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Disaster Couldn't Put Obama Cabinet Member in Oval Office; Trump About to Arrive in D.C. as Obama Says Farewell; Obama's Advice to Trump: "You can't Do It By Yourself; Obama: "At My Core, I Think We're Going To Be OK"; Obama Gives Message to Trump In Final News Conference; Obama Refuses to Comment on Inauguration Boycott; Trump Arrives in DC for Pencer Dinner; George H.W. Bush in ICU, Barbara also Hospitalized; Aired 7-8p ET

Aired January 18, 2017 - 19:00   ET


BRIAN TODD, CNN CORRESPONDENT: -- in secure, undisclosed locations, bunkers in some places, all of them within a reasonable distance from Washington.

WOLF BLITZER, CNN ANCHOR: Brian Todd reporting. Thanks very much. That's it for me. Thanks for watching. Erin Burnett OutFront starts right now.

ERIN BURNETT, CNN ANCHOR: Thank you, Wolf. OutFront next. The breaking news, President-elect Donald Trump about to arrive here in Washington as the current President says his final public goodbye. Plus our interview with Mike Pence, the Vice President-elect talking inauguration, Russia, and the man he's turning to for advice.

And President George H.W. Bush and Barbara Bush both in a Texas hospital tonight. The very latest on their condition this evening. Let's go OutFront.

Good evening. I'm Erin Burnett. And welcome to a special edition of OutFront. We are live in Washington tonight. We begin with the breaking news, President-elect Donald Trump is about to arrive right here in Washington. Less than 48 hours before he's sworn in as the next President of the United States. He's -- it's a significant night. His final flight aboard his own private jet before being president. Of course we know that's the one with the Trump name emblazoned on the side, the T on the tail. The President-elect arriving at Washington's Reagan National Airport soon.

Here to kick off a series of lavish inaugural events. Tonight a couple of exclusive dinners, one for Mike Pence, a second honoring his cabinet picks, some deep-pocketed donors at these with donations of up to a million dollars, this as a Trump transition official tells CNN Trump has written his inauguration address draft himself, a draft he says he began working on over the holidays at his Mar-A-Lago state. The changing of the guard is in full force today.

President Obama making his final public appearance, the last news conference with several pointed remarks for Donald Trump taking the podium in the White House pressroom defending the role of a free press and the importance of asking tough questions. (BEGIN VIDEO CLIP)

BARACK OBAMA, UNITED STATES PRESIDENT: Having you in this building has made this place work better. It keeps us honest. It makes us work harder. You have made us think about how we are doing what we do and whether or not we're able to deliver on what's been requested by our constituents.


BURNETT: The president saying he has had cordial and substantive, those were his exact words, when he talks about his meetings and conversations with Donald Trump. Also weighing in one last time on the question of Israeli/Palestinian relations saying, "Trump will have his own policy, cautioning him, this is volatile stuff." We begin with Michelle Kosinski OutFront at the White House tonight. Michelle, the president trying to cover a lot of ground. I have imagine this was emotional but there were a lot of things he felt he need to say in this last press conference.

MICHELLE KOSINSKI, CNN WHITE HOUSE CORESPONDENT: Yes. I mean, it was broad, but, no, it wasn't the rollicking last chance, ask whatever you want, good time that at least some of us hoped it would be. Pretty much followed the expected script. It also wasn't hugely sentimental, but it was clear the President wanted to send some strong messages to the incoming administration, starting with right off the bat standing there in front of the White House press corps and lauding it for being essential to democracy itself. President Obama opened his final press conference as President by thanking the press corps, telling them they make the White House work better.

OBAMA: You're not supposed to be sycophants, you're supposed to be skeptics, you're supposed to ask me tough questions. America needs you and our democracy needs you.

KOSINSKI: And he defended his decision to commute the sentence of Private Chelsea Manning convicted of stealing and leaking sensitive military documents to WikiLeaks.

OBAMA: Let's be clear. Chelsea Manning has served a tough prison sentence. You know, I feel very comfortable that justice has been served and that a message has still been sent.

KOSINKSI: The president promised that a fundamental democratic principles are undermined in the days ahead he will not remain silent.

OBAMA: There's difference between that normal functioning of politics and certain issues or certain moments where I think our core values may be at stake.


OBAMA: This is something I have told him, that this is a job of such magnitude that you can't do it by yourself. You are enormously reliant on a team. KOSINKSI: As the first black president, President Obama said he expects he won't be the last to lead the nation.


KOSINKSI: And finished this last gathering my expressing his optimism for the future of the country.


KOSINKSI: This is the President who's leaving very popular but his intended candidate did not win the election. He ran his historic campaign on hope and change but he ends by saying I think we're going to be OK, we just have to fight for it. I mean, that is not a very optimistic attempt at an optimistic message. But it was also clear he didn't want to be critical as he has been in the past. He kind of framed everything as a sort of warning or advice, and also he wouldn't weigh in at all on all these democrats in congress who are now boycotting the inauguration. There are dozens of them.

And even though his administration has weighed in and said they don't think they're harming the smooth transition or contributing to division, this was President Obama's chance to weigh in himself on it, and he just wouldn't comment at all. Erin?

BURNETT: All right. Michelle, thank you very much. OutFront now Mark Preston, our Senior Political Analyst, David Gergen, former Presidential Adviser to four presidents, Nia-Malika Henderson, our Senior Political Reporter, David Axelrod, former Senior Adviser to President Obama, Kayleigh McEnany, Conservative Contributor for the Hill, and Michael Nutter, the former Mayor of Philadelphia. Nia, you heard what Michelle just said. His words, I think we're going to be OK. Is that calming or deeply unsettling?

NIA-MALIKA HENDERSON, SENIOR POLITICAL REPORTER: You know, I think it was meant to be calming, but in many ways the fact that he felt like he needed to be calming speaks to how unsettled at least half the country is. Certainly the 65 million or so who voted for Hillary Clinton. We're so used to Obama being optimistic often at times when maybe he shouldn't be optimistic. Talki about hope and change, yes, we can, all the slogans of his campaign, the rising sun from his campaign logo and this was such a downgrade I think in terms of his -- in terms of message and in terms of his brand. So, I think for some people it was -- it was unsettling that he's not more buoyant about Donald Trump's presidency and the future of the country.

BURNETT: Well, the context here of course, Mark is, the second biggest boycott in modern American history of an inauguration. Only Nixon's second term was bigger and that was about the Vietnam War more than it was about even Richard Nixon. John lewis saying he's an illegitimate president, and the President trying to calm people but it is deeply unsettling in a sense and he think we're going to be OK.

MARK PRESTON, CNN SENIOR POLITICAL ANALYST: No doubt. I mean, looking at more than 50 members, democratic members of congress who are not going to show up, which shows how divided the country is. And as much as we saw President Obama -- excuse - yes, President Obama today show some deference to Donald Trump. He also laid down the gauntlet and he said he's not going away, Erin. He said specifically on a couple of issues that he wouldn't go away when our core values are at stake, and specifically he goes at the idea of a free press and he also goes at the idea of trying to protect those children who were brought here unbeknownst to them and that the U.S. being the only country that they know. And the idea that he told -- and he said that today that he would directly challenge Donald Trump I think was telling.

BURNETT: And, you know, David, on that point, he did talk about his conversations with the President-elect. And they were very different than what he said during the campaign, when at one point he said that Trump was uniquely unqualified for the office. It was much kinder and gentler today. Here's how he described the conversations.


OBAMA: They are cordial. At times they've been fairly lengthy and they've been substantive. I can't tell you how convincing I've been. I think you'd have to ask him whether I've been convincing or not.


BURNETT: Lengthy and substantive.

DAVID AXELROD, FORMER SENIOR ADVISER TO PRESIDENT OBAMA: Yes. Look, I think from the very beginning since the election the President has tried to do for Donald Trump what George W. Bush did for him which is to provide an orderly transfer, to be helpful where he can be helpful and where his people can be helpful. And I think in this press conference he was trying to be helpful as well. Some of the advice that he offered there is good advice for President, David Gergen served I think half the presidents in our history.

BURNETT: In our history.

AXELROD: He knows -- he knows the -- he knows this but the notion you can't do it alone, that you have to rely on your team and that's important.

BURNETT: But a lot of it was in a -- it was criticism.

AXELROD: Well, I think it was more in the form of admonition, it was more in the form of admonition. The most important one I think he delivered was his point that it is absolutely normal for presidents to take the country in a different direction but he said, just make sure you think it through because there are tremendous ramifications to lurches in policy, and I think that's a really essential point.

BURNETT: And yet, Kayleigh, he did not. He refused to weigh in on the boycott, which was a very significant thing, right? He did -- he didn't want to comment on it at all.

KAYLEIGH MCENANY, CONSERVATIVE CONTRIBUTOR, THE HILL: Sure. He didn't weigh in on the -- weight in on it. I would have obviously liked to have seen that and to say, look, we should all come together, this is a time for unity. That being said, I have to commend President Obama because he has handled this transition gracefully, respectfully, and I think today when I heard him say we're going to be OK, I understood some saw that as dire terms, not quite as optimistic as they would have liked, but I saw it in the context of there is a boycott, there is this apoplectic view among liberals that we are not going to be OK, that this is somehow the end of the United States. And for him to say that, it was almost --

BURNETT: So you actually find it calming.

MCENANY: I did find it calming and I thought this was another part of him being graceful in the transition while I disagree with Obama on a lot, I have to commend him because he has done this transition very well.

BURNETT: Mayor, should he have weighed in on the boycott in some way?

MICHAEL NUTTER (D), FORMER PHILADELPHIA MAYOR: He said he knew what he was going to be doing. He's going to the inauguration. It's not for him --

BURNETT: The biggest statement he could make.

NUTTER: Yes. I mean, it wasn't a weigh in with the members of congress and a fight between congress and the incoming president and all that. He's trying to ease out in the most positive way that he can. He laid out as Mark talked about, three, four, five different things that he feels very seriously -- he feels very strongly about. And -- I mean, look, it's not like he said, oh my god, you know, the country is going to hell in a hand basket. He said I think we're going to be OK. He's being himself.

AXELROD: Can I just take one point? On the things he laid out, I think he laid them out not just in service of saying these are things on which I will comment if I feel I need to, it was also by way of telling people I am not going to be involved in the day to day, I am not going to get involved in policy fights. I don't think that's the appropriate role for a president. So, there are those who would love him to be the point of spear and to be some sort unofficial leader of the party. He is clearly saying that is not the appropriate role for a former president.

BURNETT: And this was his good-bye.

HENDERSON: Yes. It was his goodbye. We saw him last week in Chicago, the longer speech and this -- his goodbye and his parting words, the idea about being OK. I do think on the core issues he seems to also be saying that (INAUDIBLE) an attack on sort of American values, if there is an attempt to codify discrimination, and that's when he would act. If there was an attempt to put obstacles to voting rights, to institutionalize a discrimination against the press, then that's when he would act.

BURNETT: All right. We'll hit pause for one moment. Next Mike Pence speaking to CNN, opening up about a former president who's now giving him advice about the job. Plus my exclusive tour behind the scenes of this year's inaugural ball. The glitz, the glamour, how it actually is all going to come together. Some of those fine details of fashion. And Trump's pick for Education Secretary asked if guns belong in schools answered this.


BVETSY DEVOS, NOMINEE FOR UNITED STATES SECRETARY OF EDUCATION: I would imagine that there's probably a gun in the school to protect from potential grizzlies.


BURNETT: The senator who asked that question is my guest tonight.


BURNETT: Breaking news. Donald Trump just landing in Washington. As you can see, his plane there tonight the last flights aboard his Trump 757. From then on of course it will be a military plane here to Washington and then Air Force One. This is just two days before he becomes president. He is attending two dinners tonight, the first for the Vice President-elect Mike Pence, this is going to be for big donors, $500,000 to $1 million for Mike Pence tonight. Dana Bash had a chance to sit down with Pence today in the final hours before the inauguration and she asked him about a crucial issue facing Trump.

DANA BASH, CNN CHIEF POLITICAL CORRESPONDENT: There is a bipartisan bill moving through congress that could end up on the president's desk pretty early to increase sanctions to punish Russia. Would you advise President Trump to sign or veto that?

MIKE PENCE, VICE PRESIDENT-ELECT: Well, we're aware of that and I've talked to several members of the senate about that. Last week of course the President-elect acknowledged that it was likely Russia that was involved in the hacking last fall. And so, we'll look at all those options. Well, of course, we'll look at all those options. But I'll start today telling you that what I advise the President after January 20th will be between him and me.

BASH: I get that. I get that. But I think broadly do you believe that Russia should be punished for trying to meddle in American elections?

PENCE: You know, our President-elect has made it very clear that he is determined to try and improve the relationship between the United States of America and Russia. That's not to ignore the evidence that we have about Russian involvement in hacking last fall, but it's just his determination to come in, recognizing that we have a terrible relationship with Russia right now and to explore the possibility of improving that relationship. But remember, it's not so much about being friends with Russia. It's about -- it's about once again establishing respect between the two parties and the two nations and looking for ways, Dana, that we can work together for common purposes. Most specifically finding ways that we might martial the resources of both of our nations to hunt down and destroy ISIS that represents a threat to all of our people.

BASH: Absolutely. And there are -- there are lots of ways to work together. But just a little bit on this, what I've heard from democrats and republicans is if we don't send a signal to Russia, that this is not OK, then this is going to give a green light, not unlike the red line in Syria, this is going to give a green light to other countries, you know what, you can meddle in until American elections and you're not going to get punished for it. We're going to reach out and say you're our friend. Do you think there's something to that?

PENCE: I think the fact that this last administration, whether it was moving red lines or feigning resets with Russia, established a pattern on the world stage that eroded the respect for our country --

BASH: So how do you stop that? Can you stop that by drawing a line? I mean, you said with the provocations by Russia need to be met with American strength. I would imagine you would think that's the case if they meddled in American democracy.

PENCE: Well, I can promise you that when his right hand comes down this coming Friday the world will see a America's strength in the oval office. And I truly do believe that our President-elect, as he did last night at a diplomatic dinner, he's going to reach out with a hand of friendship to all the nations of the world but he's also going to send a very clear message that America comes first, America's interests come first and that we will stand strongly for the safety and security of our people and all of our systems.

BASH: My understanding is that you got a call from former President George H.W. Bush recently, who of course was not just president but he was vice president for eight years --

PENCE: He was.

BASH: -- under Ronald Reagan. Did he give you any advice on how to be an effective vice president?

PENCE: He did. We had -- we had a short call and obviously he's in our thoughts and prayers for a quick recovery. I just -- I have tremendous respect for our President George Herbert Walker Bush and his son, of course. But when you look at his long career, a child of affluence who made a decision after high school to enlist in the military, become a fighter pilot, was shot down in Chichi Jima, his long career in various roles, his service as president, but to your point, Dana, I have really been taking a hard look at his years as vice president --

BASH: And what have you learned?

PENCE: --under our 40th president. Well, it was -- it was an administration that changed the country and changed the world. And -- BASH: Is there any specific, you know, sort of things that he's done or broad actions that he took that you look at and say that's how I want to be, that's how I want to act? Anything that he told you?

PENCE: The reason why I think about Vice President Bush is because then, as now, I believe there was a transformational leader coming to bring real change to Washington, D.C. When Ronald Reagan took to that stage, he said after all why shouldn't we dream great dreams. We're Americans. And he said, we've come to change our nation's capital.

BASH: And is that what you're going to be thinking about?

PENCE: And I'm going to be thinking about the privilege I have to stand next to another change agent as president. I really do believe that the kind of broad shouldered leadership that Donald Trump is going to bring to the oval office and bring to our nation's capital, where he's going to demand that we have government as good as our people here in Washington, D.C., echoes that time back in 1981 with another inauguration. And so to see the way that then Vice President Bush came alongside and supported a strong visionary leader is a great source of inspiration.

BASH: Have you been able to soak in what's going to happen behind you? Have you been able to sort of take it in and say, wow, we were talking before the interview that when you walk through the halls of the senate there are busts of vice presidents. You're going to be a bust in there at some point. I mean, does that -- have you digested that?

PENCE: It's all very humbling for me. My daughter and I pause before we came into your studio and just -- we looked down the national mall and, you know, I can't get too far from thinking about the man after whom I was named, my grandfather, who grew up in a little two-room house in a town called the Tubbercurry in Ireland, and when he was 22 years old he got on a boat and came to America. He drove a bus for 40 years. He raised a wonderful, extraordinary woman who would be my mother.

He watched her marry a fast-talking salesman who built a small business in a small town. But to think in the span of two family generations that we would go from the upper Tubbercurry, Ireland, and the American dream to being able to stand with my right hand in the air and accept responsibilities to be the 48th President of the United States, it doesn't tell me so much about me as it tells me about this country. This is a great country and I'm incredibly humbled to have an opportunity to serve as vice president.

BASH: I've gotten to know your daughter Charlotte, she's been on the campaign trail with you. Your son who is a marine is also going to be with you.

PENCE: He will.

BASH: And I'm just also wondering if you're going to be thinking about the fact that you are going to have an awesome responsibility when it comes to men and women of the armed forces and it's duly personal for you since decisions that you and the president will make will affect your son.

PENCE: Well, the President of the United States has no greater responsibility than that as Commander in Chief and I can tell you the connection that our President-elect has made to men and women in the military or men and women who serve as first responders across this country --

BASH: There's nothing like having a son in the military.

PENCE: They sense that he understands that. He's committed to providing them with that support. And for my part, I just look forward to supporting his efforts to provide that kind of strong leadership to make sure that those that serve in uniform have the resources and training they need. But to be able to stand with my son and his new wife, our daughter and our youngest daughter, of course my wife, Karen, is going to be a very special moment. And I'll probably have a big lump in my throat when we do it.

BURNETT: And Dana bash joins me now along with the rest of our panel. You talked about a lot there. And pretty -- very revealing of Mike Pence and where he is right now. But particularly on the day when we find George H.W. Bush hospitalized. He is frail, Barbara Bush also, he's taking a hard look at his years as VP.

BUSH: That's right. And I thought it was interesting. I found out before the interview that 41, the 41st President George H.W. Bush had called Mike Pence last week so that's why I wanted to ask him about it anyway but obviously in light of the fact that he's in the hospital now, it was even of more interest to me. And the fact that he sees -- Pence sees parallels between Reagan/Bush and Trump/Pence, you know, we'll see if that turns out. But more along the lines of Reagan/Trump and they both, you know, disrupted in Washington and so on and so forth was really fascinating.

And I should say when it comes to Ronald Reagan, Mike Pence I think it's fair to say is obsessed with Ronald Reagan. I interviewed him at the Reagan Library. He's going to be sworn in on the Reagan bible. And so that connection hat he has to Ronald Reagan through George H.W. Bush I think is also --

BURNETT: And he is very much trying to make that argument that, you know, Reagan and Trump are the same in being a change agent, you know, and that that is how he sees this analogy playing out.

GERGEN: They're both change agents but very different. I do think that Mike Pence has chosen an admirable role model for his vice presidency. George H.W. Bush, you know, was very different from Ronald Reagan and yet he always was -- he walked quietly behind him, he never stood in his shadow, he never injected himself, he was always loyal, he was a good ambassador to Capitol Hill. He'd come up to the house gym to hang out with people.

What really made that relationship work and David Axelrod would talk about this, it was that early on Ronald Reagan agreed to have a weekly lunch with his vice president, just one-on-one, they had lunch every week, nobody ever talked about what was said. That's where he made his -- that's where he gave his advice (INAUDIBLE) but interestingly enough, Bush would often come around to us in the White House staff and say I had my lunch with the president. A couple of hours, listen, do you have a good joke I can tell him? Because everyone in there -- Reagan always had a fresh joke. He always had something and Bush need to be-- he had all the policy stuff. He just needed to be armed with a couple good jokes.

BURNETT: Hilarious. And David, can he learned from a --

GERGEN: Reagan was the first guy I go to for --

BURNETT: Can (INAUDIBLE) Pence learn from H.W. on the issue of saying his own mind? He -- remember in his debate, he was against -- opposite side of Trump on issue after issue after issue and yet here he is, you know, you're saying walking in his shadow and not stepping on --

AXELROD: Well, he's unbelievably artful at sort of reprogramming the question to sort of navigate around these conflicts with Trump. I would make two points about George H.W. Bush and Mike Pence. One is Ronald Reagan chose George Bush after George Bush had run against him for president, attacked him for voodoo economics and so on, and he did it because he wanted to broaden his reach, because George Bush had a reach to more moderate republicans and this was part of his effort.

The second is George H.W. Bush had been ambassador to the U.N., a congressman, ambassador to China, and a vice president and when he approached the presidency of international affairs, Pence talked about president -- America being more respected in the world, that may be, but right now the world is jittery because of the way Donald Trump has approached global affairs in his transition. So he needs to take a cue from George H.W. Bush who had enormous respect in the world and really respected global institutions.

BURNETT: And George H.W. Bush, fair to say, was very embarrassed during this campaign when someone outed him for voting for Hillary Clinton, right? He didn't want that to come out. It did. As Dana reports, they had a conversation last week, Mike Pence and H.W. Bush and he -- and he wrote a letter to Donald Trump and in it he said -- he made a joke, he made a joke about how he couldn't come out in the cold, and then he continued to say, we will be with you and the country in spirit, I want you to know I wish you the best as you begin this incredible journey of leading our great country. If I can ever be of help, please let me know.

PRESTON: Incredibly gracious. I mean --

BURNETT: Incredibly gracious.

PRESTON: Incredibly gracious.

BURNETT: Not to say that others haven't been but by far the most. This is just incredibly -- it's a giving statement.

PRESTON: Right. And he didn't take a step back as well from that. Think about it. This is a father as well and Donald Trump really went at not only his son who was president but his son who was the governor who challenge

[19:30:00] ERIN BURNETT, CNN ANCHOR: It's just incredibly -- it's a giving statement.

MARK PRESTON, CNN POLITICS EXECUTIVE EDITOR: Right. And take a step back from that. Think about it, this is a father as well in Donald Trump really went at not only his son who was president but his son who was the governor, who challenged him for the Republican presidential nomination and it got very personal.

BURNETT: I mean, incredibly nasty.

PRESTON: Right. And to see George H.W. Bush write a letter like, that I really think shows actually the kind of politics that we should be engaging in right now. While we may disagree on policy, things have gotten so nasty it's personal.

BURNETT: Yes, all right.

As Trump begins his celebration parties in Washington, motorcade on the way to the party for the vice president-elect, Michael Pence, as I said, that's going to be at the National Portrait Gallery. Donald Trump going there to honor his incoming vice president. The Senate Minority Leader Chuck Schumer is issuing a serious threat to the incoming team. Schumer saying he may slow down confirmations for President-elect Trump's cabinet nominees.

Health and Human Services nominee Tom Price is on the top of that list, today defending his investments in companies that benefited from positions he took in Congress.


SEN. CHRIS MURPHY (D), CONNECTICUT: A diversified portfolio while staying clear of the six companies that were directly affected by your work on that issue?

REP. TOM PRICE (R), DEPARTMENT OF HEALTH AND HUMAN SERVICES NOMINEE: As I said, I didn't have any knowledge of those purchases.


BURNETT: Senator Murphy is going to be my guest in just a moment. First, though, Sara Murray is OUTFRONT.


SARA MURRAY, CNN POLITICS REPORTER (voice-over): Donald Trump appears to be set to enter the White House without most of his cabinet picks.

DONALD TRUMP (R), PRESIDENT-ELECT: The cabinet members, we have put together a team I think the likes of which has never been assembled before.

MURRAY: With just two days until he takes the oath of office, a number of Trump's nominees are getting grilled on Capitol Hill, and publicly splitting with their new boss. Perhaps the most intense questioning was reserved for Congressman Tom Price, Trump's pick to lead the department of health and human services and dismantle Obamacare.

PRICE: I believe and I look forward to working with you to make sure that every single American has access to the highest quality care and coverage that is possible.

SEN. BERNIE SANDERS (I), VERMONT: Has access to does not mean that's they are guaranteed health care. I have access to buying a $10 million home. I don't have the money to do that.

MURRAY: Price facing sharp questions not only about his plans to overhaul the health care system but his past financial investments. That's after CNN reported Price bought shares in a medical device manufacturer just days before introducing legislation that would have benefitted the company.

PRICE: Everything that we have done has been aboveboard, transparent, ethical, and legal.

MURRAY: Today, Price insisted he has no idea what stock he owns.

SEN. ELIZABETH WARREN (D), MASSACHUSETTS: This is someone who buys stock at your direction. This is someone who buys and sells the stock you want them to buy and sell.

PRICE: Not true.

WARREN: So when you found out --

PRICE: That's not true, Senator.

WARREN: Well, because you decide not to tell them? Wink, wink, nod, nod, we're all supposed to believe that?

MURRAY: And said he didn't have any conversations with his broker about his political activity.

MURPHY: Why wouldn't you at least tell her, hey, listen, stay clear of any companies that are directly affected by my legislative work?

PRICE: Because the agreement that we have is that she provided diversified portfolio which is exactly what virtually every one of you have in your investment opportunities.

MURRAY: Trump's pick to lead the environmental protection agency, Scott Pruitt, also irks Democrats with his views on climate change. He acknowledged human activity contributes to it but wouldn't say to what extent.

SANDERS: Why is the climate changing?

SCOTT PRUITT, EPA ADMINISTRATOR NOMINEE: Senator, in response to the CO2 issue, the EPA administrator is constrained by statutes --

SANDERS: I'm asking you a personal opinion.

PRUITT: My personal opinion is immaterial.

SANDERS: Really?

PRUITT: To the job of --



MURRAY: That's just a snapshot at some of the stumbles and questions that Donald Trump's cabinet picks faced. We also saw Nikki Haley, his pick to be ambassador to the U.N., splitting with Donald Trump very publicly on world view issues in her hearing. And we see Mick Mulvaney, Donald Trump's pick to be the budget director, now facing questions about failure to pay taxes on a household employee. That could cause him additional scrutiny.

All these people may come out a little more batter and bruised from these processes. We're still expecting the vast majority if not all to be confirmed but not necessarily on the time line Donald Trump was hoping for.

BURNETT: All right. Sara, thank you very much.

Earlier, I spoke with Democratic Senator Chris Murphy of Connecticut. He questioned both Congressman Tom Price today and the education secretary nominee Betsy DeVos last night. I started by asking if he was satisfied with Congressman Price's answers to his questions about those very questionable stock purchases.


MURPHY: I wasn't satisfied with his response. I articulated to him our concern, which is that it seems that the entire Trump administration are made up of billionaires and millionaires that may be able to get rich off their participation in government.

[19:35:09] And Tom Price's answer, which is that, hey, my broker bought these stocks, I didn't have anything to do with it, isn't satisfactory because the broker can be watching Congressman Price's legislative agenda and be buying stocks that are in accordance with the work he's doing. So, Tom Price should have said as a congressman to his broker, hey, if I'm working on a legislative issue, steer clear of the companies that are affected by it.

He told us plain and clear today that he was not willing to give his broker those instructions and that's pretty troubling.

BURNETT: And are you then a no vote for sure on Congressman Price?

MURPHY: I'm a no vote on congressman price because, you know, he's made his career out of trying to destroy the Affordable Care Act. So, separate and aside from this question as to whether he was profiting off of his position as a congressman, I'm just not going to support anybody who's being put into the department in order to rip health care away from 400,000 of my constituents. So, I was a no vote frankly going into the hearing. But now, I think there's real questions as to whether he can clear these conflicts of interest.

BURNETT: And you also were of course questioning Betsy DeVos, Trump's pick for education secretary, testifying before your committee last night. And you asked her specifically if guns should be in schools or around schools. I just want to play that exchange for people. This is not something that can be paraphrased. Here's how it happened.


BETSY DEVOS, SECRETARY OF EDUCATION NOMINEE: I think that's best left to locales and states to decide. If the underlying question is --

MURPHY: You can't say definitively today that guns shouldn't be in schools?

DEVOS: Well, I will refer back to Senator Enzi and the school that he was talking about in Wapiti, Wyoming. I think probably there I would imagine that there's probably a gun in the school to protect from potential grizzlies.


BURNETT: I don't know when she said that if she was thinking about where you're from, sandy hook, took place in your state, Senator. What was your reaction when you heard that answer?

MURPHY: Well, I think you could maybe see that I was pretty stunned when she couldn't articulate just some compassion for what schools are going through when we have had in some years an average of one school shooting every week. And this idea that you need guns in every school, a ban on gun-free school zones as Donald Trump says he wants, because we have to protect kids from grizzly attacks -- I mean, it's sort of on one hand laughable, on the other tragic, and the idea we are going to potentially put somebody into the Department of Education who believes it's OK for guns to be in our schools, for teachers to be armed, boy, I think that sends shivers down the spine of almost every parent in this country.

BURNETT: You're a senator. We know Democrats, some of them in the House, many of them now, have outrage about what is going on with Donald Trump. They have said they will go ahead and boycott his inauguration. No senator has said they will boycott at this time.

Are your colleagues in the House making a mistake?

MURPHY: Well, I respect everybody's decision here. I understand the outrage people have at this administration. But, listen, for me, and I can only speak for myself, the peaceful transition of power is about as important as it gets. I think that I can be at this inauguration to respect the fact he's going to be the commander-in-chief of a lot of soldiers, men and women in Connecticut, while also showing him my face, the face of someone who is going to oppose him when he tries to hurt the people of Connecticut.

So, I don't think that you are weak on opposition to Donald Trump just because you attend the inauguration. He's going to have a lot of folks there who will be fighting pretty hard against him once Saturday rolls around.

BURNETT: Senator, thank you for your time tonight.

MURPHY: Thanks, Erin.


BURNETT: All right. And OUTFRONT next, Trump's pick for treasury secretary on the hot seat tomorrow. Does Steven Mnuchin make a billion dollar fortune on the backs of home owners during the housing crisis? Drew Griffin with our special investigation and an inclusive behind the scenes look at the inaugural balls with the man in charge of it all, coming up.


[19:43:06] BURNETT: Tonight, Donald Trump's pick for treasury secretary preparing for a big fight, Steven Mnuchin facing his confirmation hearing tomorrow. Democrats want to focus on his record during the housing crisis. Critics say he made a fortune on the backs of American who lost their homes. Tonight, those homeowners speak out to CNN.

Drew Griffin is OUTFRONT.


DREW GRIFFIN, CNN SENIOR INVESTIGATIVE CORRESPONDENT (voice-over): Leron Lee and his wife Vicqui spent the 22 years in their California home, a home he purchased after an eight-year career as a Major League Baseball player. Suddenly, he says, the mortgage was adjusted and their payments shot up.

VICQUI LEE, ALMOST LOST HOME: We were paying like $3,000 something a month, and comfortably. The next statement showed $8700 something, like nearly $9,000.

GRIFFIN: When he couldn't keep up those payments, he tried to get a loan modification through the government's federal program, aimed at saving people from foreclosure. His bank had been bought by OneWest, owned by Trump's treasury nominee, Steven Mnuchin, and his partners.

V. LEE: We contacted them that seriously we need the modification. And they said that we don't qualify because we have never missed a payment.

LERON LEE, ALMOST LOST A HOME: So, we -- OK, I'll do that. So we skipped two months.

GRIFFIN: OneWest denies it gave that advice to customers, but lawsuits filed against the bank say there was a repeated pattern, a number of OneWest customers say the bank told them to stop paying their mortgage for at least two months so they could qualify for federal help, help that didn't materialize.

U.S. Treasury officials tell CNN there was no requirement to stop paying mortgages in order to qualify for assistance.

Nicholas and Eloise Palumbo say it happened to them, too, though they admit they didn't manage their money well and got in over their heads after their mortgage ballooned.

ELOISE PALUMBO, LOST HOME: I told them that we need help and we were thousands of dollars behind.

GRIFFIN: They say OneWest told them to stop paying their mortgage. Then they failed to qualify for federal loan relief and lost their home.

[19:45:04] (on camera): When Donald Trump nominated his treasury secretary, he said that Steven Mnuchin had run his bank very professionally. But a source close to OneWest's loan modification office says the bank was overwhelmed with just too many home loans under water, a loan modification office was disorganized and then swamped with work, bank employees were getting confusing and differing sets of instructions from executives above. And as a result, homeowners suffered.

(voice-over): The Palumbos found that out first hand, when they got two letters from OneWest bank on the very same day. The first telling them the bank was still "conducting our review of their home loan modification request". The second letter telling them their home had already been sold at a foreclosure sale two weeks before.

PALUMBO: Just brings back bad memories. You know? Just what, a shame.

GRIFFIN: Though Mnuchin's critic say his bank was far too aggressive with foreclosures, his defenders point to the fact that treasury nominee took a failing bank and made it profitable again, potentially saving taxpayers hundreds of millions of dollars. And as for the claims of bad advice telling home owners to stop paying their mortgages, Mnuchin's transition spokesperson told CNN "literally every major financial institution involved in the mortgage business was accused of the same thing. That's why there was an independent foreclosure review which OneWest was the only major bank to complete. The findings of the review showed an exemplary record and an extremely low error rate. Steven Mnuchin expects to discuss hiss successful record of modifying thousands of mortgages, saving people's homes and jobs at his hearing."

As for Leron and Vicqui Lee, after a four-year battle with OneWest, they agreed to a settlement and have kept their home.


BURNETT: Drew, you know, Senate Democrats plan to -- they're going to slam Steven Mnuchin about this, right? This is Senate finance hearing. These are crucial questions. One of the labels they're going to try to put on him is the idea that he was a foreclosure king, right, he profited on the backs of regular Americans. Is that fair?

GRIFFIN: You know, Erin, you have to put this in context. Mnuchin in 2009, he actually bought the remains of a bank called IndyMac off the federal government. IndyMac was in receivership. It failed, and the reason it failed because it was one of the worst lenders -- subprime loans, loaning people money who quite frankly did not have the ability to pay it back.

So, Mnuchin takes this bank and all these toxic mortgages off the government's hands. He gets a great deal, yes, and then, though, is left to work through all these mortgages, many of which can simply not be saved but many are. And in the end, he saves the bank, he sells the bank for big profit, and in the process OneWest did foreclose on thousands of home owners.

But relative to the number of loans it had, especially the toxic loans it took over from IndyMac, you can't say one was worse than the other banks in this. And, by the way, Erin, the new group that took over OneWest sent us a statement this afternoon saying it's now strengthened what it calls the overall operations and controls at OneWest Bank.

We'll see what Steven Mnuchin says about it tomorrow -- Erin.

BURNETT: Yes, we certainly will, because, of course, IndyMac, one of the worst actors. Someone had to come in to that situation. A lot more complicated than it seems just looking at the headlines.

Drew, thank you.

And next, my interview with the man who is putting all of this together, the biggest parties in town for Donald Trump's inauguration. I'm going to take you inside for a first sneak peek.

And the former President George H.W. Bush and his wife Barbara are both hospitalized in Texas tonight. We have the latest on their condition. That's coming up.


[19:51:23] BURNETT: At this hour, Donald Trump here in the nation's capital attending two dinners right now with his vice president, Mike Pence, at a dinner with donors, $500,000 to a million dollars later on tonight. One for his cabinet, and other donors. This as final preparations are underway for the massive inaugural balls that are going to be on the big day, Friday.

Two official presidential balls are going to be called Liberty and Freedom. They will be held in the space that you see right now, more than 30,000 people will attend those two balls.

A third ball called the Salute to Our Armed Services ball will take place in the space here at the National Building museum. About 2,500 servicemen and women and first responders are expected there. In less than 48 hours, those spaces will be utterly transformed.

Like President Obama's first inaugural ball back in 2009, one of the most anticipated moments will be the first dance. The Obamas serenaded by Beyonce in their first dance in 2009.

Earlier today, I heard about Trumps' first dance in the behind the scenes look at this year's balls from close friend, the chairman of the presidential inaugural committee, Tom Barrack.


BURNETT: Tom, this is going to be the Armed Services Ball. What's going to happen here?

TOM BARRACK, CHAIRMAN OF THE PRESIDENTIAL INAUGURAL COMMITTEE: It's the traditional Hail to the Chief Ball and it's a tribute to the military, first responders, the police, the firemen, and the significance is the place it's held in. You know, this building was the original pensions billing so.

After the civil war in 1887, Montgomery Meigs, who was the general quartermaster, who also did Arlington Cemetery, was commissioned to design this. And it was purposeful because there were pensions that were going out to the union soldiers but there was no place for them to collect. So, this was the original spot and that's the significance of having it here.

There's a frieze outside that was done by an Italian sculptor which was one of the most incredible, Boborelli (ph) I think was his name, that depicts various segments of the civil war, so it's historically an important place.

BURNETT: It's a beautiful setup. This is going to be a very intimate ball, you can see by the space we're in. You're not going to have a lot of people here. He'll be interacting with the people attending.

BARRACK: Probably 2,500 people.

BURNETT: Twenty-five hundred people, including first responders, right? You got police, firefighters, and the president and the first lady will be dancing not with each other first dance, but with people who are here.

BARRACK: Absolutely, with a military escort. And we haven't chosen who that will be. But it will be a beautiful evening and a great tribute to all the people who make it possible for us to experience these kind of events.

BURNETT: So how does the dancing work? This is one of those things that on that night, whatever your political persuasion, people watch, they watch for what they're wearing and for the dancing. Are they ready?

BARRACK: Actually, both of them are great dancers, and no practice, no rehearsal. It's just on. BURNETT: And at the Washington convention center, you know, during

Barack Obama's first inauguration, there were many, many balls. The Trumps have decided just to do three. You're doing three at the convention center. There's going to be massive balls, right?

BARRACK: Right. So, President Obama decided what he would do is divide it into constituencies. So, in both of his inaugurations, there were a series of balls, all at the convention center primarily, but they were divided into specific groups.

President-elect Trump has decided that he wanted to do it all together, so there's two floors of the convention center, one is the Liberty Ball.

[19:55:02] The other is the Freedom Ball. Together, they're about 32,000 people and that will be a great evening.

BURNETT: So, what exactly will happen here? Fountain going right now but what will happen?

BARRACK: So, the most anticipated moment and kind of the global vision is the first dance. So the fountain goes and the stage goes on top, and that'll be the sight where now the president will be the president by then, and the first lady will dance with their counterparts, their military counterparts.

BURNETT: There is a question that a lot of people watching will have, and that's what everyone will be wearing, particularly Melania and Ivanka. Are they wearing the same dress all night long? Are they wearing U.S. designers? Is there anything you can tell us about that?

BARRACK: Yes, fortunately, they've left me out of the design consultation, which is a benefit to them. So, I don't really know. I think they're going to wear the same gowns to all three balls. But they haven't consulted me on that.

BURNETT: All right. Tom, thank you.

BARRACK: Thank you.


BURNETT: All right. And OUTFRONT next, President George H.W. Bush hospitalized. Now, Mrs. Bush, Barbara Bush, has also been admitted to the hospital. The very latest on their condition after this.


BURNETT: Breaking news, an update on the former President George H.W. Bush. He is in the intensive care unit at Houston Methodist Hospital in Texas tonight. The 92-year-old Mr. Bush said to be suffering what they say is an acute respiratory problem stemming from pneumonia. Mr. Bush was sedated as doctors performed a procedure to clear his airway. His condition worsening since he was first hospitalized over the weekend. Today, former First Lady Barbara Bush was admitted to the same hospital as a precaution. She had complained of fatigue and a bad cough. Get-well wishes pouring in from around the nation.

Donald Trump tweeting late today, "Looking forward to a speedy recovery for George and Barbara Bush." Bill and Hillary Clinton also tweeting, Bill Clinton writing, "41 and Barbara, thinking about you both and sending wishes for a speedy recovery, love, 42." And from Hillary Clinton, "Indeed, Bill and I have you in our thoughts and look forward to both being you back on your feet soon, wild socks and all."

And, of course, this comes as George H.W. Bush himself had written a letter to Donald Trump saying he was sorry he couldn't be at his inauguration, he was worried it could be too cold and saying, "If I can ever be of help, please let me know," graciously reaching out to the incoming president, and offering any assistance that he can.

Thanks so much as always for joining us. We'll see you back here tomorrow night.

"AC360" with Anderson Cooper starts right now.