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EARLY START

Lawmakers Near Budgetary Holy Grail; Trump Wants Military Parade; Successful SpaceX Launch; Josh McDaniels Backs Out of Colts Job. Aired 5-5:30a ET

Aired February 7, 2018 - 05:00   ET

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


(BEGIN VIDEO CLIP)

[05:00:00] DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Let's have a shutdown. We'll do a shutdown, and it's worth it for our country. I'd love to see a shutdown.

(END VIDEO CLIP)

CHRISTINE ROMANS, CNN ANCHOR: Congress is inching toward deals on a budget and immigration, but will comments from the president and his chief of staff throw a wrench into delicate talks?

DAVE BRIGGS, CNN ANCHOR: After seeing this spectacle in France, the president wants a military parade in Washington. But objections are being raised over using weaponry and American troops as political props.

ROMANS: And a beautiful, successful launch for most powerful rocket since the Apollo missions. The SpaceX rocket already passing beyond the orbit of Mars.

BRIGGS: You're too excited still.

ROMANS: I know. Those -- the rocket boosters that came down so beautifully. Ah. Loved it.

BRIGGS: It was an amazing sight.

ROMANS: It was.

Good morning. Welcome to EARLY START. I'm Christine Romans.

BRIGGS: I'm Dave Briggs.

Ground control to Major Tom, the words that are blasting through space, words that blasting through space.

It's Wednesday, February 7th, 5:00 a.m. in the East.

And we start with a likelihood of yet another shutdown, because the federal government runs out of money in about 43 hours. But leaders from both parties say they're near a deal to fund the government for two years. The Republican and Democratic leaders in the Senate huddling to hash out their remaining differences on defense and domestic programs.

Now, sources say immigration and a deal on DACA have not been a part of the spending talks.

ROMANS: Even so, negotiators on both sides got a brief scare when the president jumped into the issue.

(BEGIN VIDEO CLIP)

TRUMP: If we don't get rid of these loopholes where killers are allowed to come into our country and continue to kill, gang members, and we're not just talking about MS-13. There are many gang members we already have mentioned.

If we don't change it, let's have a shutdown. We'll do a shutdown. And it's worth it for our country. I'd love to see a shutdown if we don't get this stuff taken care of.

(END VIDEO CLIP)

ROMANS: The White House later saying the president was, quote, not advocating for the shutdown. He said, I'd love to say a shutdown. The press secretary, Sarah Sanders, turning the president's shutdown comments back on to Democrats, saying if they want to hold the government hostage over immigration, the president welcomes that fight.

BRIGGS: In case a budget deal is not settled by midnight tomorrow, the House passed a short-term bill funding most agencies through March 23rd, and a Pentagon for a full year. Senate Democrats likely to oppose it, but that may not matter. Sources say budget negotiators are on track to announce a two-year deal as soon as this morning.

With the latest, let's turn to Capitol Phil Mattingly.

(BEGIN VIDEOTAPE)

PHIL MATTINGLY, CNN CONGRESSIONAL CORRESPONDENT: Well, Christine and Dave, there's no question the clock is ticking down to the government running out of money, essentially needing to extend a short-term funding agreement. But the biggest development that's occurred up to this point is not the usual kicking the can down the road. At this point in time, aides in both the Republican side and Democratic Senate of the Senate and House tell me they are on the verge of a major budget deal, something that would increase spending caps for both defense and nondefense discretionary spending, up to $300 billion, the type of deal that would essentially lock in a two-year budget agreement.

It would include an increase of the debt ceiling. It includes more than $80 billion in disaster relief for hurricane-ravaged Florida, Texas, and Puerto Rico. It would include some health care spending, as well. This is the kind of thing that lawmakers have been pointing to as a possibility, essentially clearing the decks of all these major items. It looks like they're finally there. The big question now is, what are House Democrats going do? Democrats

for a long period of time have held up the possibility of doing a deal like this because they want a DACA resolution. They need leverage to get that resolution. At least that's what aides in both chambers have been saying.

Right now, Senate Democrats are very clearly on board. House Democrats, wary, and House Democrats are going to be needed if it's going to have to move through the House. There's a lot of Republicans who are very uncomfortable with the large number of spending increases which means Speaker Paul Ryan is going to need obviously some Republicans. He's going to need a lot of Democrats, too -- Christine and Dave.

(END VIDEOTAPE)

ROMANS: All right. Capitol Phil Mattingly. You coined it.

BRIGGS: You like that?

ROMANS: I think it's good. We should get a Twitter handle.

Joining us here on set, CNN politics digital director Zach Wolf.

Good morning.

So, the likelihood of a shutdown at a funding deal, where do you see it now?

ZACHARY WOLF, CNN POLITICS DIGITAL DIRECTOR: Well, it seems like, you know, the House has sort of moved forward, but that doesn't like a deal that people are working towards. Instead, it's this larger this -- let's unlock -- you know, turn the key and lock them in a room to a two-year deal they seem to be wanting to do. But that sets aside the immigration issue that Democrats had essentially shut the government down over. So, they're giving up their leverage on this thing they thought was important just a couple of weeks ago, which is incredible.

BRIGGS: What a dramatic turnaround from where we were ahead of the last shut down.

Chief of Staff John Kelly didn't help the likelihood of an immigration deal saying this about potential Dreamers.

(BEGIN AUDIO CLIP)

JOHN KELLY, WHITE HOUSE CHIEF OF STAFF: There are 690,000 official DACA registrants and the president sent over what amounts to be two and a half times that number to 1.8 million.

[05:05:05] The difference between 690,000 and 1.8 million were the people that some would say were too afraid to sign up, others would say were too lazy to get off their asses but they didn't sign up.

(END AUDIO CLIP)

ROMANS: OK.

BRIGGS: Still shocking to hear that every time you hear it. But, look, we're used to the president's rhetoric throwing a wrench in negotiations. We're not used to John Kelly doing so.

Where does this take things and what's the criticism?

WOLF: Well, I think the criticism clearly is putting -- using such language about these people. And they were never guaranteed a legal pathway or anything like that, it was basically a wink and a nod by the Obama administration saying come out of the shadows, we'll take care of you.

Little did we know that President Trump would be here essentially canceling the program, and Congress still can't figure out how to fix it.

ROMANS: Yes.

WOLF: So, I think lazy is clearly the wrong word to use in this case. Is that going to, you know, hurt things in the future? I don't think it's going to help them certainly. He's trying to say President Trump is doing something for these people by, you know, doubling the -- more than doubling the number who would have eligibility to a pathway. But this is not helpful language.

ROMANS: It's also 500 bucks to file for the paperwork. Some people frankly don't know about it honestly or don't have the money to do it. I mean, there are reasons other than sitting on their ass. They didn't get in to this program.

Let's talk about the parade. The president -- according to the "Washington Post", the president wants a big military parade. We're told maybe 4th of July or some big celebration of America's forces.

This is what the "Washington Post" says: The marching orders were I want a parade like the one in France. This is not something we typically really do in this country. We have a proud separation of the military and the civilian-led government.

Tell me what the scuttlebutt is on this. The Pentagon is going kind of -- they're saying they're looking it over. They're looking for some dates.

WOLF: Right. And you know, you think of we have done this thing in the -- this kind of thing in the past. You think of the ticker tape parades after World War I, after World War II, after we've won wars.

But right now, there's no -- you know, U.S. troops are deployed, don't get me wrong. There's no U.S. victory, there's no declaration, there's no reason for this. And it's just not something we traditionally have done.

The Pentagon actually I think are some of the ones that have been the ones to do this sort of thing.

ROMANS: Slow-walk it a little bit.

BRIGGS: I think everyone agrees we should honor our military. But there are some feel a better way to honor them and cheaper is to visit our troops abroad. Obama did that in his first year, Bush did that in his first year. Any word of the president heading to Iraq, Afghanistan, any of these places?

WOLF: That's a great question. I -- we'll have to stay tuned. He has not done that. That's actually -- other presidents, you can think of every other president has done that in recent memory.

BRIGGS: I can't recall one not doing it. But we'll see --

ROMANS: So far the role has been Mike Pence, the vice president, doing those things. He's the one that's taken role.

All right. Come back in a few minutes. We'll talk more about this.

Steve Wynn stepping down as CEO of Wynn Resorts following allegations of sexual misconduct. Wynn has denied the accusations first reported by the "Wall Street journal." Now he says he cannot be effective in his role claiming the environment pushes for a rush judgment over the facts.

As this news broke, our very own Miguel Marquez was speaking with Charlotte Arrowsmith. She's a plaintiff in a 1998 case involving allegations against Wynn. She celebrated with a champagne toast.

(BEGIN VIDEO CLIP)

CHARLOTTE ARROWSMITH, PLAINTIFF IN WYNN CASE: Oh, hallelujah! Thank you, lord. Something positive has final come from this.

You have -- I know it doesn't hurt him. I know it doesn't hurt Wynn Resorts. He has other licensees.

I know all of this. But I'm going to tell you something -- after all he put us through, he needs to be humiliated.

(END VIDEO CLIP)

ROMANS: The accusations also cost Wynn his job as finance chairman of the Republican National Committee. Wynn resorts' president, Matt Maddox, becomes the new CEO.

BRIGGS: Former Vice President Joe Biden going right after president's relationship with the truth. Biden telling our Chris Cuomo if he were the president's lawyer, he would advise against talking to Robert Mueller.

(BEGIN VIDEO CLIP)

JOE BIDEN, FORMER VICE PRESIDENT: The president has some difficulty with precision.

CHRIS CUOMO, CNN ANCHOR: That's one of most subtle things I've ever heard you say, Joe Biden.

BIDEN: And one of the things that I would worry about if I were his lawyer is him saying something that was simply not true without him even planning to be -- to be disingenuous.

CUOMO: Do you think he has that little control over whether he tells the truth or not?

BIDEN: I just -- I just marvel at the things he says and does, like what, two days ago, anybody didn't stand up and clap for him was un- American, and then maybe even treasonous?

CUOMO: They say it was tongue-in-cheek. Democrats can't take a joke.

BIDEN: Let me tell you, he's a joke.

(END VIDEO CLIP)

BRIGGS: The president's allies say he is still eager to speak with the special counsel's team.

[05:10:01] Even as his lawyers try to delay or stop a potential sit down.

ROMANS: All right. To markets now. Volatility is back. Markets around the world adjusting to a new reality, the era of low interest rates is over.

U.S. stocks tanked, then they roared back for a big gain. Overnight looks like the anxiety is returning here. Some Asian markets fell.

U.S. futures turned lower. Look at that, now down less than 1 percent here.

Europe, though, is higher, but not by much. Let's watch that and see if it turns.

Yesterday was remarkable. The Dow swinging over a trading range of 1,200 points. Changing directions, Dave, 29 times before closing up 567 points, 2.3 percent. The S&P 500 up 1.7 percent. The Nasdaq rose about 2 percent.

The sell-off sparked by a few things. Rumblings in the bond market, concerns about wage inflation, and whether that will force the Federal Reserve to raise interest rates sooner than planned, posing a risk to the bull market that is nearly nine years old.

But as stocks turned volatile, the cheerleader in chief, President Trump, has kept quiet. He's taken credit for every big rally.

Testifying on Capitol Hill yesterday, the Treasury Secretary Steve Mnuchin, he said the economic fundamentals of the U.S. are quite strong, and he was asked if the Trump administration would accept blame for the recent drop.

(BEGIN VIDEO CLIP) STEVEN MNUCHIN, U.S. TREASURY SECRETARY: I think we'll still claim credit for the fact that it's up over 30 percent since the election.

(END VIDEO CLIP)

ROMANS: He's referring to the Dow up 30 percent since the election.

BRIGGS: And if you're the president, you should continue to focus on the positive, right, not dwell on the negative.

All right. Vice President Mike Pence meeting overnight with Japan's prime minister, vowing to stand shoulder to shoulder in the face of North Korean threat. We're live in South Korea, next.

(COMMERCIAL BREAK)

[05:16:19] BRIGGS: Vice President Mike Pence in Tokyo this morning. Just moments ago alongside Prime Minister Shinzo Abe, the vice president vowed to stand with Japan in the face of North Korea's provocations.

CNN's Ivan Watson live in Pyeongchang where members of the North Korean delegation are now arriving for the Olympics and some interesting news on those who will still arrive.

Good morning, Ivan.

IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: That's right. I'll get to that.

But, Dave, first of all, you have Vice President Mike Pence has made it clear that he is going to try to hammer home the message that the international community must continue to isolate North Korea, and that message was bolstered by the Japanese prime minister who went so far as to say there can be no meaningful dialogue with north Korea until it begins to disarm its nuclear weapons.

Take a listen to an excerpt of what the American vice president had to say.

(BEGIN VIDEO CLIP)

MIKE PENCE, VICE PRESIDENT OF THE UNITED STATES: This week, as the world knows, North Korea is sending a delegation to participate in the Winter Olympics. They'll march under the same banner as South Korea. But we should not forget that North Korea and South Korea have marched under the same banner before, only to see North Korea continue its pursuit of threats and provocations.

(END VIDEO CLIP)

WATSON: Now, he went on to promise that the U.S. was about to unveil what he described as the toughest and most aggressive round of sanctions against North Korea ever. Meanwhile, we've learned that the North Korean delegation which has already swelled to more than 400 people here including a tae kwon do demonstration team, 200-plus cheerleaders, an orchestra and Olympic athletes is soon going to be joined by the sister of the North Korean leader himself, Kim Jong-un.

Her name is Kim Yo-jong. She's a senior official in the North Korean government. And in January of 2017, the U.S. Treasury Department slapped sanctions on her. We don't know if it's possible that the U.S. and North Korean delegations could somehow meet on the sidelines of these Winter Games -- Dave and Christine.

BRIGGS: What a fascinating dynamic as the normalizing of North Korea continues. Ivan Watson live for us -- thank you.

ROMANS: All right. SpaceX has launched the world's most powerful rocket pulling off a seamless launch of Falcon Heavy. It took flight yesterday from Florida's Kennedy Space Center before a crowd of thousands.

The launch was not the only achievement. Oh, yeah, it got better. SpaceX also guided two first-stage rocket boosters back to earth. Come on!

That's awesome. I was glad to watch this and not the stock market yesterday afternoon. It was better.

BRIGGS: Although similar up and down movement.

ROMANS: It kind of was.

A third booster was supposed to land on a sea-faring platform but crashed.

BRIGGS: President Trump tweeted: Congrats, this achievement along with NASA's international partners continues to show American ingenuity at its best.

As the rocket heads into space, on board is Musk's personal Tesla roadster with a dummy, his name, Star Man, behind the wheel. The car will blast David Bowie's "Space Oddity" on repeat.

Ground control to Major Tom on loop.

ROMANKS: Elon Musk just tossed a car toward Mars. That's awesome.

BRIGGS: Inspiring.

All right. A stunning about-face by Patriots' offensive coordinator Josh McDaniels, leaves the Colts right back at square one in their coaching search. Andy Scholes with the latest in the "Bleacher Report."

(COMMERCIAL BREAK)

[05:24:16] BRIGGS: The shocking turn of events. Josh McDaniels spurning the Colts to stay with the Patriots hours before he was going to be introduced as the team's head coach.

ROMANS: Wow. Andy Scholes has more in this morning's "Bleacher Report". Hey, Andy. ANDY SCHOLES, CNN SPORTS CORRESPONDENT: Yes, good morning, guys.

You know, the Colts have actually tweeted out welcoming Josh McDaniels as their next head coach yesterday. And they'd announced a press conference for later today. But after Robert Kraft and the Patriots made a big push to keep him, McDaniels having a change of heart and deciding he's going to remain as the team's offensive coordinator.

In a press release, the Colts announced McDaniels had agreed to a contract, but then told him he'd changed his mind. Colts adding they were surprised and disappointed by his decision. So, their coaching search goes on.

[05:25:01] Devastating news for the New York Knicks last night. Second quarter against the Bucks, Knicks star Kristaps Porzingis come off the screen here and throw down the dunk, but he comes down awkwardly. Kristaps immediately grabbing his knee.

The team announcing he tore his ACL, was going to need season-ending surgery. Kristaps was going to be playing in his first all-star game next week. Now, he's going to be out ten months.

All right. The legend of Nick Foles continues to grow. On Showtime's program "Inside the NFL," it was revealed that the most famous play in history was actually Foles' idea.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: We're good for -- we're going for it right here. We're going for it right here.

UNIDENTIFIED MALE: Let's do. It let's do it. Hold on, hold on, hold on.

UNIDENTIFIED MALE: Philly special, ready?

(END VIDEO CLIP)

SCHOLES: Just amazing, guys. You know, Doug Peterson made the call to go for it on fourth down. The fact that Foles called for the play incredible just incredible. I mean, Foles, the backup quarterback in the Super Bowl calls his own number to catch a touchdown.

I mean, who would have ever thought something like that would ever take place?

ROMANS: That was just awesome.

BRIGGS: And for Patriot haters, they couldn't be more satisfied that Tom Brady had gator arms on his one toss and couldn't haul it in. So, those plays crystallized what happened.

SCHOLES: I mean, it may have been the fact in the Super Bowl that Brady didn't catch the ball and Foles did.

BRIGGS: No question. ROMANS: Awesome. All right. Andy, nice to see you.

SCHOLES: All right.

BRIGGS: Ahead, congressional leaders trying to finish a two-year budget deal and an immigration plan as well. But the president's shutdown threat and his chief of staff calling would-be dreamers lazy might not help.