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U.S. Government House away from Shutdown; WH: Trump won't go to Florida until Bill is Passed; WSJ: Trump Lawyer used Private Company Pseudonyms to Pay Porn Star for Silence Weeks before Election. Aired 10-10:30a ET

Aired January 19, 2018 - 10:00   ET

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


[10:00:00]

POPPY HARLOW, CNN ANCHOR: -- bipartisan way before they meet again in session, 14 hours before the government runs out of money.

JOHN BERMAN, CNN ANCHOR: The Republicans and Democrats are talking, but they're talking with themselves. They're not speaking to each other. The situation is so critical that the White House now says the president will not go to Florida if no deal is reached. Really that would have been an awfully tough picture of the president in his Gilded Club while workers were -

HARLOW: Bad optics.

BERMAN: Don't want that picture. We just learned that White House officials will brief the press in just a few minutes. They will try to spin this. We'll take that to you. We'll bring that to you live.

Let's go first to Capitol Hill. CNN's Sunlen Serfaty is there on the status. Where are we? We got the clock going, 15, 13 hours, 59 minutes until the shutdown, Sunlen.

SUNLEN SERFATY, CNN CONGRESSIONAL CORRESPONDENT: That's right, John. And it is certainly never a good sign when both sides are not talking to each other. And yet here we are, under 14 hours to go, before a potential government shutdown. And that's exactly the situation. Sources telling CNN that Senate Majority Leader Mitch McConnell and Minority Leader Chuck Schumer, they have not spoken since last night. And now keep in mind, these are the two people over in the Senate that have to figure out and come to terms with how this all ends.

Right now on Capitol Hill, add to that behind closed doors you have Senate Democrats huddling in one room. In another room, Senate Republicans are huddling, each with their respective parties, but certainly not talking to each other. The Senate floor opens up at 11:00 a.m. this morning. We expect to hear from the two leaders. Will be interesting to hear what they say about how this precedes today. At some point we do expect a cloture vote, a vote to cut off debate on this. We do expect that to fail. Republicans do not have the numbers they need. They lost a few Republican supports for the short-term measure and certainly many Democrats have been against it and Republicans point blank cannot count on the Democrat support that they need to get that passed through.

So as of now, there is not a very clear path forward at all, a lot of people up here wondering what the next step is. There have been a lot of you know side things suggested, maybe the potential for potentially passing a short-term continuing resolution, just for a few days to get them into next week. But as of now, Republican leadership is not being too apt on that idea. We don't have to remind anyone that this is a major deadline at midnight. The government shutdown and runs out of money. And Senate Majority Leader Mitch McConnell, he is preparing to keep the Senate in session of course if there is a shutdown.

BERMAN: All right, Sunlen Serfaty for us up on Capitol Hill.

We're getting new information about how the White House is planning this, a briefing scheduled for just a few minutes from now. In the meantime, let's go to the White House, CNN's Kaitlan Collins is there. What's the word, Kaitlan?

KAITLAN COLLINS, CNN WHITE HOUSE REPORTER: Well, John and Poppy, the White House is going into crisis mode almost it seems like because they are going to have a briefing here in the next half hour with two White House officials. That's going to be the director of Office of Management and Budget, Mick Mulvaney, and the White House Legislative Affairs director, Mark Short, who are going to talk to reporters about the potential of a government shutdown. We'll likely see some messaging come out of that.

But this also comes as the White House has announced the president will not travel as scheduled to his Mar-a-Lago Club in West Palm Beach if they do not get a spending bill passed here today. And the government does shutdown. We're told that decision came after a staff meeting this morning. A White House official told my colleague Jeff Zeleny, because John and Poppy, you do not need a PR genius to tell you that it is bad optics if the president travels down to south Florida for a fund raising event that costs $100,000 per couple while the government has shut down here in Washington.

And the president entered the fray this morning with all these shutdown talk, tweeting, "Government funding bill past last night in the House of Representatives. Now Democrats are needed if it is to pass in the Senate. But they want illegal immigration and weak borders. Shutdown coming? We need more Republican victories in 2018!"

Now, at this briefing here in the next hour, we'll likely see a lot of the blame for this potential shutdown and all of this drama be placed not only on Democrats, but on Congress in total, but it is worth remembering that the president has played a large role in this, because just yesterday he tweeted, criticizing a key part of the Republican proposed bill here that included that CHIP Program, extending it for another six years. So, it is a key to keep that in mind as this messaging comes out of the White House. But those two White House officials who are going to brief reporters here this morning will also be on Capitol Hill later this afternoon, meeting with lawmakers. But right now, John and Poppy, it is kind of a game of wait and see here at the White House to see who wins this staring contest on Capitol Hill. HARLOW: Good way to put it. Kaitlan Collins at the White House, thank you.

Joining us now is Republican representative Warren Davidson of Ohio. He's a member of the Freedom Caucus. And you begrudgingly last night, sir, thank you for being with us, you voted yes and you said yesterday morning on this network, I'm a no vote, something changed. What got you to yes?

REP. WARREN DAVIDSON (R-OH), FREEDOM CAUCUS: What changed is an incremental improvement in our ability to apply leverage to the Senate. So we passed in the House, since September 14th, full funding for our military at $621 billion, which is a pretty big increase.

[10:05:06] It is more than what the president asked for in his budget. And frankly the reason is, is military readiness. We have got some real issues. Those have been highlighted by some training fatalities. And so we have tried to call attention to that. The concession we got was a vote before the state of the union, not just on the number, but on a defense cap. So we're up against the BCA caps from the 2011 Budget Control Act, otherwise known as sequestration in some cases. So you would look at the ability to break the defense caps and do what we allegedly agree on already. We agree on defense, so let's get that on the floor and move forward, and then continue to negotiate on things we don't agree on.

BERMAN: So that's the long-term outlook you have for defense spending for military spending. Some people including the president are saying that a shutdown will have an immediate impact on the troops. It would hurt the troops right away. You, sir, yesterday morning, on "New Day," said that was not a particular concern of yours. Let's listen.

(BEGIN VIDEO CLIP)

DAVIDSON: It is up to the administration to determine how -- what is essential. And I have confidence that Mick Mulvaney at OMB and President Trump would prioritize funding our troops.

(END VIDEO CLIP)

BERMAN: So despite what the president says, Congressman, do you want to assuage the fears of maybe men and women in the military, you think they'll be OK in the short-term if there is a shutdown?

DAVIDSON: I think if there is, they will be fine because the administration will treat them as they should be treated. And they'll be prioritized the right way. In fact, in the very short-term this may help us solve the problem because I think reality is, is unless -- when will the Senate get to 60 votes, when they have to. And it is hard for me to imagine that Democrats are really going to prioritize 800,000 people whose families brought them here illegally over our troops. And so -- and we already have consensus on defense. We don't yet have consensus on what we're going to do about the DACA population, and apparently, unfortunately in the Senate we don't have consensus on what we're doing about nondefense spending. -- Let's move forward on what we do agree on. (CROSSTALK)

BERMAN: You said it will be fine. But Poppy found something in the -

HARLOW: Is it the words of the president are that it will be devastating to our military. That's the official statement from the White House. You say no, it is up to the executive branch to decide where the money is allocated. Is this disingenuous of the president to make this argument over and over again and frankly an argument that really scares people. I mean, imagine being -- I don't have military family members, but if I did, if my husband was in the military, this would scare me.

DAVIDSON: Yes, I think it is not disingenuous of the president. I think he's trying to get the Senate to do what he believes is the right thing.

(CROSSTALK)

HARLOW: Hold on, politically trying to get your way in saying something that is not backed, wouldn't that define being disingenuous?

DAVIDSON: Well, I don't characterize it that way. Here's what's disingenuous, the broken status quo. You know when I was in business there is no way we're going to run the -- for the year with no operating plan. There is no way we can keep spending more than you have, but that's what our government does incessantly.

And so, the Senate is really what is held us captive to this broken status quo, and frankly not over Republican control, over their own rules, the idea that you have to get to 60 votes, and so this really gives now nine Democrats the total leverage over this discussion. And that's where the emphasis needs to be.

BERMAN: You say nine Democrats, total control. First of all, I just want to emphasize. Once again your message to the military, despite the fact the president said the shutdown will be devastating, --

HARLOW: They'll be OK.

BERMAN: You told us they will be fine. Let's just make that clear. You say this is all on nine Democrats right now because of how this is all going. Well, go back to 2013. Go back to 2013, when there was a shutdown, then Donald Trump, then citizen Donald Trump, didn't say this would be on Democrats or Republicans in Congress. He said this would be on the president. Let's listen.

(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)

BERMAN: So Donald Trump says shutdowns aren't about Congress or nine members of the Senate like you're saying, he's saying they're about the president.

DAVIDSON: Well, I think at the end of the day, the president would be the same just out of that message, you know. What he's done in his business and private sector life has been very successful because he recognized that at some point the buck stops here. So I'm sure even in his remarks he's trying to apply leverage to the Senate to get them to do it. But when you look down at his director of OMB, Mick Mulvaney, he's saying things that say, we do have some discretion in terms of how we operate funding.

BERMAN: Do you think, Congressman -- Do you think the buck stops with him this time in the shutdown?

DAVIDSON: I mean, at the end of the day, we have a separation of powers. And that's really frustrating now as a member of the House to see that we have tried to get this done since the summer, frankly.

[10:10:03] We started working on this in July. We passed it in September. There has not been a need for a single CR and what is increasingly obvious to me it really is a problem with the Senate and the Senate rules. It is not a constitutional, structural issue. The problem is the rules of the Senate. Let's say, we can't get to 60 votes, and really it wouldn't inherently be a problem. It is the nature of the relationship in the Senate, so I really think that if you look where does the buck stop, right now, today, it is on the floor of the Senate, Mitch McConnell is the leader of the Senate. Everything that happens and fails to happen there comes down to Mitch.

HARLOW: I don't totally understand your line of reasoning here, because you're saying it is on Congress, it is on the Senate. But then you just said that you agree and the president would agree, you think, with what he said in 2013, that ultimately it is up to the president.

DAVIDSON: Well, you look at it from a business perspective. You don't have the -

HARLOW: But I'm not. I'm looking at it from the perspective of the president. He said in 2013, it is up to the president. He's the president. So -

DAVIDSON: Well, when he was a business guy, like I was a business guy, you look at it more like a business guy. Now I'm hearing legislature, I've been here for a year and a half. You look at the separation of powers and you'll see, you know, no one body controls everything. And even here in the House, you say, oh, Congress, that's easily reported all the time, well, Congress. Well, the reality is the House has not had our work done since September. We're really frustrated with the Senate and the lack of results there.

BERMAN: All right, Congressman Warren Davidson, thank you so much for being with us. You may have a long weekend ahead of you. More votes.

HARLOW: Let's hope not. Let's hope you can get something done. Thank you.

DAVIDSON: Thank you.

BERMAN: All right. A California couple accused of starving their own children and keeping them shackled, taunting them with food, giving them one meal a day, horrifying new details from this case.

Plus, it is the stormy cloud that keeps hanging over the White House. New reporting this morning from "The Wall Street Journal" on the lengths allegedly taken to keep an adult film star's alleged sexual encounter with then citizen Trump quiet. We have the reporter on who broke that story.

And we're standing by for a briefing with top Trump aides as this government shutdown looms, the view from the White House on this all coming up live in minutes.

(COMMERCIAL BREAK)

[10:16:30] HARLOW: A new report this morning, "The Wall Street Journal" says the president's personal attorney went to great lengths to keep a former porn star from speaking out about an alleged affair she had with Trump before he was president. This was back in 2006.

BERMAN: All right. Joining us now, one of the authors of this story, Michael Rothfeld, investigative reporter for "The Wall Street Journal." Thank you so much for being with us. As we said, another era, you know, you would be the most sought after reporter in America right now to explain this story. This is that Donald Trump's personal attorney, Michael Cohen, and we have all seen him on TV, many of us have spoken to him extensively, set up a private company to pay off this adult film star. Explain.

MICHAEL ROTHFELD, INVESTIGATIVE REPORTER, "THE WALL STREET JOURNAL": He set up a company called Essential Consultants LLC in Delaware. It basically distances him from the payment. And people commonly will use shell companies, corporations, in order to do like a one off transaction. And that way his name isn't, you know, on a transfer to another bank, so many people would not see where the money was coming from.

HARLOW: Unless there are investigative reporters like you and he wasn't as careful as he could have been to shield his name from being attached to this. Timing matters, this alleged payoff happened weeks before the election in October.

ROTHFELD: That's right. About three weeks before. And we know that Stormy Daniels, whose real name is Stephanie Clifford, former porn star, had been in discussions with Mr. Cohen for several weeks, months, actually, about trying to reach a nondisclosure agreement.

BERMAN: What exactly and I want to be careful about this, is Michael Cohen now denying and what is he not denying about this story right now?

ROTHFELD: He has denied that any sexual encounter took place between the president and Stormy Daniels. He has not denied to us that there was any payment or settlement agreement, just hasn't addressed questions about that at all.

HARLOW: It is also interesting if you look at her statement, Stormy Daniels, denies any hush money payoff. We have it here.

"Rumors that I have 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."

But she says specifically there, no hush money from Donald Trump. Not no hush money from his lawyer or this account -

ROTHFELD: Exactly. We do think that was a carefully worded statement saying I didn't get anything from Trump himself.

BERMAN: All right. Say all of this happened. Say Essential Consultants LLC paid Stormy Daniels $130,000 to keep quiet, anything inherently or necessarily illegal about that? What are the questions?

ROTHFELD: Well, first of all, I'm not a lawyer, so you know I can't give legal exactly commentary. But people reach nondisclosure agreements all the time. So, that in itself is not a problem. I think the questions that people have raised are, a, are there any tax issues, were taxes paid or, you know, reported, potentially there could be campaign finance issues if it is considered an in kind campaign contribution, depending on who paid the money and exactly how it was structured, these are questions we don't know.

HARLOW: We don't know, right? We don't know where this money was from.

ROTHFELD: We don't know. We don't know. We believe that Michael Cohen made the payment, but whether he received money from someone else or was later reimbursed, those are questions that we're still looking for the answers.

BERMAN: Any law enforcement agencies as far as you can tell asking those same questions?

ROTHFELD: We don't have any information on that at this point.

BERMAN: Michael Rothfeld, fascinating. Thanks so much for being with us. Appreciate it.

ROTHFELD: Thanks.

BERMAN: All right. Just moments from now, top White House officials will brief reporters in the White House.

[10:20:02] Why? A government shutdown 13 hours and 40 minutes away. We learned the president will not travel to Mar-a-Lago as long there is no deal to keep the government running. What will the White House spin be? Stay tuned for that.

(COMMERCIAL BREAK)

BERMAN: All right, just in to CNN, ominous warning for anyone hoping to avoid a government shutdown. A source close to the process tells our Jim Acosta, we are definitely heading there, adding we will see what happens in the Senate, which, right now, a whole lot of nothing.

[10:25:00] Just minutes from now, the White House, you can see live pictures from inside the briefing room, key members of the president's team are going to provide a briefing on this situation. And we also have learned this morning that the president will not go to Florida, will not go to Mar-a-Lago as planned, if there is no deal.

HARLOW: Needless to say the optics of him there, $100,000 a plate fund-raiser while the government is shutdown would not be good.

With us, our panel, Matt Viser, our political analyst and our political commentators, Scott Jennings and Joe Trippi. Scott Jennings, to you, as the Republican on this panel, a source close to a potential shutdown says we are definitely heading there. We'll see what happens in the Senate. If they get there, that would be what happens on the mark of the president's first year in office. How bad is it for him?

SCOTT JENNINGS, CNN POLITICAL COMMENTATOR: Well, I think the president needs to maintain message discipline on this. For the first time in my memory, on a shutdown issue, the Republicans actually have a strong hand to play. What the Democrats did, over the last 24 hours, is reveal their priorities. They are putting the undocumented immigrants, the DACA people, as a priority over the CHIP kids. There is 9 million U.S. citizen CHIP kids. And there are 800,000 non-U.S. citizen DACA recipients.

They are shutting down the government over the DACA issue. So, if I'm a red state Democrat, and I got to go home and explain that, I don't know how I'm going to do it. And the Republicans frankly are setting back and letting them do it. -- Back in 2013, when the government shutdown, the Republicans had a terrible hand to play, this time around it is much better cards on the draw.

BERMAN: All right, Joe Trippi, Scott Jennings just said that, and during this broadcast, I've been getting text messages from a Republican campaign insider who says, if you asked me 24 hours ago, I would say a shutdown would be apocalyptic for Republican House members, but I feel confident we can win this now. That's from a Republican involved with Congressional campaigns. Joe Trippi, you've been involved with campaigns on the Democratic side. Are the Republicans wrong about this? Are they misjudging? Is there hubris on that side?

JOE TRIPPI, CNN POLITICAL COMMENTATOR: Well, yes, I would say somebody is really wrong because a lot of this is about kicking the can down the road, and about just a complete failure of leadership. Look, DACA, there is bipartisan support for it. If there was a clean bill, it would be passed. Military spending, clean bill, that would be passed. The CHIP program, bipartisan support for extending it, it would pass. If McConnell put those bills cleanly up front, and then said, let's have a continuing resolution, if all four of them would pass and quick succession.

The problem here is the president said he would sign a DACA bill. If it was bipartisan, supplied to him, presented to him, it was, he rejected it. And instead of getting to these issues right now, for the American people, McConnell and the Republicans are allowing us to -- they want to kick the can another month down the road, we have been doing this for six months. There is no way -- look, it is not going to be good for anybody. But anybody who thinks that the Republicans are -- who have the House, the Senate and the presidency are somehow going to come out of this unscathed is smoking something.

HARLOW: Yes but the issue is they're the ones who are voting, yes, -- to keep the government open.

Matt Viser, as we look at these live pictures of the press briefing room right here, we're going to hear in just moments from the man who leads legislative affairs at the White House, Mark Short. If you were him, what would you say right now?

MATT VISER, CNN POLITICAL ANALYST: I mean, I think we're going to see the transition from a point of negotiating tactics to a point of who is to blame for Mark Short. I mean, I think that you see this shift and in the Senate there is remarkably little that seems to be happening in order to avert the government shutdown. So it does seem like things are moving more toward who to blame and, you know, as Joe and Scott just alluded to, we don't quite frankly know who is going to win the political argument here.

It will probably vary in different states, in different areas around the country, and depending on the terms at which this is fought. If it is an issue only about immigration, then Republicans can have a hand in a lot of the conservative states that President Trump won, where Democrats currently hold a Senate seat. But if it is about government competence, then Democrats have an argument where Republicans control all levers of power, and they just need a couple of Democrats to come along in the Senate and they have been unable to do that. So I mean I think we're going to see from Mark Short and people here shortly trying to shift to a much more political argument more than one of keeping the government open.

HARLOW: Yes, so we have some new reporting in from our Kaitlan Collins at the White House that apparently the president, guys, has not spoken to, Mark Short has not spoken to the president this morning about this.

BERMAN: He spoke to him last night. Mark Short runs the legislative affairs for the White House. --

(CROSSTALK)

HARLOW: He knows where this is headed on.