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Lawmakers Leave Town with No Plan to Fund Government; Israel Prepares for Protests as Hamas Calls for Unrest in West Bank; Trump Threatens General Motors, says Company "Not Going to be Treated Well". Aired 10:30-11a ET

Aired December 14, 2018 - 10:30   ET



POPPY HARLOW, CNN ANCHOR: Partial shutdown, a shutdown that is completely avoidable, a shutdown that the president said he is going to own and that the American people, he says, would support, not so sure about that, looks like that's where we are headed right now, Jim, with no deal inside.

JIM SCIUTTO, CNN ANCHOR: That's right. We have a Democratic senator on earlier in the broadcast saying the president is not going to get his money for the wall. At the center of their debate is that figure, the president wants $5 billion for a border wall.

Phil Mattingly joining us now. Phil, Democrats, Republicans, they're not on the Hill negotiating. How many have left town? Where does this leave the status here when you have both the president and Democrats seeming to dig their heels in?

PHIL MATTINGLY, CNN CONGRESSIONAL CORRESPONDENT: Yes, just about all of them are at home. The Senate is not back in the session until Monday night. The House, led by Republicans, isn't back until Wednesday night.

Now from a rank and file perspective, these aren't the lawmakers that are going to be making the deals. And I can tell you, I just walked by Senate Majority Leader Mitch McConnell's Office, and he is still indeed in Washington. The leaders are the ones who are going to have to the make the deals.

But the bigger issue now is not who is in session or what everybody is doing. It's what's happening in the Oval Office, in the White House. When you talk to both Republicans and Democrats, they both acknowledge that one, negotiations are not currently ongoing, talks are not currently ongoing, and everybody is in large part frozen until they find out what President Trump wants to do next.

Now, he's been very clear, he wants $5 billion for his wall. Democrats, as you just noticed, Senator Cardin just a short while ago, but also Senator Schumer, Leader Pelosi have made clear that's not going to happen. So, what's the play right now? When you talk to Republicans, including Republicans who should know what's going on here, like Senate number two, John Cornyn, he told me last night, there is no discernible plan. They don't know what happens next. And so, really guys, everyone is just kind of in a wait and see moment until the president decides his next move.

HARLOW: Phil, can you explain to the American people, yes, this would be a partial shutdown, not full, but it still matters and it really matters if you're a government worker who just before the holidays is going to go on furlough then, right? I mean, and some of the numbers I'm seeing here up to 420,000 government workers who could go without pay if there's this partial shutdown.

MATTINGLY: Yes, that's exactly right. Look, I think there's an element of minimizing this because it doesn't apply to the Pentagon and it doesn't necessarily apply to the Health and Human Services Department, but it does apply to, according to Democrats, who have done an analysis, about 420,000 workers would be furloughed. About 330,000 workers would have to be working without pay. And they would eventually get paid but it would be paid later, likely after the holidays. And it would just be disruptive.

You talk about the agencies that aren't going to be funded if there's a government shutdown. We're talking about the Department of Homeland Security, the Justice Department, the Treasury Department, all the financial services kind of regulators there, so it has a real impact. I will note that a lot of the vast majority of the Homeland Security Department -- the vast majority of the law enforcement, portions of the Justice Department are considered essential. They will be working but they will be working without pay. So it does have an effect. It does cost the government money when you shut down the government.

But when I think when you hear when you talk to people who are supportive of the president and the president's position here, this has always been stated as this would be the moment. He's going to fight for this, particularly as Democrats are about to retake the House. I will tell you that when I talk to Republicans on Capitol Hill, the enthusiasm for having a bare-knuckle knockdown, drag-out fight over a wall, even those who support the wall, right around the holiday season when it seems like there's not a lot of emphasis on it elsewhere, it's limited right now. So we'll have to see what the president decides --

HARLOW: It is. Our new poll shows 57 percent of Americans don't support it. Phil thanks. Appreciate it.

SCIUTTO: Listen to this story. The Department of Education will now wipe out around $150 million in student loans for 15,000 student borrowers. Education Secretary Betsy Devos, she's been forced to give up her fight to end the Obama-era rule which allowed for these loans to be forgiven. That rule helped erase debt for students who were cheated by for-profit colleges. The federal judge in the end sided with attorneys general from 18 states who sued Devos for delaying the rule while she worked on rewriting it.

Still ahead, Israel is preparing for protests in the West Bank as Hamas calls for unrest in the region. We're going to take you there, get a sense of what's behind it.

(COMMERCIAL BREAK) [10:38:38] HARLOW: Welcome back. So President Trump is now threatening General Motors, saying the company is, quote, "not going to be treated well." This is after the country's largest automaker announced it will soon be closing five North American plants, laying off just over 14,000 workers. About 1,600 of those jobs are in Ohio, but the president now says those jobs in Ohio, they will come back very quickly. Listen.


DONALD TRUMP, PRESIDENT OF THE UNITED STATES: It doesn't really matter because Ohio is, under my leadership from a national standpoint, Ohio is going to replace those jobs in like two minutes.


HARLOW: It does really matter if you're one of those workers. With me now is former Trump campaign economic adviser, Stephen Moore, he also is the author of this new book, "Trumponomics: Inside the America First Plan to Revive Our Economy." Good morning, Steve.



Like two minutes those jobs are going to come back and it doesn't really matter. Gosh, if I'm one of those workers in Ohio, it does really matter. What's your read?

MOORE: Sure. Well, look, I think the president is partially right and partially wrong here, Poppy. He's right that the manufacturing sector of the American economy is probably doing better than just about any other sector. I mean we have gained, if you look at manufacturing, construction, we have gained nearly a million jobs since Trump was elected. So, in fact, most manufacturers and construction companies say they can't find enough workers. So, it is true that you know in places like Ohio and Pennsylvania, Michigan, blue-collar workers are doing very well.

[10:40:04] Now, you're also right that you know for people who are going to lose their job, that's a very painful experience. They may be unemployed for a time, and so my heart goes out to the people who lose their jobs. You never want to see a factory close.


MOORE: But what bothers me about the story --

HARLOW: We're going to get to that in a moment. I know what bothers you. We're going to it. But I would just - I just want to you know those union auto jobs, it's not just about the salary or having the job. It's the benefits. It's the pension. It's setting up for the rest of your life. Because it's extraordinary, the benefits that still come with those jobs and the jobs that replace it may not have those benefits. MOORE: Well, I don't know about that. One of the things we have created, because you have -- right now, you have 7 million more job openings than people that are filling them, partly because they don't have the skills.

HARLOW: I get it.

MOORE: So my point is you know workers have a lot more bargaining power today than they did when we have a 7 percent or 8 percent unemployment rate.

HARLOW: All right. I get that. But a lot of those construction jobs just don't come with the pensions -

MOORE: Well, OK. You know that's a fair point.

HARLOW: -- and the things that you get with union jobs. So here's what bothers you, OK? And it's the bullying the president is doing of General Motors. Let's let everyone listen.


TRUMP: To tell me a couple weeks before Christmas that she's going to close in Ohio and Michigan, not acceptable to me. And she's either going to open fast or somebody else is going to go in. But General Motors is not going to be treated well.


HARLOW: OK, a, you know a sitting American president bullying a, you know, huge public American iconic company. A, are you comfortable with that? And B, I think more importantly, Stephen, more than how we feel about it, GM even after these layoffs is still going to have over 87,000 workers in the United States. Isn't a threat to GM a threat to all of them?

MOORE: Well I have two problems with this. Number one, I don't think - you know we want to keep big government and big business away from each other. And one of the reasons that I have fought by whole career against corporate welfare, grants from government to business, is you create a situation like this where the government has leverage over companies. We don't want -- look, I love Donald Trump, but Mr. President, it's not appropriate for you to you know to bully companies and say we don't want Washington or the White House to dictate where American company locates its plants or when it can close down a plant.

HARLOW: Right.

MOORE: You know, what we're seeing here right now, Poppy, is what we as economists call creative destruction. That sometimes - you know, this plant -- these plants that are being closed down were not profitable. They were building cars that people don't want anymore. We're going to see a lot more of that disruption in the auto industry, by the way, Poppy, over the next three and five and 10 years as the auto industry changes.


MOORE: We don't want the government to intervene and we don't want the president to intervene and tell them where to operate.

HARLOW: Right. Well, maybe he's listening to this. We'll see. We know he watches the program. Let me ask you about China. An important announcement from China this morning that they will halt their tariffs on U.S. auto imports for three months. This is clearly a goodwill gesture after Xi and President Trump met at the G20, but - I mean how significant is that given what we also learned this week from "The New York Times" great reporting of David Sanger and his team that it was China that carried out this massive hack of a half a billion people at the Marriott Hotel chain. I mean all things have to be put in perspective here, right?

MOORE: Absolutely right. I mean, look, it is a good thing that China is reducing their tariffs. By the way, 40 percent tariffs they're putting on American autos. I mean we pay $500 billion of products from them and they're imposing 40 percent tariffs on our cars. I mean it's outrageous.

Look, China steals, they cheat, they lie. As you said, they're doing illegal acts. I mean this is a bad country. I mean this is a country that is the new Soviet Union. They don't follow the rules.

You know I have to say, Donald Trump, I think, called it. China is a big, big problem on the world stage, and the question now, Poppy, because of these new revelations, is whether we can get a deal done with China. Hopefully we can in the next 70 days, but I talk to people who are over there -- in Argentina a couple weeks ago when they were negotiating and said they're so slippery. One day they say they'll agree to one thing and the next day they do just the opposite. It's a big problem.

HARLOW: Right. Right it's not just what I say, what do I do.

MOORE: Exactly.

HARLOW: Quickly, before we go, the president said, and I quote, in this Fox interview, "China's economy, if it's in trouble, is only in trouble because of me."

Fact check that for us, because sure, the tariffs hurt China. But I mean there are a lot of internal issues in China that have put a lot of pressure on their own domestic growth for a while now, right?

MOORE: Oh, absolutely. Look, first of all, I do agree that Donald Trump -- the story that really hasn't been told by the media is that the tariffs that Trump has imposed on China have actually hurt their economy.


MOORE: I mean there's no question about it. They're freaked out in Beijing about how to deal with this, and by the way, if they go to a 25 percent tariff, you know, in two months, that will really put the crunch to the Chinese economy.

[10:45:05] But you're right, Poppy, in your overall assessment that China's problems are from within. I mean they have central planning, state ownership of their enterprises, a huge amount of malinvestment. It's one of the reasons I've always said, look, in the future, technology and these new industries, I'm going to put my money on Silicon Valley, not the Chinese central planners.

HARLOW: All right. Steve Moore, good to have you. Appreciate it. Have a nice weekend.

MOORE: Merry Christmas.

HARLOW: Merry Christmas to you as well.

Very important story, violence breaking out in the West Bank after Israeli police make mass arrests. We'll tell you what's going on next.


[10:50:07] SCIUTTO: Welcome back. This crucial news overseas, protests are heating up in Israel, this after the army arrested dozens of Palestinians. Those arrests came after two Israeli soldiers were shot and killed at a bus stop. Hamas called for a day of unrest in response.

HARLOW: Moments ago, our team witnessed a 13-year-old Palestinian boy shot in the leg as these protests broke out once again.

Ian Lee is there following all the developments. Walk us through this.

IAN LEE, CNN INTERNATIONAL CORRESPONDENT: Well, Poppy, we were in Ramallah and parts of the West Bank today, and there's a heavy security presence there, many checkpoints, searching cars, looking for the perpetrators that killed those two soldiers. But meanwhile, we had these protests in and around Ramallah and other parts of the West Bank and Gaza. And most of these protests, there were dozens of Palestinians out there squaring off with the Israeli army, throwing rocks and the Israeli army responding with tear gas.

But we went to one spot which is near the Beit El settlement and Jalazone refugee camp. That's where we saw a handful of Palestinians and Israeli settlers hurling rocks and insults at each other. And that's when we saw one Palestinian boy, 13 years old, he was throwing that rock. And then we heard two gunshots. And the boy was shot in the lower leg. We don't know his condition. Medical workers were able to get to him quickly.

But this just highlights kind of the tension that has been in the West Bank today. I asked the Israeli military about that specific incident. They said that they were using riot dispersal measures, which include live fire, to disperse what they described as a riot. Poppy.

SCIUTTO: Ian, it's been a violent week, as you said, a lot of developments, the announcement of the legalization of what were illegal settlements as well in the West Bank - HARLOW: Right.

SCIUTTO: -- by Netanyahu's government. The combination of factors there, do you feel from on the ground that we're at the point of a serious escalation?

LEE: It's hard to tell right now at this point, Jim, but you can really look at the last year, since the United States declared that they were going to move the embassy to Jerusalem and that Jerusalem was the capital of Israel, we have seen this uptick in tensions with sporadic violence that gets very serious and at times we believe could lead to a war, only for regional powers like Egypt and the U.N. to bring them back to the negotiating table and really avert a further crisis. But when you look at the West Bank, this in particular has been the violence has been rising there. Just this last week, we had another attack, a drive-by shooting where seven Israelis were injured. One woman was pregnant. Her baby was delivered prematurely. That baby died.

And so we have seen this uptick in violence. And that really does always have that chance to snowball into greater violence. Especially if both sides, you have the Israelis trying to act tough, they say, by legalizing those settlements, also making those arrests. But then you have the Palestinian factions also saying they want an escalation of the confrontation.

HARLOW: Ian Lee, we're glad you're there on the ground witnessing it, reporting it. Thank you very much.

Ahead, the president's former fixer now saying enough is enough, calling the president a liar. Saying he knew exactly what he was doing with those hush money payments over alleged affairs.


[10:58:20] HARLOW: Being an influencer online like Jim Sciutto is every day has become big business.

SCIUTTO: In my dreams. And this entrepreneur is helping influencers cash in on their recommendations. That is in today's fresh money.


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I had a personal shopping business. And my blog actually became quite famous. And so my top customers just started going to my blog and they would text me and say I got that bag. It was the first. My friends are -- you're right those are the best skinny jeans. Thank you so much. Love the blog. OK, that was a $32 commission, that's a $106 commission. I'm adding it all up like I have just cut myself out of my own business, so we started building rewards style as that way for all the sales to be tracked online.

And the app allowed consumers to screen shot content anywhere they found it across the web, so whether that was Instagram or Pinterest or Snapchat or if they Googled something. They could actually screen shot it and as long as it was an image taken by one of our influencers, they could shop that image. I think that's why you see such turbulent times in retail. It's not only has your customer gone digital, they have gone digital mobile, which requires that you're really, truly a tech company. We have continued to innovate and been the innovator and the leader in the market. So thinking that we have peaked early is honestly not something that's crossed my mind.