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Sanders: Trump Not Prepared to Back Short-Term Funding Bill; DOJ Ethics Officials Say Whitaker Does Not Have to Recuse Self from Russia Investigation; Memo by Trump's A.G. Pick William Barr Slams Mueller's Obstruction Inquiry; Market Continues Fall After Fed Raises Rates Despite Trump Warning. Aired 11:30a-12p ET

Aired December 20, 2018 - 11:30   ET

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


(COMMERCIAL BREAK)

[11:34:00] PAMELA BROWN, CNN ANCHOR: About half an hour from now, President Trump is set to meet with House Republicans to discuss how to avoid a government shutdown amid a dispute over border wall funding.

Joining me to discuss, Democratic consultant, Joe Trippi, and Republican strategist, Kevin Madden.

Boy, a lot has happened on this issue just in the last hour. Things unfolding rapidly.

And now it appears, Kevin Madden, that the White House isn't going to get on board with the C.R., according to the latest statement from Sarah Sanders, the press secretary, saying that the president is not prepared to support it without funding for the border wall. This flies in the face of other signals from the White House to the Senate just yesterday. What's going on here?

KEVIN MADDEN, CNN POLITICAL COMMENTATOR: Well, we knew it was going to be a roller coaster today, but I don't think we anticipated it would be this much of a roller coaster where literally hour by hour we're getting different news from Capitol Hill. But what's going on, Pam, we don't know. In another 30 minutes, the White House could take another position. That is at the heart of why we have so much disarray up on Capitol Hill right now. Congressional Republicans just don't know where this president stands. He said he was going to shut down the government, proudly shut down the government, if he did not get the $5 billion he wanted, just a week and a half ago. But then indicated that he would be willing to sign the C.R. that was making its way through the Congress, passed by the Senate, now being considered by the House. Then this morning, they just got another new message from the president that caused more internal fighting and added just more questions. So I really couldn't tell you where things stand right now. We'll have to wait and watch for the next hour.

[11:35:41] BROWN: So on that note, Joe, is this, do you think, part of the White House's strategy, to leave people sort of hanging in the balance, allowing for this uncertainty so that Republicans and Democrats are forced to come up with more funding for the wall? JOE TRIPPI, CNN POLITICAL COMMENTATOR: I would be very doubtful about

calling this a strategy. It's just not clear at all, as Kevin said, about what exactly is going on here. The fact is there was real bipartisan support for this continuing resolution, both in the House and the Senate. It's the Freedom Caucus that is -- there's a lot of bipartisan support for border security. There isn't even partisan support for a border wall, for spending the billions required to do that. That's one of the reasons when you saw, I think, bipartisan support for a continuing resolution, the president already started to lose this battle. He lost it back when Chuck Schumer offered the full funding, $20 billion or so, in exchange for moving forward on DACA. The president thought he could get a better deal. Turned it down. It didn't work. Now we're seeing this sort of the air coming out of this bubble. And it's going to get much worse for him in the new Congress as things come around. I don't know how he wins on this one, how anything happens where with the Republicans controlling the House and Senate and the presidency, they can't move funding the government forward where the president somehow or the Republicans somehow avoid getting blamed for a shutdown if that's what occurs here.

BROWN: Let's talk about that. The White House knows full well that border wall funding is dead if it's not in this bill. But of course, it isn't in this bill as of now. Of course, things are very fluid. But is there a win for the president? I mean, either he keeps the government running or gets funding for the wall.

It just seems like there isn't a good situation either way you cut it here, Kevin Madden.

MADDEN: Yes. And, yes, I agree, but it's also a different question. It's, yes, the White House knows they're not going to be able to get funding, but have they been able to convince the president and those allies on Capitol Hill that are pressuring the president to veto this? That's where I think the gap is right now. There's a huge canyon between that reality and what the president I think is willing to accept. So, you know, I think we're really sort of out of really good options here. And I think the folks up on Capitol Hill have to find a way to communicate that to this president in a way where they can come together on a coherent strategy. They have been entirely at odds for the last week and that's where we have a situation where we don't really have many good options left for Republicans. And we're sure to bear the brunt of the bad headlines if there were to be a shutdown.

BROWN: And the president has said, of course, he would shut the government down over border wall funding. On the whole, the American people don't want that to happen. But it's clear the president is sort of feeling the heat from conservatives, particularly the Freedom Caucus, on this issue. So we shall wait and see as this uncertainty over the short-term funding bill continues AT THIS HOUR.

Thank you both for coming on and sharing your perspective.

[11:38:58] And breaking just this morning, President Trump's Acting Attorney General Matt Whitaker has been told by ethics officials at the Justice Department that he does not need to recuse himself from overseeing the Russia investigation. Details ahead. (COMMERCIAL BREAK)

BROWN: This just in to CNN. President Trump's Acting Attorney General, Matt Whitaker, has been told by ethics officials at the Justice Department that he does not need to recuse himself from overseeing Robert Mueller's Russia investigation.

I want to bring in our Justice correspondent, Jessica Schneider. She has the details on this CNN exclusive.

JESSICA SCHNEIDER, CNN CORRESPONDENT: Pamela, we know the acting attorney general, he has consulting with ethics officials at the DOJ ever since he was appointed in November. They're telling him he does not need to recuse himself from overseeing the special counsel's Russia investigation.

Now, Whitaker has been in these ongoing talks, and it is expected that Whitaker will inform Senators later today that the ethics team has cleared him to oversee the special counsel.

There's been a lot of question about Whitaker's ability to oversee this probe. Since before he went to the Justice Department, he repeatedly criticized the investigation, and he talked about the ways that any replacement to former Attorney General Jeff Sessions might be able to effectively shut down the Russia probe by cutting off the funding.

So Pam, for now, Whitaker will continue overseeing it. Of course, though, Rod Rosenstein, the deputy attorney general, does manage really the day to day of all this.

[11:44:58] BROWN: You also have some new information, Jessica, on this newly surfaced memo written by President Trump's pick for Attorney General William Barr in which he slams Mueller's obstruction inquiry in the strongest terms. What does this memo say?

SCHNEIDER: Yes, he does, Pam. It shows William Barr, as a private attorney, he wrote this unsolicited memo to senior Justice Department officials, in June of this year, just a few months ago. And he concluded the president's interactions with the former FBI Director James Comey did not, in his view, constitute obstruction of justice. So of course, this is one of the issues that is still under active investigation by the special counsel. And of course, if William Barr is confirmed as attorney general, he would be overseeing Robert Mueller. And that exact investigation into obstruction of justice. So his opinion, Pam, really does matter.

What a source told our Laura Jarrett is that Barr has discussed the fact that he sent this memo with the president. And of course, Barr has told the president that it will likely come up as part of this Senate confirmation process. So the president is fully aware.

Rod Rosenstein also addressed it this morning, Pam, and said that he didn't share any information with William Barr. And he said sometimes it's typical that these people send in their opinions to the Justice Department, but it does not affect the investigation -- Pam? BROWN: You mentioned he shared it with the president. No doubt, it's

probably something the president liked, that he doesn't believe in Robert Mueller's obstruction probe and the premise of it.

Jessica Schneider, thank you very much.

I want to get perspective now from CNN legal analyst, Renato Mariotti, a former federal prosecutor.

Thank you for coming on.

I want to start with Acting Attorney General Matt Whitaker. What do you make of what ethics officials told him?

RENATO MARIOTTI, CNN LEGAL ANALYST: I've got to say, I'm very surprised that this was the conclusion they came to, Pam, because when I was in the Justice Department, we weren't just concerned with actual conflicts of interest. We were concerned by any appearance that we may be biased or may not be acting fairly. And given all of Mr. Whitaker's prior comments about the Mueller investigation, there's certainly not only an appearance that he might not be unfair, but intense debate amongst the public about whether or not he could be fair. It strikes me as in the best interest of the department to have someone else overseeing the investigation. I'm surprised ethics officials came to that result. And I think there may be more to come on that. It will be interesting to see there was pressure put on anyone or input given, because these are officials who typically give straight down-the-middle conclusions.

BROWN: We should note that while Matthew Whitaker has been acting attorney general, though, there has been a fair amount of activity from Robert Mueller's team. Under Matthew Whitaker, the president's personal attorney, Michael Cohen, went to court pleading guilty to lying to Congress as part of the Mueller probe. We should point that out as well.

I do want to also talk to you about this memo from the president's new pick for attorney general, William Barr. He sent this unsolicited memo to the DOJ criticizing the special counsel probe as "grossly irresponsible, fatally misconceived." What does that tell you?

MARIOTTI: You know, it was a really interesting read for me this morning. And I have to say, my initial reaction is, wow, there's 19 single space pages. That must have taken him a long time to put together. I will tell you, when I write things like that for my clients, you know, that's the sort of thing that would cost a client tens of thousands of dollars. So why did he feel so strongly about making these views known? As you pointed out, unsolicited to the Justice Department. And the "Wall Street Journal" also reported he sent it to Trump's legal team. Was he angling for a job? Did he just have very strong and heated feelings about the Mueller obstruction investigation? It's really unclear.

BROWN: Renato Mariotti, thank you very much.

And coming up, the markets -- take a look -- continuing to fall and continue to have their worst December since the Great Depression. This after the Fed defies President Trump and raises rates. Is there more pain ahead? We're live at the exchange up next.

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[11:53:35] BROWN: Well then, I guess I have no more questions. Rates against the president's warning the Dow sinking again. The stock market headed for its worse December since the Great Depression. As you see, it's down about 400 points.

CNN's Cristina Alesci is at the New York Stock Exchange.

This is the fourth interest rate hike this year. Clearly, investors are not reacting too kindly to it, Cristina.

CRISTINA ALESCI, CNN POLITICS & BUSINESS CORRESPONDENT: No, they don't like it. A clear message the market is sending. What this is, is a fight between Wall Street and the president on one side and the Federal Reserve on the other. The Federal Reserve clearly stated yesterday it believes that the economy is strong enough for additional rate hikes. And that is at odds with what Wall Street wants, which is easy, cheap money. They are addicted to it and want that to continue. That frankly helps President Trump' agenda. And he considers economic growth his crowning achievement. But to be clear here, the Federal Reserve was really vague about what it will do going forward. The market took that and became completely pessimistic. There's worried about a number of things. They don't think the tax cuts, the boost the economy got from the tax cuts are long lasting, so that's a real concern here. Also internationally, there are a number of warning signs that the street is seeing and that, perhaps, a wish the Federal Reserve would have picked up on, too. We are seeing slowing global growth, particularly weak economic data out of China, which is an economic powerhouse. So there are several warning signs that point to slower economic growth. Investors here really wanted to see the Fed home in on that. And when the Fed issued that statement, they didn't see it, it's blood on the street right now.

[11:55:23] BROWN: Yes, we are seeing that play out.

Cristina Alesci, thank you so much.

Coming up, President Trump set to meet with GOP leaders any moment as a senior White House official tells me that it is possible Trump will not support a short-term measure to avoid a shutdown. That's next.