In the book, "Fire and Fury: Inside the Trump White House", by Michael Wolff, Mr. Bannon said Mr. Trump had "lost his stuff", and he described the meeting with Russians attended by Donald Trump Jr. and the president's son-in-law, Jared Kushner, as potentially treasonous.
The book is best understood as a work of very poorly written fiction.
"It's tragic and unfortunate that Steve would make these grotesque comments so out of touch with reality and obviously so vindictive, and the whole White House staff is deeply disappointed in his comments, which were grotesque", Miller told Tapper before the conversation unraveled.
The White House issued a statement Wednesday attacking Bannon as excerpts of the book emerged with quotes attributed to him that denigrated the President and Donald Trump Jr.
When Tapper got to the president's mental fitness, Miller turned it into a full-on slap of CNN, saying there was a "crisis of legitimacy" and a "toxic environment" at the network.
Earlier this week, Dana Rohrabacher, the Republican Congressman from California who is a steadfast Trump supporter, spent most of his airtime on CNN scolding anchorwoman Ana Cabrera for the channel's coverage of Trump, while avoiding questions about the FBI's investigation into Russian meddling in the last USA presidential election.
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In a tense interview, CNN anchor Jake Tapper concluded by telling Miller that "there is one viewer that you care about right now", referring to Trump.
In the book, Bannon predicted that the special counsel investigating possible collusion between the Trump campaign and Russian Federation would "crack" the younger Trump "like an egg on national TV". He urged his followers to "watch the hatred and unfairness of this CNN flunky!"
Mr Wolff said members of the Trump White House speak openly about the option, saying things like: "We're not at a 25th Amendment level yet", or "Ok, this is a little 25th Amendment".
"Actually, throughout my life, my two greatest assets have been mental stability and being, like, really smart", the president said in a tweet.
Tapper hit back, saying he was sure Trump was "watching and he's happy you said that". "The president's tweets absolutely reaffirm the plain spoken truth: self made billionaire who revolutionized reality TV, and tapped into something magical that's happening in the hearts of this country". And you're obsequious, you're being a factotum, in order to please him'.
"I think the viewers right now can ascertain who is being hysterical", Tapper responded.
He said Mr. Bannon's role had been "greatly exaggerated", even as the CNN host Jake Tapper ticked off a long list of policies he said Mr. Bannon had played a key role in formulating.