Well, we'll see about that. You know, as I said before, a key point here is that all of a sudden the Chinese are being isolated. China, by the way, asked the EU to do a trade deal. The EU said no. The EU said to us we would much rather have a deal with you the United States.
MARGARET BRENNAN: Mm-Hm.
LARRY KUDLOW: And that's why President Trump and President Juncker's meeting was so important and the process is beginning immediately. So, this is very good news in my judgment.
MARGARET BRENNAN: So, you are a Reagan-era conservative.
LARRY KUDLOW: I am.
MARGARET BRENNAN: Doesn't it send shivers up your spine when you start talking about giving aid bailout to farmers? When you start talking about deficits now growing more towards one trillion in 2019? When you start talking about trade wars here. Isn't there a less destructive way to get to the growth you want to see?
LARRY KUDLOW: Well, look, first of all, lowering tax rates and rolling back regulations and opening up energy is a great way for growth and that's what we're seeing. And President's program-- you know, we've only been doing this I guess five Trump quarters. We're almost at three percent--3.1 in the first half and 4.1 in the second quarter. It's working. It's all working. People said we couldn't do it.
MARGARET BRENNAN: So, you're telling farmers the pain is worth it?
LARRY KUDLOW: So, that's one point. No, I-- I'm not telling anybody. I'm not for pain I'm for prosperity as always. But here President Trump has said he wants to end tariffs. He wants to end non-tariff barriers. He wants to end subsidies and he is a free trader. But sometimes you have to target tough tariffs to do so, okay? And that's what he is doing and I think it's beginning to show some success. Only been six months since he's been on this track.
MARGARET BRENNAN: Yep.
LARRY KUDLOW: So, no. And regarding the deficit, let me say this: The increase in growth--
MARGARET BRENNAN: We do have to wrap it up.
LARRY KUDLOW: --is going to be a big factor in lowering the deficit.
MARGARET BRENNAN: Mm-Hm.
LARRY KUDLOW: Even the CBO numbers and they've never agreed with us on taxes and dynamics--
MARGARET BRENNAN: Yeah. But you're--
LARRY KUDLOW: We have all--
MARGARET BRENNAN: Mick Mulvaney put out a number this week that I was referring to on the one trillion.
LARRY KUDLOW: Yes, but look behind that number in the short run do we lose the revenues to invest in our economy. Absolutely.
MARGARET BRENNAN: Larry.
LARRY KUDLOW: Even the CBO numbers-- even the CBO numbers show now that the entire one-and-a-half-trillion-dollar tax cut is virtually paid for by higher revenues and better nominal GDP.
MARGARET BRENNAN: Larry, we got to leave.
LARRY KUDLOW: These are all good things, Margaret.
MARGARET BRENNAN: We have to leave it there because I am out of time. We'll be back in one minute with a lot more FACE THE NATION. So don't go away.
MARGARET BRENNAN: We're back with Democratic Senator Jeanne Shaheen. She sits on the Armed Services and Foreign Relations Committee. She's in Portsmouth, New Hampshire, this morning. Senator, welcome to FACE THE NATION. You just heard the President's economic adviser--
SENATOR JEANNE SHAHEEN (D-New Hampshire/@SenatorShaheen): Good morning.
MARGARET BRENNAN: --lay out a-- a very rosy picture about the economy--these trade disputes. How are they affecting people in New Hampshire?
SENATOR JEANNE SHAHEEN: Well, we have a hundred and forty thousand jobs that are at risk if these tariffs continue. It was very good economic news this week. But that's why it's so hard to understand why anyone thinks that the uncertainty around these tariffs and the potential trade war are going to be good for the economy. People here are very concerned about that uncertainty. Everybody from Little Bay Lobster Company who's lost huge orders every week to China, and they're worried they're not going to get that market back, that they've gone to Canada to manufacturing companies like Filtrine over in the western part of the state where they make water filtering systems. So, this is affecting businesses. And one of the things I was very sorry to hear Ambassador Lighthizer say this week at-- when he came before the Appropriations Subcommittee, was that while they're talking about a bailout for farmers, they're not talking about help for small businesses who are being hurt.
MARGARET BRENNAN: It's a-- it's a good point you raise there. And the administration says they won't consider that at this point. I do want to ask you, though, about a colleague--
SENATOR JEANNE SHAHEEN: Right.
MARGARET BRENNAN: --of yours in the Senate, Senator Claire McCaskill. She faces a tossup election out in Missouri and she confirmed personally this week that Russian hackers unsuccessfully tried to access her Senate computer system. Microsoft I guess was out there saying she is one of at least three individuals who-- who were targeted. Who else is on that list?
SENATOR JEANNE SHAHEEN: I don't know who else is on the list but I do know that we've had an experience in our office with people getting phishing e-mails with social media accounts. There has been one situation that we have turned over to authorities to look into. And we're hearing that this is widespread at-- with political parties across the country, as well as with members of the Senate. So, this is a very big issue and it's something that we need to address in a bipartisan way. It affects both Republicans and Democrats. It's about the security of our political process and our government functions and we need to work together to address it.
MARGARET BRENNAN: I know you had some testy exchanges this week before the Senate Foreign Relations Committee with the Secretary of State Mike Pompeo, pressing him for more information on that conversation with Vladimir Putin. Were you satisfied with his answers?
SENATOR JEANNE SHAHEEN: Well, I was disappointed that he refused to address directly any of the specific questions about what happened in Helsinki between President Trump and Vladimir Putin. He continuously referred to policy being the same. And I appreciate that it is important for us to continue those policies. But what we don't know is what might have been agreed to by the President. And all we've gotten, in direct information about what happened, has come from the Russian authorities, from their defense ministry. And I am particularly concerned about Syria, because that's one place where Secretary Pompeo did equivocate, and where the President has gone back and forth on what we should be doing. I was there several weeks ago with Lindsey Graham and we were in northeast Syria where, thanks to our efforts and working with the Syrian Democratic Forces, who are mostly Kurds, we have seen the region stabilize. We need to make sure that continues. We need to find out why the White House is still holding on to the funding that we need for reconstruction efforts there, because the security is good, people are going back home. We went through the market in Manbij, which had been controlled by ISIS for several years. People were out. Kids were playing in the streets. Women were walking around. We need to make sure that that continues and not leave those Syrians to the Russians or to Assad.
MARGARET BRENNAN: Should the President go ahead with sanctions on Turkey, which he called for this week?
SENATOR JEANNE SHAHEEN: I think if-- you know, Turkey is an important ally of the United States. They're an important NATO ally. But we've seen some behavior by Turkey that is not consistent with what we expect from our allies.
MARGARET BRENNAN: That sounds like a yes.
SENATOR JEANNE SHAHEEN: Again, on that trip to-- well, I think we need to see them release the Americans that they're holding on trumped-up charges. We had some positive news this week with Pastor Brunson--
MARGARET BRENNAN: Mm-Hm.
SENATOR JEANNE SHAHEEN: --going from prison to house arrest. But they're holding other Americans.
MARGARET BRENNAN: Yes.
SENATOR JEANNE SHAHEEN: And we need to send a consistent message. Again, on that trip to Syria Senator Graham and I met with--
MARGARET BRENNAN: Senator--
SENATOR JEANNE SHAHEEN: --President Erdogan.
MARGARET BRENNAN: Senator--
SENATOR JEANNE SHAHEEN: He listened. But--
MARGARET BRENNAN: We do have to. We're running out of time here--
SENATOR JEANNE SHAHEEN: We need a message.
MARGARET BRENNAN: --I'm so sorry to cut you off, but we do have to leave it. Thank you for coming on the show. And we will be back--
SENATOR JEANNE SHAHEEN: Thank you.
MARGARET BRENNAN: --in just a moment.
MARGARET BRENNAN: Coming up the next half hour, hundred days out from the midterm elections will the President's policies help or hurt Republicans.
MARGARET BRENNAN: We'll be right back with a lot more FACE THE NATION.
MARGARET BRENNAN: Welcome back to FACE THE NATION. And Wisconsin Republican Senator Ron Johnson joins us this morning from Green Bay. Welcome to the show. Senator, the President--
SENATOR RON JOHNSON (R-Wisconsin/@SenRonJohnson): Good morning, Margaret.
MARGARET BRENNAN: --tweeted this morning that he may shut down the government if he doesn't get border wall funding. You're the chair of the Homeland Security Committee. Should we expect a September shutdown?
SENATOR RON JOHNSON: Let's hope not. I think, hopefully, most of the appropriation bills will actually be passed a little more-- a little better prioritization of spending. So I certainly don't like playing shut down politics.
MARGARET BRENNAN: And how damaging would that be for Republicans ahead of the November races?
SENATOR RON JOHNSON: I don't think it'd be helpful, so let's try and avoid it.
MARGARET BRENNAN: All right. Well, you sound more optimistic than the President does this morning. Let me ask you about the positive GDP number we saw on Friday. You heard Larry Kudlow, the President's economic director, saying this is really a reason to give your support to the President here that the pain that American farmers are experiencing ultimately will be worth it. Do you believe that when it comes to Wisconsin's farmers?
SENATOR RON JOHNSON: First of all, I'm-- I'm far more optimistic as of some of those numbers than I was-- at the beginning of the week. It's really, you know, excellent news. In the last two years of the Obama administration, business investment only grew at a average of 0.6 percent. The last six quarters, we've grown an average of 7.3 percent, and that's just business investment that lays the foundation for future economic growth. So, I think it's incredibly good numbers and very strong economy. And my concern about the-- the trade wars and the tariffs is it puts all that potentially at risk. But, again, I was also very encouraged at the fact that the President called a truce with the European president-- or European commissioner president. In terms of a truce on the trade war let's start negotiating that deal.
MARGARET BRENNAN: Mm-Hm.
SENATOR RON JOHNSON: That I would, you know, certainly provide a-- a united front against China, which is the main problem when it comes to trade.
MARGARET BRENNAN: Well, that's a-- it's an agreement to reach a deal rather than deal itself. But, Senator it sounds like you're--
SENATOR RON JOHNSON: But, at least, it's a-- it's a truce.
MARGARET BRENNAN: Sure.
SENATOR RON JOHNSON: It's a truce.
MARGARET BRENNAN: But you're-- you're really softening the--
SENATOR RON JOHNSON: And I-- and I've been in the White House a number--
MARGARET BRENNAN: --criticism that you voiced earlier this week. I mean you sent a White House-- a letter to the White House saying there's already permanent damage to the U.S. from the trade war. You said it's becoming more and more like a Soviet-era economy.
SENATOR RON JOHNSON: Well, certainly the-- the twelve-billion-dollar aid program it's-- it's a Depression-era program which certainly proves that Ronald Reagan's maxim that the only-- the closest thing to eternal life here on earth is a government program. That's not going to work in-- in any government's hands. So, you know, my-- my hope is that by calling a truce, by moving forward to completing these deals, we never even have to try and implement that twelve-billion-dollar program because that would be a mess. And, yeah, I-- my responsibility is to stay in touch with my constituents and then convey the harm being done by this-- by these trade wars, by these tariffs, and the twelve-billion-dollar package does show the President's listening. So the-- Pres-- President Trump is trying to shock the world trading system because ever since World War II America has been very generous. Our trading partners have taken advantage of our generosity. Other Presidents have--
MARGARET BRENNAN: So you support the twelve billion dollars in aid--
SENATOR RON JOHNSON: --tried and have had some success, but-- but--
MARGARET BRENNAN: --or you don't?
SENATOR RON JOHNSON: No, no, no, no. That-- hopefully, it never gets implemented. Where I'm supporting is President Trump's goal of free trade, fair trade, and reciprocal trade. And we haven't had it. He's trying to shock the system. I take the signal that he called a truce, that, you know, he least understands there's-- there's harm being done so he's trying to pull some way to mitigate that harm. The best way to mitigate the harm is conclude the trade deal with Europe, with Mexico, with Canada, conclude NAFTA. Then as a united trading world we can go to China and demand that they stop stealing our industrial secrets, our military secrets--
MARGARET BRENNAN: Right.
SENATOR RON JOHNSON: --that they start abiding by the World Trading Group rules because China represents more than sixty percent of our trade deficit. They are the primary problem. And I just don't agree the fact that if we're at war with everybody that we're going to adequately be able to address the main problem which is China.
MARGARET BRENNAN: Well, let's talk about the problem in Russia. I know you were in Moscow recently. You came back and you said you think that the reaction to Russian interference was overblown and you called for a softening of sanctions. Do you still believe that?
SENATOR RON JOHNSON: I-- I-- no-- what I called to re-evaluate which sanctions actually work. We are not seeing a change--
MARGARET BRENNAN: So you want them toughened or you want them pulled back?
SENATOR RON JOHNSON: --in behavior of Russia and that's the whole purpose. Well, I-- I want them directed. I think, from-- personally-- again, I'm chairman of the European Subcommittee. We've held hearings. I know how maligned Russia's behavior is. I personally believe the sanctions targeted individuals, the oligarchs, the-- the kleptocrats that would be far more effective than the types of sanctions, for example, that reduce American businesses' influence in Russia. It's a very positive influence. So all I was saying, let's target the sanctions so they actually achieve the purpose, which is change their behavior, get them to pull out of Eastern Ukraine. Right now that's not happening.
MARGARET BRENNAN: Mm-Hm.
SENATOR RON JOHNSON: But, no, I-- listen, China is-- I mean Russia is a unfriendly adversary. I would much rather through passive engagement, trying to get them to change behavior, have them start moving toward no worse than a friendly rival and have them slip into the category of enemy. So I-- I completely agree that we should talk to Russia but I completely agree that we need to approach Russia with real strength and resolve and that's tightening sanctions. But the ones that actually work.
MARGARET BRENNAN: All right. Senator, thank you very much.
We will be right back with a look at how those tariffs and the President's handling of the economy are seen by voters.
MARGARET BRENNAN: We're a hundred days out from the election and we've got some new CBS News Battleground Tracker Poll numbers on the economy, trade, tariffs, and more. We're joined by CBS News director of elections and surveys, Anthony Salvanto, to help us break it down. Anthony, I know you've been in the field, you've been crunching numbers. The President was very proud of this economic growth number he touted this week. Is it winning him political support?
ANTHONY SALVANTO (CBS News Elections and Surveys Director/@SalvantoCBS): Some. Look, optimism is high; optimism is outweighing pessimism especially for his voters, especially for Republicans and for people who say that they're doing better now financially. But, you know, there's a little bit of broader context here for his overall ratings. It's-- he's still in the mid-forties in overall support and part of the reason for that, despite the fact that so many people say the economy is good is that first Democrats are still a little bit leery to give him credit for the economy. And also when people tell us that they're disappointed by his personal behavior, even if they think the economy is good they're more reluctant to say that they approve of the job that he's doing. So some of that is-- is-- sort of tamping down what could be otherwise higher numbers.
MARGARET BRENNAN: So people are still putting a political filter on this it's not winning him new support or winning over skeptical Democrats.
ANTHONY SALVANTO: One of the things we pollsters have been watching over the last few years is how much partisan ratings play into what would otherwise be objective measures, like the economy. People who don't like the party that's in power are more reluctant to say that the economy is good even when it is.
MARGARET BRENNAN: On trade, though, because this is one of those complications we've been talking about. You had a good economic growth number but you have this question of what the impact of the President's trade disputes will ultimately be. And the administration admitted this week that they know farmers are feeling some pain, that's why they put together this twelve-billion-dollar aid package. So is the President's base still sticking with him?
ANTHONY SALVANTO: Yes. What we find is that even folks when we talk to them and they say that their jobs or their households are directly affected by things in the agricultural business, things in farming. They look like the rest of Americans in that they divide on partisan lines. The President's base is--at least in the short term--still with him. Republicans feel that these new tariffs will, ultimately, lead to better trade deals for the United States. They do-- many say that they would-- they expect to see short-term pain. And there's a difference between that short-term pain and that potential for that long-term gain-- gain. For the moment they say that they're willing to or that they think that it's going to be okay at least-- at least in the-- in the long run even if they feel some pain in the short run. And part of that sort of puts them at odds with, you know, Republicans and a lot of conservatives who came out this week and said--
MARGARET BRENNAN: Right.
ANTHONY SALVANTO: --you know, what about the payments, what about to farmers, this isn't part of conservative orthodoxy but what you see there is that a lot of folks aren't really very ideological. They're more practical and Republicans tend to very strongly approve of the-- the twelve billion payout.
MARGARET BRENNAN: What you're highlighting, there's another one of those divides between Republican orthodoxy, which on paper, if you're a conservative you're not supposed to like picking winners and losers or market interventions or welfare, corporate welfare, so to speak. And, yet, while you're hearing those Republicans behind the scenes or even on this show people say they don't like it you're not seeing voters peel away from the President based on that?
ANTHONY SALVANTO: No. And, look, part of this is, it is to a large extent the President's party now in this sense. Trade policy is often a complicated issue. And when we see complicated issues people follow their elected leaders the ones that they already support as guidelines (INDISTINCT) on that.
MARGARET BRENNAN: Even if it's voting against their own interests?
ANTHONY SALVANTO: Well, we don't know, yet, that it's against their own interests. They feel a lot of them say even if they don't like what he's doing right now they tell us that (a) it's a matter of principle, that it should be what the U.S. ought to be doing and also they say that even if they don't like his particular approach they say they are at least glad that he's trying. A third of the folks told us they were-- they were at least glad that he was trying. So it appears to get some credit at least for that and again at least among his base. With everybody else things are much more mixed.
MARGARET BRENNAN: The President said he's going to be out there campaigning, like six days a week ahead of these November races. Does his popularity transfer to other Republicans, more-- traditional Republicans on the ballot?
ANTHONY SALVANTO: It looks like that's one of the big questions going forward. Here's what we know. We know that Republican rank and file say that they would like their candidates to be in line with President Trump. Those numbers at three quarters are much higher than, say, splits within the Democratic Party.
MARGARET BRENNAN: In line meaning don't criticize him?
ANTHONY SALVANTO: They do not often like. This-- the strongest supporters do not like the President being criticized at all. His more conditional supporters are okay with that. His more conditional supporters which make up about half of his overall support are okay with the back and forth between him and members of Congress. The thing I think to watch, though, is voters across the board, including Republicans, say he's not a typical Republican.
MARGARET BRENNAN: Mm-Hm.
ANTHONY SALVANTO: They like that about him, they say so. But does that mean that his popularity among the base which is high does that mean a transfer is over to Republican members of Congress, Republican senators? That's the thing that we don't yet know.
MARGARET BRENNAN: Was there any political damage from this controversial meeting with Vladimir Putin of Russia?
ANTHONY SALVANTO: Well, his base tells us that they would like to rush to his defense when they hear him criticize for handling Russia. There's really been a personal connection between them and the President all along. But we also do see that when we look ahead we say, well, what happens if Russia interferes in the 2018 elections, is that okay? And people both partisan stripes tell us, overwhelmingly, it is not, even if it were to help their party. So, in principle, people are not okay with this but there's a difference between that principle they tell us and what a lot of Republicans see as unfair criticism of the President. President they think is facing more pushback from the establishment than other presidents have, that's how they see it.
MARGARET BRENNAN: All right. Anthony Salvanto, thanks for breaking it down for us.
ANTHONY SALVANTO: Thanks, Margaret.
MARGARET BRENNAN: We'll be back in a moment with our panel.
MARGARET BRENNAN: It's time now for some analysis of the news of the week. Anne Gearan covers the White House for The Washington Post, Shannon Pettypiece is a White House correspondent for Bloomberg News, Ed O'Keefe covers politics right here at CBS, and Salena Zito reports for The Washington Examiner and is a columnist for the New York Post. So, Salena, best economic growth numbers since 2014.
SALENA ZITO (New York Post/@SalenaZito): Yeah.
MARGARET BRENNAN: Does this make the President bulletproof?
SALENA ZITO: For him, it's good news. You know, he-- for the people that voted for him they take a look at this and-- and they-- it-- it reaffirms why they-- for some of them stuck their neck out to vote for him. And for others why they-- you know, this confirms what they believe that he was going to do in that they don't like these sort of multi-national deals. They like these sort of bilateral deals. And so when he-- he makes some of these trade moves and-- and you see the economy growing through the tax cuts and through deregulation and through energy growing, they're-- they're happy. They're very happy with what has happened. Now, does that transfer I think is important to wonder. Does a trust transfer into these House and Senate elections?
MARGARET BRENNAN: Mm-Hm.
SALENA ZITO: And we-- I don't know if we know that. But in that-- in that polling, it certainly shows that his supporters are still strongly behind him and they-- they back him even when sometimes he doesn't deserve to be back. Like, you know, most people will take a look at what happened in Russia and say, not exactly your best move. But they'll even still sort of back him on that. So they're happy right now.
MARGARET BRENNAN: Shannon, it seems an article of faith, though, because even as Larry Kudlow was sitting here there's no actual agreement signed for any purchases of any kind of products at this point.
SHANNON PETTYPIECE (Bloomberg News/@spettypi): And--
MARGARET BRENNAN: There is no trade deal.
SHANNON PETTYPIECE: Right. And EU officials were pushing back a lot on the rosy picture that the White House was painting here. I think there's still a lot of questions we don't know about what the long-term or even short-term consequences of these tariffs are going to be. Remember these are second-quarter numbers. The full effect of these tariffs haven't been felt, they're just starting to be felt now. And when you look at some of these states, Michigan, Wisconsin, Minnesota, the manufacturing industries in those states are the ones who are going to feel this the most. And we're not talking-- just talking about GM, which put out very negative numbers this week because of these tariffs but we're talking about a small company that makes aluminum foil labels-- company that makes washing machine parts because of the increase and costs of steel and aluminum. So I think this is a story that's just beginning to play out right now.
MARGARET BRENNAN: Ed, the President is tweeting this morning, threatening a shutdown--
ED O'KEEFE (CBS News Political Correspondent/@edokeefe): Yeah.
MARGARET BRENNAN: --presumably, in September over immigration. You add what Shannon just painted in terms of a potential economic worry. You look at a shutdown. What does this do for other Republicans running?
ED O'KEEFE: Well, and what's weird about this is or, perhaps, not surprising giving how this President operates is we heard from top congressional leaders who met with him this past week that they weren't going to have this fight that the President had agreed to sort of punt on immigration into the lame duck session after the elections closer to Christmas because he understood that things were so fragile right now that it wouldn't make sense to have this kind of fight. Well, what did he do this morning? But totally backtrack and say, no, no, no, we're going to have that fight. Yet again this year--
MARGARET BRENNAN: He wants to fight.
ED O'KEEFE: --over twenty-five billion dollars for a border wall, making sure that there's enough money for ICE. It's going to tie up Democrats who are having fights among themselves right now about immigration policy. But also potentially adversely affect a lot of those House Republicans who don't want to be seen as part of something like that when at a time, you know, at a time when they're struggling to certainly to build support and hold support.
MARGARET BRENNAN: Anne, you heard Salena say, you know, some people would look at what happened with this meeting with Vladimir Putin and say this was not the President's best moment even if you are a big supporter. You had the secretary of state in a very contentious hearing layout what he could say publicly about that. And-- and I know one of your colleagues defined it as an armed retreat from the President's policies.
ED O'KEEFE: Mm-Hm.
ANNE GEARAN (The Washington Post/@agearan): Yeah.
MARGARET BRENNAN: Is that how you see it?
ANNE GEARAN: Yeah. I think that's-- that's-- that's quite accurate. I mean on the Pompeo hearing, particularly, I mean he was there for three hours and he advanced the knowledge of what happened in a two-hour meeting maybe this much, maybe. And as-- as Senator Shaheen said he kept going back to well the-- here's what the policy is and the policy hasn't changed. He's speaking not there, not so much to Trump voters as to the Republican establishment. He's certainly speaking to the senators facing him in the room there with a message of nothing to see here, folks. Don't worry like whatever that was it isn't going to change the policy. And-- and many of the senators said afterwards they're not really convinced that-- that Pompeo himself knows what happened in-- in that private meeting despite Pompeo's assurances that he does. And it-- I mean I think it very much remains to be seen whether this some continuing discontent with-- with how the President handled it becomes more of an issue in-- in the elections this fall. We don't really see it so far. The-- the strong partisan divide in that polling suggests that if you had-- whatever your opinion of his handling of foreign affairs, in general, whatever your opinion of Trump and Russia, this didn't change it much.
MARGARET BRENNAN: Salena, it's-- it-- it reminds me of something we were talking about when the President was on the campaign trail which is, essentially, secretary of state was saying don't pay attention to what the literal statements being made by the Command in Chief, listen to me instead.
SALENA ZITO: It's-- sort of that thing that I said when I interviewed him voters take him seriously but not literally. But we take him literally and sometimes not so seriously.
SHANNON PETTYPIECE: Well, and-- what-- what about foreign leaders? Who do you listen to? I mean that was the problem--
SALENA ZITO: Right.
SHANNON PETTYPIECE: -- Rex Tillerson got into where he would say one thing and Trump wound undercut him and it's the dance Pompeo was doing too at that point.
SALENA ZITO: Yeah. You know, I mean, look, he has always sort of have been a liberal with his use of words. And I-- I think the literally, seriously thing has morphed into the Tuesday Thursday Trump, or whatever he says on Tuesday is could be completely different on Thursday, and nobody knows how it happens in between. But something a voter said to me last week I thought was really, really interesting. She voted for Obama twice and then she voted for Trump and she said, look, for years politicians have said the most wonderful things. Their speeches have been great. But I also understand that they've been massaged and focused-grouped and-- and I didn't always get the results that I was promised. I don't like what he says half the time, but I love the results. And that sort of the-- the quandary that I think some voters face because they see-- they see some of the results that they want certainly take a look at the, you know, the-- the regulations being pulled back or with the Supreme Court justice. But they're not always happen at really happy in the way he says things or his manipulation of the truth.
MARGARET BRENNAN: Ed, the reunification policy ending the separation policy. The President, you know, this was another retreat but there are still seven hundred children or more--
ED O'KEEFE: Right.
MARGARET BRENNAN: --who are left in detention facilities not reunited with their parents. Does this stick?
ED O'KEEFE: It sticks with a certain segment of voters who I think are less supportive of the President, because they see this as the evidence of an incompetent administration of a guy who-- who doesn't care about certain segments of the country. And-- and it could speak to-- to those, especially the Democrats who believe that there's a check and balance argument to make with voters here. That if-- if there was a sharing of power in Washington, perhaps, it would be better accountability for the agencies who were implementing this and a better understanding of what went on. But-- but certainly, you know if-- if you're-- if you're someone who doesn't like his immigration policies, you-- you don't like him to begin with and this is just, you know, salt in the wound.
SALENA ZITO: And you're right. I mean midterms are like often are brake pedal elections, right? They want to put the power in check--
ED O'KEEFE: Right.
SALENA ZITO: --and-- and get that balance in Washington and that's the challenge that the Republicans face. How much do you think that people are motivated not just Democrats but independents and unhappy Republicans? How much are they motivated to show up and put those brake pedals on?
ED O'KEEFE: You know, I-- I just wonder, you-- you talk about family unification, you talk about the trade issues these are not things that directly affect the everyday life of an overwhelming majority of Americans.
SALENA ZITO: That's true.
ED O'KEEFE: They don't live by the detention center.
SALENA ZITO: Right.
ED O'KEEFE: They're not an immigrant. They're not a farmer. There's no issue right now that's really directly affecting peoples' either pocketbook or safety--
SALENA ZITO: Yeah.
ED O'KEEFE: --or something else. It's all about what you make of him. What do you make of the function--
SALENA ZITO: Yeah.
ED O'KEEFE: --of your government generally? And-- and those are tougher arguments to pin down making it seem as if this is going to close far closer to November, I think.
MARGARET BRENNAN: Anne, there was something that secretary of state was pinned down on in this hearing and that was his admission that North Korea is still developing nuclear material--
ANNE GEARAN: Yeah.
MARGARET BRENNAN: --that directly contradicts what the President said.
ANNE GEARAN: Yes. And that left us this week sort of one up and one down on-- on-- on North Korea. They did actually begin the promised repatriation of American servicemen remains from-- from the Korean War that was something that-- that Trump walked out of his meeting with Chairman Kim six weeks ago saying what happened immediately, the North Koreans, as they usually do, dragged that out but they did actually start doing it. But on the far more important question pertinent to the nuclear negotiation, yes, the-- the U.S. government has now been forced to-- to acknowledge what was pretty widely available through-- through publicly available intelligence that-- that North Koreans have continued. Most analysts expect North Korea to continue to continue and also to-- to begin more seriously hiding some of the-- the facilities and some of the capabilities that they currently have if these negotiations progress. The more they hide, the more they have potentially to give away later or save for later.
MARGARET BRENNAN: So why did the President open this new line of attack against Iran at least rhetorically this week technically?
SHANNON PETTYPIECE: Yes. Well, you know, we were talking about Russia and if he wanted to get someone talking about something else why don't you threaten war against Iran and then when we continue to press the White House on, is there a red line on Iran what do you mean by this? Nobody in the administration seemed to have a clear answer for that. So, yes, this was all of a sudden North Korea's not looking good, relations with Russia aren't looking good, let's turn our focus to Iran. But, of course, that argument hasn't stuck either because the week has now been consumed by Michael Cohen and everything else Russia-hacking related.
MARGARET BRENNAN: Shannon, thank you.
We'll be right back. Stay with us.
MARGARET BRENNAN: That's it for us today. For FACE THE NATION, I am Margaret Brennan.