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U.S. Government Hours Away From Shutdown; Trump Will Not Go to Florida Until Bill is Passed; WSJ: Trump Lawyer Used Private Company Pseudonyms To Pay Porn Star "Stormy Daniels" Aired 9-9:30a ET

Aired January 19, 2018 - 09:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[09:00:05] POPPY HARLOW, CNN ANCHOR: Good Friday morning, everyone. I'm Poppy Harlow.

JOHN BERMAN, CNN ANCHOR: And I'm John Berman. So if the president is canceling a trip to Florida, it must be serious. Moments ago the White House announced the president will not leave for Mar-a-Lago unless a bill to keep the government running is passed. They might have to live for a while without some vitamin D. A

Republican congressional insider tells CNN this is going to get worse before it gets better. With less than 15 hours to go now on the official countdown clock, there is a full-scale standoff in the Senate.

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL (R), MAJORITY LEADER: My colleagues, where is the urgency here? The reason we're here right now is our friends on the other side say solve this illegal immigration problem right now or we're going to shut the government down.

SEN. DICK DURBIN (D), ILLINOIS: There is an urgency. There's an urgency in their lives because of the uncertainty of tomorrow. Whether tomorrow will mean deportation for themselves and their families. Yes, there's a real urgency.

SEN. JOHN CORNYN (R), TEXAS: I find it rather disingenuous to say that we're against this short-term continuing resolution because we want another short-term continuing resolution.

SEN. CHARLES SCHUMER (D), MINORITY LEADER: This resolution kicks the can down the road. There is no promise and no likelihood that another kicking of the can down the road will get something done. We have to sit down together and solve this.

(END VIDEO CLIP)

BERMAN: Just a small sampling of the lack of love between Republicans and Democrats right now. Democrats refusing a stopgap extension of government funding unless it provides protections for Dreamers. And Republicans refusing to give that protection right now.

HARLOW: So what will happen today? For what it's worth, the last time the government shut down back not that long ago, fall of 2013, a prominent voice said essentially so what? Quote, "Here's the truth," wrote Donald Trump. "The government doesn't shut down, all essential services continue. Don't believe the lies."

Well, now President Trump says a shutdown would be, quote, "devastating to our military," accuses Democrats of demanding, quote, "illegal immigration and weak borders." He's said to be working the phones non-stop with the one-year anniversary of his presidency tomorrow, not something he wants to mark that with a shutdown.

Our Ryan Nobles is on Capitol Hill. So how are things looking this morning?

RYAN NOBLES, CNN WASHINGTON CORRESPONDENT: Not very good, John and Poppy. Frankly you say -- you showed the evidence there that the president considering canceling his trip to Mar-a-Lago as evidence that they are not really that close to come up with a deal.

And some more reporting just in from our Manu Raju who said that both -- with the two most important people in this conversation, Senate majority leader Mitch McConnell and Senate minority leader Chuck Schumer have not spoke since being on the floor last night where they had some pretty choice words for each other about this debate.

And here's how things will shake out today. At 10:00 most of the members of the Senate will be here on Capitol Hill. That's when they'll separate and go into separate rooms and have closed door meetings to talk about the state of play. Then at 11:00, they will gavel and to begin session. That means at that point they only have 13 hours to come up with a deal.

Now at some point there'll be a vote on cloture. No one believes that that vote will pass, but it is a necessary step to get to some sort of resolution, and then if nothing else -- if there's no deal struck at 12:01 Saturday morning, that means the government will shut down.

And we should point out that the negotiations have really stalled. There are really no conversations between either side. And it is clear that there are not the 60 votes necessary to pass the House version of this continuing resolution. So that means if a deal is hatched, it will be a completely new bill passed by the Senate that will then have to go back to the House in order to get through and keep the government open.

So the chances of the government not being shut down tonight continue to fade in the distance, as we see the speaker of the House walking right behind us -- John and Poppy.

BERMAN: Urgently, walking with pace right there.

HARLOW: And past the reporters.

BERMAN: Right. The word is it's going to get worse before it gets better. It's awful now. So that's a pretty ominous sign right there.

Who are the senators you're looking at right now? Who are the key votes, Ryan? NOBLES: Well, they're both Republicans and Democrats are involved in

this, John and Poppy. And it's important to point out while they need at least 10 Democratic votes there, the number increases when you take some Republicans into the mix. And let's take a look at this, first you've got Lindsey Graham and Rand Paul, Republicans who have both said that they're not voting for this continuing resolution for different reasons. But then you do have some yes votes that were a bit of a surprise.

Mike Rounds who initially said he wasn't going to vote for it believes that now there's going to be protections put in there for the military. He is now a yes vote. And Joe Manchin is an interesting vote in this entire process. He's a Democrat from West Virginia in a Trump-friendly state up for re-election. He's not the only one in that position. That's Mitch McConnell's hope, that he can pull more people like Mitch -- like Joe Manchin over to his side to try and get this bill over the finish line.

At this point, though, John and Poppy, Joe Manchin is the only Democrat who has said he will vote yes which is one of the reasons that a shutdown is looking increasingly likely.

HARLOW: Wow.

[09:05:05] BERMAN: All right. Ryan Nobles, we'll let you run down, the speaker of the House right now behind you. Off you go. We'll talk to you again soon.

We're getting new information meanwhile about how the White House feels about all of this. Abby Phillip is there for us this morning.

Abby, what are you hearing?

ABBY PHILLIP, CNN WHITE HOUSE CORRESPONDENT: Hi. Good morning. Well, this shutdown threat is really scuttling the president's plans to go down to Florida. And a White House official told Jeff Zeleny -- CNN's Jeff Zeleny this hour that the optics, they recognize that the optics of this would be absolutely terrible and that he really can't go if the government shuts down.

So here we are a few hours away from that very prospect and the White House still thinks that they can get a deal by -- even if it comes at midnight. They think Democrats have shown some signs that what they really want is to keep the government funded by proposing this short- term bill. And that's a sign at least to one senior administration official I talked to this morning that they can get something done before that deadline.

At the same time we're hearing that the president last night was working the phones as was White House Chief of Staff John Kelly, also some senior aides, the legislative director Marc Short, director of Office of Management and Budget, Mick Mulvaney, they're heading to the Hill today to work this issue.

But the question is what is going -- what is it going to take to get Democrats and Republicans on board? There are still no answers even from the White House here despite the optimism about what it will take to get a deal through at this late hour -- John and Poppy.

HARLOW: Abby Phillip, thank you very much.

As John said, the president is going to wait for his vitamin D in Florida until they can get something done.

Here with us is our panel, Errol Louis, our political commentator, Salena Zito, our contributor, and Molly Ball, CNN political analyst.

Nice to have you all here. The word from Phil Mattingly, from a Republican aide, it's going to get worse before it gets better. I don't know how much worse -- well, the shutdown would be the worst but how much worse is it going to get before that?

What happens here, Salena? I mean, who do you think blinks at this point? Because you look at the polling and there's risk equally spread for Democrats and Republicans in this one.

SALENA ZITO, CNN CONTRIBUTOR: Yes. Absolutely. I think that both parties face a problem. I don't know how permanent that problem is. I mean, on the one hand, the Republicans have all the power. They have the presidency, they have the majority in the House and the Senate. So you can argue that they're going to face the biggest problem.

But then also, the Democrats have run as the party of the resistance. So you know they could also face a problem. I think -- I think most Americans are looking at this and saying there they go again.

HARLOW: Right.

ZITO: Right? And you look at the approval rating of Congress which is like, what, 17 percentage points?

HARLOW: Yes.

ZITO: And it's not like people have an expectation that they're going to get any better. And at 17 percent, which is a number that Congress has held for a decade, right? They still have, like, an 80 percent to 90 percent retention rate when elections come up. So I don't know who is the biggest loser here. Honestly, I just think it's the establishment, period, in both parties.

HARLOW: Yes.

BERMAN: Look, I can tell you because I've been hearing from Republicans, you know, all night and all morning, they feel better about this now.

HARLOW: Why?

BERMAN: They like what their positioning is now. They think the framing of this by saying that Democrats are choosing the Dreamers, choosing people brought here illegally over the CHIP kids.

HARLOW: Yes. BERMAN: Over the military -- and again, there's flaws with that

argument. They feel like they positioned this as well as they can.

HARLOW: It plays well.

BERMAN: We'll see. The other way to look at this, though, is through what Salena was saying right there is this is just a big mess, and when it's a big mess, who do you blame? Typically you blame the person on top.

Jennifer Ruben, no fan of the president writes this morning.

HARLOW: Yes.

BERMAN: You know, about the president, "If he were a chief executive of a private company, the president who was supposed to make government run like a business would be fired."

You know, Errol Louis, do you think based on how the president is playing this that he understands the perils here?

ERROL LOUIS, CNN POLITICAL COMMENTATOR: I think everybody down there is trying to figure out who is going to get blamed for this. And they're spending more time trying to figure out how to spin it or how to avoid blame than trying to actually resolve it. And therein lies the problem.

HARLOW: Yes.

LOUIS: I think the president, just by reversing himself yesterday, he was said to be going to Mar-a-Lago regardless of what was going to happen. Not as a show of bravado but that's just what he was going to do. They seem to have dialed that back. He now realizes, oh, there's going to be a problem here.

And in every corner of the country, as they're about to learn, if a shutdown does happen, there will be people going to national parks, they'll be going right here in New York to the harbor, to the Statue of Liberty, to show all of the people who won't be able to visit the symbol of freedom, there could be negative effects on the stock market, the big rally that he claims credit for could come to an end or at least sputter.

There are a lot of people, a lot of companies that do business with the government and they have to sort of reassess where they are and that could have some effects on the stock market. So yes, I think the president is going to understand that he's not going to escape this. Members of Congress, it's a different story.

[09:10:05] HARLOW: He said as much, guys. Listen to this. Back in 2013 ahead of that shutdown here is what then citizen Trump said.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: And the president, in all fairness, he's the leader. He's the one that has to get everybody in a room and get it done. They're not going to be talking about Boehner and Reid, they're going to be talking about President Obama and what a disaster the administration was. So he does have a lot of pressure to get this problem solved. He's got a big problem.

(END VIDEO CLIP)

HARLOW: Molly?

MOLLY BALL, CNN POLITICAL ANALYST: Well, I don't get a lot of chances to say this, but I think that Trump was exactly right. When we saw that in the 2014 midterms. I remember in the 2013 shutdown there was so much of a belief that Republicans were going to take the blame for it and they did drop precipitously on the generic ballot in the immediate aftermath of the shutdown.

But look what happened about a year later in those 2014 midterms. All voters cared about was who is in the White House and that's whose fault they said it was. And whether they were voting on the basis of the shutdown and whether that was just a distant memory, and it was other stuff, I do think, you know, Salena is right, people look at Washington and they say it just doesn't work, I'm mad. But who they take that out on does tend to be the party in power. And in this case it's the Republicans.

I think a lot of people did have hope that the Trump who was speaking on that television show was the leader that they would get, was a better negotiator than President Obama, was someone who could get Republicans and Democrats in a room, bang their heads together and make them get the deal done.

In this case they did get the deal done and he did the opposite. He was the deal breaker, he blew the whole thing up.

BERMAN: You know, Salena, you talk to a lot of the people in these, you know, swing states, some of these states that voted for Donald Trump where some of these Democratic senators are running for re- election right now. What pressure do you think they're under today, Salena?

ZITO: The Democrats? I think they're --

BERMAN: Yes.

ZITO: The Democrats like Manchin and McCaskill and possibly Brown in Ohio, although he's never going to go on the side of Republicans, nonetheless they do face pressure because there is a lot of unhappiness with Democrats in those states.

I honestly think the best thing for all of them, the best thing for Washington, for Trump, for Democrats and Republicans, is for Trump to do what he did -- I think it was last week, when called all of them in and then it was like an open mike show, just to see sort of how the sausage is made and to see how the negotiations go. I think that benefits all of them.

And if they walk out of that room with a deal, with everybody getting a little bit of everything that they wanted, I think Washington ends up looking better and there's sort of a different crisis that's going to impact what happens in November.

HARLOW: OK, guys, also want to get you on this because there's new reporting this morning in the "Wall Street Journal," Errol Louis, to you, it's about Stormy Daniels, this former adult entertainer who allegedly had an encounter, a sexual encounter with President Trump. He denies it. She denies it.

What the "Wall Street Journal" is reporting this morning is that the private lawyer for Trump, Michael Cohen, at the Trump Organization, set up a Delaware based private company and used a pseudonym to pay her essentially $130,000 in hush money.

My question to you is, this is a reporting that has been building and has been out there for now for more than a week and this is just the latest development. Congress isn't really talking about it.

LOUIS: No, I will --

HARLOW: Where are they on this? Do they have a role in this? Is this just salacious? Is it more? I mean, what do you make of that?

LOUIS: Congress I think has no role in this. Actually I think this is really for the public to digest and decide if it means anything. I am stunned, I guess with historical hindsight to think of any president going all the way back to Nixon, who's the first one I remember. The notion that something like this could come out and it's not even in the top five stories. Right? I mean, it's just kind of like, oh yes, the president did that.

And this -- you know, I read the "Wall Street Journal" story as, you know, kind of interesting operational sort of details of how you convey hush money and cover up your trail. And Michael Cohen seems to be very good at that.

BERMAN: Molly, quick last word on this, do you think this story has legs? Is this the type of thing that will haunt the president?

BALL: I'm going to try not to turn that into a double en tundra, this story about a porn actress have legs. But yes, I mean, of course, there's more details that will probably come out. And with every iteration of these stories about Trump and women, it dredges up the past. And to the extent that, you know, our cover story this week is about all the women who are mad in this country and who are running for office as a result.

The resistance is about women, the wave that's been building is about women. And it is certainly just add fuel to that fire.

BERMAN: Molly Ball, Salena Zito, Errol Louis, thank you all very, very much.

We'll have a legal expert weigh in on this next to figure out exactly how the president did what he did and if, if there are any legal implications here. [09:15:00] Plus, highly anticipated testimony from a top White House

aide abruptly delayed. This after Steve Bannon refused to answer questions and Corey Lewandowski said he wasn't prepared. Is the White House stonewalling here?

HARLOW: And inside a true and devastating house of horrors. Starving and shackled children given one meal a day, one shower a year, and now their parents being charged with torture.

(COMMERCIAL BREAK)

HARLOW: New this morning, a private company, pseudonyms, and a porn star, seriously, a new "Wall Street Journal" reports that the president's personal lawyer went to great lengths to keep a former adult film actress from speaking out about an alleged sexual encounter she had with Trump back in 2006 before he was a candidate.

BERMAN: Here to explain exactly what the story is about, CNN national politics reporter, M.J. Lee. Lay it out for us, M.J.

Well, there are so many astounding angles to this story. So, let me just walk you through it. The "Wall Street Journal" is reporting that there was a sexual encounter in the summer of 2016 between this porn star, Stormy Daniels and then-Candidate Donald Trump.

[09:20:03] And that Michael Cohen, Donald Trump's lawyer, created an LLC so that he could pay Stormy Daniels $130,000, essentially to stay quiet about this alleged sexual encounter. Now I should note CNN has not independently verified what the "Wall Street Journal" is reporting.

A couple of noteworthy things about this LLC, it is called essential consultants LLC. It was created this the state of Delaware. As you know, this is a state well known for providing a lot of privacy relative to other states for people who want to create these kinds of businesses.

According to the formation documents of the LLC that the "Wall Street Journal" is reporting on, Michael Cohen is listed as the authorized person on these documents, and Stormy Daniels is listed as Peggy Peterson. This appears to be a pseudonym. So, a lot that potentially went into keeping all of this secret and the timing of this, John and Poppy, is also very significant.

Remember, this LLC according to the "Wall Street Journal" was created in October of 2016. What this means, of course, is all of this went down just days before the election. Donald Trump's lawyer creating an LLC to pay off a woman to stay silent about an alleged sexual encounter in the final stretches of the general election.

BERMAN: M.J. Lee, fascinating. Remember, this is all in the Rupert Murdock owned "Wall Street Journal." Joining us to understand this better, CNN legal analyst, Paul Callan. Paul, Delaware LLC, this private company, why would someone use this for a payoff?

PAUL CALLAN, CNN LEGAL ANALYST: Delaware has a very sort of liberal scheme to be friendly to corporations to allow them to form these groups. This was called Essential Consultants, LLP. They don't require a complete listing of all the officers of the LLP. So, in the end, it's very hard to trace it back to where the money comes from.

HARLOW: (Inaudible) could have done is hired a separate lawyer to put his name on it instead Michael Cohen's name is on it. It would have been traceable, by the way, back.

CALLAN: That's right. And that's what they --

HARLOW: If he had you as a lawyer to advise him on this. Might not good look, salacious, et cetera, again, Stormy Daniels denies this. Anything illegal about making a payment like this, something deemed hush money?

CALLAN: It's probably not illegal. I say that because throughout corporate America, all of these settlements and sexual harassment cases, many of which involve sexual encounters, sometimes consensual, have confidentiality agreements like this. And they've been held to be legal every place.

I've also looked at. By the way, the date of the sexual encounter was 2006, however, the alleged hush money is paid in 2016, right, during the presidential campaign. However, it appears to be legal in all respects.

Except there has been one point that's been raised, which is could this be viewed as some kind of a campaign contribution by the Trump Organization if the money emanated from the Trump Organization to the Trump campaign to protect the president's reputation.

Other than that, though, it does not appear to be illegal in any way. I'm not even sure that it violates election law.

BERMAN: OK, a couple statements we have from Michael Cohen and also from Stormy Daniels here, let me put them up here. Michael Cohen said these rumors have circulated time and again since 2011. President Trump once again vehemently denies any such occurrences as has Ms. Daniels.

And as Deputy Clifford a.k.a. Stormy Daniels says, rumors I received hush money from Donald Trump are completely false. If indeed I did have a relationship with Donald Trump, trust me, you wouldn't be reading about it in the news, you would be reading about it in my book.

To their statements now, Paul, leave wiggle room here because she says I didn't receive hush money from Donald Trump. Well, the "Wall Street Journal" says she received the money from this Delaware, LLC.

CALLAN: Well, it certainly does leave a lot of wiggle room and I have to say, you have -- by the way, her true name is Stephanie Clifford. When in a porn movie, she's Stormy Daniels when she's receiving money from Michael Cohen and Essential Elements LLC, she's called Peggy Peterson. So, I would say something looks a little fishy about this so just on the surface of this. HARLOW: What about where the money came from? If this payment was made, $130,000, is there a way to know, was it campaign contributions since it was made at the end of the campaign, October 2016? If it was, what questions does that raise?

CALLAN: Well, the questions that are raised in addition to the election contribution, you talk about money laundering. For instance, if somebody -- if this were money that taxes hadn't been paid on, it depends upon where the source of the money was. So, you're always looking to trace the money.

And a lot of times people create these Delaware corporations to make the money untraceable. That's not to say this didn't come out of a personal bank account in which taxes had been paid and it's perfectly legal. But you would trace the money and follow the money trail to determine legality in the end.

HARLOW: Thank you. We appreciate it, Paul Callan, very much.

[09:25:07] Coming up, the blame game. The president points the finger at Democrats says they're the reason if the government shuts down. Is he right? What does it mean for the midterms? A Democratic Congressman will join us next.

(COMMERCIAL BREAK)

BERMAN: All right. Just minutes from now Republican senators set to meet. Topics number one, two and three the looming government shutdown less than 15 hours away.

HARLOW: And topics four, five, six, seven, eight, nine and ten. Let's discuss all of this with California Congressman Eric Swalwell, a Democrat, who sits on the Judiciary and the Intel Committee. Nice to have you here. Thank you very much.

So, look, good morning. You voted against the continuing resolution yesterday. You want to see among other things a deal for DREAMers, a DACA deal.