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CNBC DIGITAL VIDEO: SENATOR MARK WARNER SITS DOWN WITH CNBC EDITOR AT LARGE JOHN HARWOOD

WHEN: Tuesday, December 19th

WHERE: CNBC.com's Speakeasy with John Harwood

Before Barack Obama emerged as a strong national candidate, some Democrats wanted Mark Warner to run for president in 2008. He was a successful business executive who became a successful governor of Virginia — then a state that Warner's party hadn't captured for 40 years. He instead ran for the U.S. Senate that year, and won. After earning a moderate reputation, if not many national headlines, Warner has returned to the spotlight a decade later. With his Republican Senate colleague Richard Burr of North Carolina, he leads the Intelligence Committee's investigation of Russian interference in the 2016 election that, alongside special prosecutor Robert Mueller's probe, has unsettled the Trump White House. If he successfully concludes that assignment — in the eyes of Democratic voters at least — it could even revive his presidential prospects. Warner, 63, sat down over breakfast near his home in Alexandria, Virginia, to discuss President Donald Trump, the Russia investigation, the pending GOP tax bill and Oval Office dreams. A partial transcript from Speakeasy with John Harwood featuring Senator Mark Warner follows.

All references must be sourced to CNBC.com.

CNBC's John Harwood: Describe what you're seeing in the Oval Office from Donald Trump right now.

Sen. Mark Warner: In Donald Trump, I see someone who I don't think was prepared for the office emotionally or obviously on an issue basis. I think he kind of – I'm not sure he actually expected to win himself. And unfortunately, I think we're seeing in so many ways that lack of preparation, and candidly, the lack of seriousness. You get no sense from Mr. Trump that he is at all awed by the responsibilities of the office or, in that matter, respectful of the responsibilities of the office. And I think unfortunately, in many ways, our country's paid the price of that.

Harwood: Does it scare you?

Warner: I'm worried about someone who is commander in chief who does not seem to acknowledge or listen to advisors who, I think, bring more facts to the table. I'm concerned about a commander in chief who seems to undermine diplomacy writ large, and then his actual Secretary of State is, when he's deployed, for example, on a mission to China vis-a-vis North Korea. I'm concerned by a president who seems to lack the empathy that part of his job whether he likes it or not, is at moments of crisis to try to bring the nation together, rather than the kind of, what I thought was one of the low days of his presidency the outrageous comments he made, for example, after the tragedy in my state, in Charlottesville. I don't think he gets the notion that this job is not a reality TV show where he's supposed to pummel whoever is the opposition of the day, but instead where he's supposed to serve the country as a uniter, serve the country as a leader, serve the country in many ways as a comforter in chief during moments of tragedy.

Harwood: How do you evaluate the way your colleagues have reacted to Donald Trump?

Warner: What I fear for my Republican colleagues is that history is not going to judge them well, in this moment where this president has done such outrageous things, that they haven't been more willing to call him out. Now, we do see friends of mine like Bob Corker and Jeff Flake and others, but it seems to be the ones who are quitting who are still willing to call him out. I wish that they would – they won and they get to run the government. That's the way our system works. But I think they could be running the government but at the same time distancing themselves from some of the more outrageous comments made by this president, comments that frankly are undermining our standing in the world.

Harwood: How do you think they feel about it?

Warner: I hear lots and lots of private comments, eye rolling, concern. I think they, at first, were able to kind of, you know, slough it off a bit. But then when the tweeting continues, when the kind of name-calling with other foreign leaders, not just Kim Jong Un but other leaders around the world who we might have a disagreement with – you know, I think he's called out virtually every foreign leader in the world, with the exception, of course, of Vladimir Putin, which again raises a whole other set of issues. I wish that private consternation was more vocal, because at the end of the day I think it would reinforce to broad swaths of the country who are deeply disappointed with this president.

Harwood: In terms of what we've seen from the last two elections — Alabama a few days ago, your home state of Virginia before that — what conclusions do you draw about how the country is reacting to the political moment that we're in?

Warner: Again, I'd love to claim it was a sudden resurgence of Democrats. I'm not sure that's necessarily the case. I think it's frankly disgust with the kind of tone and tenor that comes out of this White House. You know, whether it is his — you name the group — who the president has not offended or made inappropriate comments about. From his travel ban to the comments equating Nazis, racists and anti-Semites with folks in Charlottesville who were there to say, "Hey, we're not that kind of community," to the litany of tweets where anyone that he disagrees with he calls out in usually the most kind of schoolyard, childish tone. This is not what people expect from our president. And it doesn't matter Democrat or Republican and I think people are saying, "Enough already." Even folks who supported Mr. Trump because they knew he was going to shake things up – I think their patience has run thin.

Harwood: Thirty years after you told your parents you were going to see the White House from the inside, have you given up that dream? Does that still exist in your mind?

Warner: Where I think I can add the most value in this kind of political struggle right now is, 1) to get this investigation done right, get it done in a bipartisan fashion and, 2) where I really hope, and where I thought I was going to be spending most of my 2017 – I didn't expect to be in the spy business – is that I think frankly, both political parties are basically arguing about 20th century issues with a backwards look. I think the whole nature of our economy is fundamentally changing. The nature of work is changing. I'd like to be out articulating some ideas about, how do we create a new social contract that would have portable benefits? How do we take a tax reform effort that would actually focus on investing in human capital?

Harwood: That sounds to me like a yes. That it is still alive.

Warner: No, it would be a willingness to try to lay out an agenda frankly that maybe somebody else could pick up. I don't get up every morning by any means with the kind of fire in the belly that I might have had a decade ago. I do feel like I've had some frustrations with this job in the past where I felt like I wasn't in the room. I do feel like now that I've kind of earned a spot where, hopefully, I at least get a little bit listened to with friends on both sides of the aisle. And boy oh boy, getting this Russian investigation right — if I can get this right and do it in a bipartisan way, that'll be a good piece of work.

WEB EXTRAS:

WARNER ON TAX BILL

Video: https://www.cnbc.com/video/2017/12/19/business-minded-democrat-calls-tax-bill-the-worst-legislation.html

CNBC's John Harwood: You're a business guy with a centrist reputation. Is this tax bill that your Republican colleagues are all-in on, is this going to be a big boost to economic growth?

Sen. Mark Warner: It will not only be not a boost, but I believe it's the single worst piece of legislation that I've seen since I've been in the Senate. And let me tell you why. This whole bill was cooked up in secret. Folks like me who spent years being interested in this subject were not invited into the room. And because it's been done in secret, I believe tax lawyers and accountants will spend a decade finding some of the loopholes and problems, particularly in the pass-through area and in some of the corporate tax reform. I believe as someone who did support the basic premise – that we need to bring and make our corporate tax rates more competitive with the rest of the world and that we needed to find ways to bring back some of those profits that have been caught offshore – I believe because they didn't have the test of time and the test of public review, I think they messed up some of that. For example, they've allowed companies to still place their intellectual property in a low-tax or no-tax haven, build their factory in a country like Germany, average their tax across the two, and end up potentially not paying any American taxes at all. I believe as well that history has shown and Alan Greenspan is not someone I always cite, but Chairman Greenspan has shown that if you have close to a full-economy, where we have right now with virtually full employment, and you do a massive tax cut with all borrowed money, you don't see any of the growth projections they've called upon. And it's why economists from left to right have said, "We're not going to see the growth numbers that the Republicans themselves have cooked up." So what we're seeing now is a nation where we've already built up $20 trillion in debt – and that's has been built up by both political parties over the last 70 years. Again, both sides bear some burden. But now on top of that, you add another $2 trillion plus. If interest rates simply go up 1 percent, you're going to see $160 billion a year of additional debt payments right off the top before we pay for a dime in the military or a dollar of Social Security. For every tax dollar you send to Washington, only about seven cents is spent on education, infrastructure and research and development. Now I've been a business guy longer than I've been a politician. Any business that spends 7 percent of its revenues on its workforce, plant and equipment and staying ahead of the competition, which for a government is education, infrastructure and R&D, that is not a business plan that I'd invest in.

Harwood: I noticed that you, like other Democrats, have used on Twitter, the moniker "tax scam" for this bill. Independent analysis has echoed a lot of the criticism that you've talked about. Since your Republican colleagues are friends of yours, why are they doing it? Do they sincerely believe in this bill? Or are there other reasons for it?

Warner: I think there are a number that believe, as kind of an article of faith, that tax cuts will provide growth if you bring more profits to a business. And I believe they would be right if this was a period of high unemployment. I think history has shown: high unemployment, you give a tax cut, you get a burst. What I find so disheartening is, we're looking at the last five or six quarters at record-high corporate tax profits. We've not seen that translate into investments in American factories or American workers.

Harwood: But just to go back, fundamentally you think they believe in this bill. You don't think it's for donors or for partisan gain.

Warner: I think there is a mix. There is a rush to get this done before Christmas, purely driven by a Trump request. I think many of them know that if they had built this on a bipartisan basis, if they'd allowed a little more time and a little more sunshine into the process, they would have a better product. For example, one of the things that would've made this much more palatable to me was if these companies are going to bring back their profits they generated in foreign countries at extraordinary low rates and the range is between 7 and 14 percent, why not say, "Fine, company. Bring it back. But part of the price of bringing it back at that low rate is, you've got to put in place a meaningful training program, not for everybody but for everybody in your company that makes less than $80,000 a year." Because the one thing we know in a 21st century economy is, no matter how skilled you are, you're going to have to continue to upgrade your skills because no job is going last for 30 years the way my dad worked for the same company for 30 years. Unless you upskill, you're going be left behind.

Harwood: You talked about the rush to do this at Trump's request before Christmas. As you recall, after Scott Brown was elected in 2010, your colleague Jim Webb stood up and said, "Stop health care until Scott Brown becomes a senator." Do you have any reason to expect that any of your Republican colleagues now or Mitch McConnell, the leader who echoed those same calls then, are going to stand up and do that?

Warner: Alabama ought to have their newly elected representative, Doug Jones, weigh in on this tax policy that's going to affect the country for the next decade.

Harwood: But you don't think anybody's going to do that.

Warner: Listen, I'm not holding my breath. But nobody would love to be more surprised than to see Leader McConnell say, "Hey, we're going to take a timeout, let this bill have a little more public exposure, wait for Mr. Jones to be seated and then build on this legislation."

Harwood: Do you think Chuck Schumer would do precisely the same thing that McConnell's doing if their roles were reversed?

Warner: I would hope he would do something different. I would hope that I would have also the courage to call him out. I try not to get overwrought sometimes, because I do wonder if the shoe was on the other foot. I do know this – I spent a lot of years, for example, back on these budget issues taking on my own party around entitlement reform, around the need for additional revenues. None of these that were items that were very popular, but that were items where I'd reached a conclusion, just plain as a business guy looking at our country's balance sheet, realizing that business as usual when we're generating $500, $600, $700-billion a year in annual deficits is not and cannot be sustainable. And I was willing to take that on. I do wish more members would. I was concerned that many of my Republican colleagues, who were with me in the trenches when Obama was president and we were trying to fight on debt and deficit, were absent when this most recent battle took place.

WARNER ON RUSSIAN INTERFERENCE

Video: https://www.cnbc.com/video/2017/12/19/democratic-leader-of-trump-russia-probe-sees-more-than-smoke-now.html

CNBC's John Harwood: You are leading, with Sen. Burr of North Carolina, the intelligence investigation into Russian interference. Some people look at your probe as an oasis where you have two guys who are in fact working across party lines in a cooperative way to pursue this investigation. Is that cooperation living up to the hype?

Sen. Mark Warner: Listen, there's always going to be pressure. There's pressure on me from a number of Democrats who presume the president is guilty and, you know, "Let's just get to that." There's pressure on Richard Burr from Republicans who say, "there's nothing here, just get rid of this investigation." What we both committed to is we're going to follow the facts wherever it leads.

Harwood: Do you think he is withstanding the pressure?

Warner: Yes, I think he is withstanding the pressure. Do we agree on everything? Absolutely not. But I think we're a year into this, we've got a number of additional witnesses that we need to see. And I think that we have on many of the issues, broad bipartisan consensus. We have absolute consensus – the consensus that was already reached by all of the leaders of the intelligence community, that Russia massively intervened in our elections in a way to try to help Trump and hurt Clinton. We have complete agreement that Russia tried to intervene in 21 of our states' electoral systems. And we hope to have recommendations early next year so that our systems can be better protected. My business was in the tech field, and I'm a big supporter of tech companies. You look at the Googles, the Facebooks, the Twitters that are great iconic American companies. But they have created, within this kind of social media ecosystem, there's a dark underbelly. I think we've shown that underbelly. And through a little nudging and public exposure, the companies are starting to change their practices. The big question, which is we do know there's never been a campaign in modern American history that has had this much contact with a foreign power both before the election and in the immediate aftermath. We do know the Russians were proffering, you know, dirt on Clinton. What exactly was the reaction from the Trump campaign and campaign officials? I'm still reserving judgment until we see all of the principal figures in front of the committee members themselves.

Harwood: Donald Trump Jr. spent hours before your staff. Do you and Sen. Burr agree that you members should also interview Donald Trump Jr. and that it should be in public?

Warner: We're going to have to work through the venue. That's part of our discussion.

Harwood: So no consensus on it.

Warner: The chairman and I will work through that. But what we do agree on is that the vast majority of members of the committee, Democrat and Republican alike, before they put their names on a final report, they're going to want to have a chance to talk to the principal figures whether it's Donald Trump Jr., Jared Kushner, Mr. Cohen, who's one of the Trump's primary lawyers. You know, I'm not going to put my name on a report where I have not had a chance to look these individuals in the eye and ask them questions.

Harwood: What about the president?

Warner: On the president, I think there needs to be more nexus established. We'll see where special prosecutor Mueller's investigation leads.

Harwood: Are you highly confident that you'll end up with a unified single report?

Warner: I'm highly confident that on issues around electoral interference, around the tactics the Russians used in terms of helping one candidate and hurting the other, around the question of how social media was used and abused, that there will be broad bipartisan consensus. I think we'll also agree that there was a huge amount of contact between the Russians and officials from the Trump Organization and campaign. The nature of that contact and what may or may not have been exchanged, I think the jury is still out.

Harwood: You've said in the past that on this issue of collusion, you've seen smoke but not fire. Is that still the case?

Warner: I think more and more of this picture's coming into view. I think some of the comments that I made literally months ago, I would amend those comments in terms of where we stand today.

Harwood: You've seen fire?

Warner: I'm not going to jump to any of those final conclusions until we go through this whole process. But I've been absolutely amazed at the number and extent of the contacts and the fact that it feels like almost every week or two, we find a new line of inquiry. And, what is clearly the case, in the case of Gen. Flynn, the fact that he settled on pleading guilty to only one account says to me that probably Gen. Flynn has got a lot more of the story to tell. And since Gen. Flynn was intimately involved in the campaign and obviously one of the major contacts with the Russians throughout the transition, I think he's got very, very important facts to shed on this case.

Harwood: Do you believe the president knew he was reaching out to Ambassador Kislyak in December about sanctions?

Warner: I don't know. I do know that the president who has been obsessed about this investigation, the president who continues to call it "fake news" even though every one of his intelligence officials acknowledges this, even though every foreign leader acknowledges because we've seen similar Russian tactics take place in France, in the Netherlands. We're seeing the first in effect shots fired in the way 21st century warfare is going to be carried out.

Harwood: Now, there are some people who have looked at how the president's responded and not accepted some of the intelligence. They say, "Well, that's about ego. That's about not wanting to accept facts that would seem to call into question the legitimacy of his election victory." Is that what you think it is? Or do you think that it is something else?

Warner: John, I don't know. For someone who claims as he does that "There's no there there" – if there is no there there, then he ought to be much more collaborative on trying to get this investigation behind him. Instead, we have these constant actions including firing — you can't make some of this stuff up — firing the FBI director and then bragging about it to the Russian foreign minister where he calls America's senior law enforcement official "a nut job" and says, "This is going to take the pressure off of the so-called Russia thing." When he is out on a regular basis criticizing Bob Mueller. Again, let's step back for a moment. We have an FBI director who was appointed by this president, who has been a longtime contributor to Republican candidates. We have a deputy attorney general, Rod Rosenstein, who is a well-known Republican, senior official at the Justice Department. We had Jim Comey who was a known Republican for his whole time as FBI director. And we have Bob Mueller, who beyond being a well-respected law enforcement official and Vietnam vet, was appointed by Republicans as head of the FBI. So the whole leadership of the FBI and this investigation are all people with impeccable Republican credentials. Yet, this president is still disdainful of all of them. And I think any American, and even somebody like myself who wants to give him the benefit of the doubt says, you know, "This seems a little weird. This is a little screwy."

WARNER ON RUSSIA INVESTIGATION AND MUELLER

Video: https://www.cnbc.com/video/2017/12/19/if-trump-fires-mueller-political-disaster-and-constitutional-crisis.html

CNBC's John Harwood: We all remember Donald Trump Jr. at one point said, "a disproportionate share of our assets come from Russians." The president's had a long history of interaction with Deutsche Bank and some people have wondered about the nature of those interactions with respect to Russia. How relevant are those facts to this picture?

Sen. Mark Warner: Those are not areas where the congressional inquiry has spent a lot of time, because we've not established enough of a nexus. I believe and hope that Bob Mueller is looking into this. Because we've –

Harwood: Do you think they are relevant?

Warner: I think they're relevant for the following reasons. One, if we go back to what generated a lot of the smoke in the first place, the dossier. I don't believe that a lot of the dossier has been disproven. It would be so frightening if any parts of it are true. And so much of that dossier was built on the premise of these kind of financial ties. Secondarily, we have heard a host of rumors. And rumors often-times coming from the press of the president's activities, because he wasn't able to be banked by many of the American banks, so banking through Deutsche Bank, and that there were Russian dollars that were in some mirror trading and helping to back some of those Deutsche Bank loans. Just from a plain counterintelligence standpoint, that would set off a lot of alarm bells because of the fear of potentially being compromised or having undue influence. So for the president's own sake — assuming that there's no there there — I would hope that Mueller or others would expose this. Because if it's not true, we need to remove the cloud hanging over the president.

Harwood: Do you think that your inquiry and Mueller's, in a time sense, are moving on parallel tracks?

Warner: Well, I think we've actually interviewed more individuals than prosecutor Mueller. He's been pretty good about keeping things close to his vest. And he obviously has tools that we don't have. But the fact that he has already elicited two guilty pleas, one from Mr. Papadopoulos, one from General Flynn, and he's gotten two indictments, of the president's campaign manager and deputy campaign manager, particularly vis-à-vis Gen. Flynn, I believe he'll have many more stories to tell. I hope he moves with all due deliberate speed. We want to move with all due deliberate speed as well, but I think it's more important that we get this right.

Harwood: Do you think a year from now, both of you guys will be done?

Warner: Yes.

Harwood: You mentioned the president's criticism of some of those Republican appointed law enforcement officials. We're also seeing a drumbeat of criticism of the FBI, of Bob Mueller from conservative media. Do you think a predicate is being laid for Bob Mueller to be fired? And if so, how would your Republican colleagues react to that?

Warner: John, I hope and pray that's not the case. When Bob Mueller was appointed, he was greeted with universal acclaim. I think it's not fair. I think it's not right. I think it's frankly cheap shots when some of these Republican colleagues would question Mueller's integrity. And if you were to see a firing, I think you would see a constitutional crisis.

Harwood: Is this whole thing going to end up in a constitutional crisis one way or the other?

Warner: John, I think that is going to be up to what this president does or doesn't do. I mean, if this president allows this investigation to come to its conclusion and either bring charges or not, then I think the system will have worked as our founders set up. If they pull on one of these threads as a reason to fire Mueller, I think it will be a political disaster for the president, and I believe it will be a constitutional crisis.

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