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THE SITUATION ROOM

Trump Throws D.C. Into Chaos Over Border Wall, Spending Bill; Acting A.G. Refusing Justice Department Advice to Recuse Himself from Russia Probe; House Committee to Turn Over Official Transcript of Roger Stone Interview to Mueller; Mattis to Step Down as Defense Secretary. Interview with Rep. Adam Schiff (D) California. Aired 5-6p ET

Aired December 20, 2018 - 17:00   ET

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


TOM FOREMAN, CNN CORRESPONDENT: So you've got to wonder.

[17:00:02] JAKE TAPPER, CNN ANCHOR: All right. Tom Foreman, thanks so much.

Follow me on Facebook and Twitter, @JakeTapper. You can tweet the show, @TheLeadCNN. Our coverage on CNN continues right now. Thanks so much for watching.

WOLF BLITZER, CNN ANCHOR: Happening now, breaking news. Budget tantrum. After sending signals he'd sign a bill temporarily funding the government, President Trump reverses course and says he won't unless he gets the money he wants for his border wall, moving the country closer to a government shutdown.

Vulgar narcissism. The president's changing position follows intense criticism from conservatives, who accused him of caving to Democrats and abandoning a key campaign promise. Is he afraid of losing his base?

Stone unturned. CNN has learned that the House Intelligence Committee has voted to release the transcript of its interview with longtime Trump advisor Roger Stone to Robert Mueller. Is the special counsel getting closer to indicting Stone?

And refusing to denuke. North Korea signals it may never give up its nuclear weapons and that the U.S. has a, quote, "misguided understanding" of the nuclear deal struck by President Trump and Kim Jong-un. What's new -- what new demands is Kim making of the United States?

I'm Wolf Blitzer. You're in the THE SITUATION ROOM.

ANNOUNCER: This is CNN breaking news.

BLITZER: Breaking news this hour. A government shutdown at midnight tomorrow is looking increasingly likely. President Trump is apparently bowing to conservative pressure and flipping positions again, now saying he will not sign a temporary spending bill that doesn't include $5 billion for his border wall. I'll talk about the breaking news and more with the top Democrat on

the House Intelligence Committee, Congressman Adam Schiff. And our correspondents, analysts and specialists are also standing by.

First, let's go to our chief White House correspondent, Jim Acosta. Jim, the president just said he has made his position now very clear.

JIM ACOSTA, CNN CHIEF WHITE HOUSE CORRESPONDENT: That's right, Wolf. It's beginning to look a lot like a shutdown as President Trump all but pulled the rug out from under his fellow Republicans, who thought they had a deal to keep the government open.

That was until the president started to hear from members of his conservative base, who believed he was raising the white flag on a promise of a border wall.

(BEGIN VIDEOTAPE)

ACOSTA (voice-over): It was less than a week before Christmas, and all through the capital, there was talk of a shutdown as President Trump backed away from an agreement crafted by his own party to keep the government open. The president told Republican lawmakers still in charge of Congress he wants billions of new spending for a border wall or at least steel fencing.

DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: Any measure that funds the government must include border security. Has to.

ACOSTA: As the GOP deal was falling to pieces, House Speaker Paul Ryan raced to the White House.

REP. PAUL RYAN (R-WI), SPEAKER OF THE HOUSE: The president informed us that he will not sign the ball that came over from the Senate last evening because of his legitimate concerns for border security.

ACOSTA: The president was dropping hints earlier in the day, when he reminded members of Congress the last budget he signed was not good enough, tweeting, "I was promised the wall and border security by leadership. Would be done by end of year. It didn't happen. That was last March."

TRUMP: I say to Congress I will never sign another bill like this again. I'm not going to do it again. Nobody read it.

ACOSTA: The president's newfound determination on the issue came after conservatives on FOX News, on social media and on the radio blasted the president for giving up on a key campaign promise.

RUSH LIMBAUGH, TALK SHOW HOST: Republicans are bowing down there. There's no way, even though we can allocate whatever money we need for criminal justice reform or Planned Parenthood or whatever the hell else liberal cause is clamoring for your tax dollars.

ACOSTA: And Ann Coulter, in a scathing rebuke, calling out the president for what she called "vulgar narcissism" and saying he was "scamming voters all along." The sudden chaos over government spending comes one day after the

president startled members of his open party when he declared he was pulling U.S. troops out of Syria because ISIS was defeated.

Now the president is contradicting himself, saying ISIS is still a fighting force, tweeting, "Russia, Iran, Syria and many others are not happy about the U.S. leaving, because now they will have to fight ISIS and others who they hate without us."

Senator Lindsey Graham told CNN the president's own national security team disagrees with Mr. Trump.

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: I can assure you it was done not based on sound military advice. All the advice the president received from this national security team was it's not time to withdraw from Syria, that ISIS will come back. They have not been defeated.

ACOSTA: The president couldn't resist firing back, tweeting, "So hard to believe that Lindsey Graham would be against saving soldier lives and billions of dollars. Why are we fighting for our enemy, Syria, by staying and killing ISIS for them? Russia, Iran and other locals."

TRUMP (singing): Green Acres is the place to be.

ACOSTA: And just when you thought you had seen it all from this president, Mr. Trump signed this video before signing a farm bill. The kind of barnyard behavior this week that's left much of Washington saddle sore.

(END VIDEOTAPE)

ACOSTA: And the president signaled there may be some wiggle room over the wall. Just a short while ago, while he was signing that farm bill, he said he would take a wall, or at the very least something he called steel slats, basically steel fencing for the border.

The president won't be asking Mexico to pay for those steel slats, or whatever he calls it, as he promised during the campaign. And he says he'll shut down the government if the American taxpayers don't pick up the tab for those steel slats.

Wolf, we have asked over at White House, over at the Department of Homeland Security what these steel slats are. We are waiting to hear back exactly what these steel slats involve. They haven't showed us any pictures or what they're -- what they would do from the border. The president says he's holding out for that, or else he'll shut down the government, Wolf.

BLITZER: When you find out, let us know.

ACOSTA: OK.

BLITZER: Jim Acosta over at the White House. Thank you.

Let's go to Capitol Hill right now. Lawmakers there are scrambling to try to avert a government shutdown. Our senior congressional correspondent, Manu Raju, is joining us.

Manu, I understand a flurry of activity there. Lots of confusion, but right now it looks like there could be this partial shutdown tomorrow night at midnight.

MANU RAJU, CNN SENIOR CONGRESSIONAL CORRESPONDENT: It's very possible, Wolf. House Republican leaders behind the scenes are scrambling to try to lock down votes to get President Trump what he wants, which is $5 billion in wall money to help with the border security, and as well as an additional package of disaster relief money, roughly $8 billion.

They're trying to add both of those provisions to a measure to keep the government open past Friday. Now, they want to have a vote on that measure tonight.

Now it's possible, Wolf, that that could pass the House, tool will be very, very close. Complicating members is the fact that roughly 40 members or so have missed votes through the course of the day, and they have may not have enough members -- enough members who intend to pass this measure.

But even if it were to get out of House, Wolf, the chance of it passing the Senate are virtually none. Democrats are universally opposed to this idea. They're going to need 60 Democrat senators to vote for it, and the Republicans only currently have 51 in their membership.

And on top of that, virtually every senator has returned home, thinking that President Trump was going to sign this short-term deal yesterday, which is what the White House had communicated to Republican leaders. Even the No. 2 Republican leader, Senate Majority Whip John Cornyn, told me yesterday that the president would indeed sign this measure.

Most of them have gone home, and one Republican senator, Susan Collins, said -- reacted in disbelief when she was informed by reporters that the president was not going to sign this measure.

And Wolf, the president making that decision not to sign it also caught Republicans in the House off-guard today. Earlier at a meeting Republicans emerged from a closed-door meeting, believing that the president was going sign this bill, but then the president called Paul Ryan. They had a private phone call, and Ryan realized there was a problem. He scrapped a press conference, and then he had a closed- door meeting with his own members. The leadership team went to the White House and decided this was the course of action they may have to take.

So Wolf, the big question is what will happen once the Senate or if the House rejects that $5 billion in wall money, and will the president ultimately accept something to keep the government open? If it does not have the wall money, he's signaling tonight he will not. Will he change his mind again tomorrow? The Capitol just does not have an answer to that question, leaving much, much uncertainty and raising the prospects of a partial government shutdown by tomorrow night.

BLITZER: Yes, unless he flips again, the president. Unless he flips again, it looks like there is going to be a partial government shutdown. Manu, thank you very much.

I'm going to be speaking to a key Republican about the budget and border wall in just -- in a few minutes, but there's other breaking news, as well.

Sources telling CNN that the House Intelligence Committee has voted to send a transcript of its 2017 interview with Roger Stone to the special counsel, Robert Mueller.

There are also new details emerging tonight about the acting attorney general and his refusal to recuse himself from overseeing the Russia investigation.

Our senior justice correspondent, Evan Perez, is working this story for us. First of all, Evan, what is the very latest?

EVAN PEREZ, CNN SENIOR JUSTICE CORRESPONDENT: Well, the latest, Wolf, is that initially, people in the Justice Department misled reporters and told them that, essentially, Matt Whitaker, the acting attorney general, had been told he didn't need to recuse himself. It turns out the back story is a lot more messy.

It turns out that he was advised that he should recuse himself out of an abundance of caution, simply because of the appearance of a conflict of interest, simply because of those comments, Wolf, that he's made here on CNN, some of the things that he has written, criticizing the Mueller investigation.

What Matt Whitaker instead decided to do was consult some of his own advisers and decided otherwise, essentially turning back the advice that had come from the career people inside the Justice Department.

What this means, Wolf, is that Matt Whitaker, who is the acting attorney general and the ultimate supervisor of the Mueller investigation, now could have a window into that investigation. So far, he has not gotten a briefing on that investigation, but now that he's gotten clearance, essentially, by his own -- his own people, that he can -- he doesn't have to recuse himself, it's wide open now. He can do that.

[17:10:19] BLITZER: And on the Roger Stone issue, now that the House Intelligence Committee has agreed to release the official transcript to Robert Mueller, the special counsel and his team --

PEREZ: Right.

BLITZER: -- how close is Roger Stone, presumably, to being indicted, and what does that mean potentially for these allegations of collusion between the Trump campaign and Russia?

PEREZ: Right. It certainly looks like that is one of the big possibilities here, is that the Mueller investigators are moving towards some kind of charges against Roger Stone, perhaps involving some of the comments -- some of the statements he made to the committee, the congressional committee.

There's also another possibility, and that is that the investigators, Mueller investigators, are going use this in their report, in their final report, because perhaps they don't intend to bring charges. And instead, what they're going to do is lay out everything they found out about Roger Stone, his contacts with WikiLeaks and Julian Assange, and anybody else that they may have been using as go-between, and the contacts with the Trump campaign, including perhaps the now-president himself.

So again, Roger Stone is one of the central characters in this drama, Wolf. He is, I think, central to understanding whether or not there was this conspiracy that Mueller is charged with investigating.

BLITZER: Roger Stone for decades has been a close associate of the president of the United States.

All right. Thanks very much, Evan, for that report.

Let's get some more on all of this. Democratic Congressman Adam Schiff is joining us. He's the ranking member of the Intelligence Committee, soon -- about to become the chairman of the Intelligence Committee.

Senate -- Congressman, thanks so much for joining us, and let's get to that last issue we were just discussing. Your committee has now handed over the transcript, the official transcript of Roger Stone's interview before the House Intelligence Committee to the special counsel's team. Is this leading toward an indictment?

REP. ADAM SCHIFF (D-CA), RANKING MEMBER, INTELLIGENCE COMMITTEE: Wolf, I can't comment on any request, either to confirm or deny it. So that's not an issue I'm going to be able to discuss with you today.

BLITZER: Can you tell us whether or not you think Roger Stone lied before your committee? Yesterday, one of your colleagues, Jim Himes, says he personally believes that Stone did lie during his Q&A with the committee under oath.

SCHIFF: I've said for quite some time now there are a number of witnesses, Mr. Stone among them, where I've had deep concerns about whether they testified truthfully before our committee, and it's one of the reasons why I thought we ought to provide all of the transcripts to the special counsel, so that the special counsel can assess, with the benefit of the information that he has, who may have told the truth and who may have lied to our committee.

Those transcripts, I think, also may be useful to the special counsel in terms of what evidence they show on the issues that he's investigating.

So I do believe that there are witnesses that I have serious questions about, and we saw with Michael Cohen's plea the flaw in what our majority did throughout the year, which was simply assume that everyone who came before our committee was telling us the full truth and nothing but the truth.

BLITZER: You want to tell us who the other witnesses who came before your committee that perhaps you have some concerns about what they said?

SCHIFF: Well, you know, one thing I do want to comment on or I can comment on is our desire to have Mr. Cohen come back. We certainly know, because he has admitted to it and pled guilty and accepted responsibility, that what he told us about the Moscow Trump Tower deal and how much progress they made and when that took place and whether they heard back from the Kremlin, that he testified falsely about that.

We'd like to know are there other matters that we asked him about in which he also did not tell us the full truth or other matters that perhaps we neglected to ask him about that could shed light on the core issues of our investigation as, indeed, Mueller made clear in his filing that Cohen has information at his core. And I assume core to the issue of collusion or conspiracy.

BLITZER: Would you want Michael Flynn, the president's former national security adviser, who's now awaiting sentencing -- he won't be sentenced until March at the earliest. Do you want him to come before your committee?

SCHIFF: Absolutely, and, you know, with we're reaching out to these witnesses that have entered cooperation agreements to seek our testimony before our committee.

As you know, Wolf, in the special counsel's filing there were three areas where the counsel identified that Flynn had been cooperative. One of those areas was completely redacted. If that goes to an issue that is a counterintelligence risk, that's something our committee needs to know about.

But also we have deep interest in what he can tell us about those on the transition team, including a very senior transition official which he has evidently told Mueller was knowing that what he had said and want vice president later represented to the country about his communications with the Russian ambassador was, in fact, false.

[17:15:06] BLITZER: The acting attorney general, Matt Whitaker, he has decided that he won't recuse himself from overseeing the Mueller investigation. Are you comfortable with the process that led him to make that decision?

SCHIFF: Not at all. And particularly now as more is coming out about what the ethics lawyers of justice said, if it is true that the ethics lawyers recommended that he recuse himself, and he is nonetheless refusing, it means the top justice official in the country is ignoring the advice of the ethics lawyers. That is a pretty intolerable situation, particularly when it involves an issue that was the very reason why he got the job.

And that is he had been auditioning with comments about how he could silently and out of the public view, cripple the Mueller investigation. So the first thing that we need to do is get ahold of that ethics decision, and that needs to be provided to Congress.

I think the country ought to know what the ethics lawyers have to say about this, but more than that, it underscores just how essential it's going to be that every action that he takes that has any bearing on the Russia investigation, is going to be exposed to the public.

BLITZER: If necessary, would you as the incoming chairman of the House Intelligence Committee, subpoena that ethics -- what the ethics lawyers over at the Justice Department wrote?

SCHIFF: Well, I think that the primary committee that will be looking at this issue is the Judiciary Committee. They have already indicated that Whitaker is going to be one of the first witnesses to come in. They will undoubtedly ask him questions about that ethics opinion. I think we should have that in advance of his testimony.

Frankly, I think we should have that today, given that he's ignoring it and given that he may very well start to play a role in this investigation.

BLITZER: Now that the acting attorney general, Whitaker, has made his decision not to recuse, presumably, he'll be getting some serious briefings on the Mueller investigation. Do you have concerns about that?

SCHIFF: I certainly do because, of course, we'd like to know is this something that he is going to use to inform the president or inform the president's legal team? Certainly, the ethics lawyers would advise him against that.

But if he's willing to ignore the ethics lawyers who tell him, "You should recuse yourself, the public cannot have confidence in you and that is a key criteria for an attorney general," then he may very well ignore the ethics advice about whether he can communicate about this case to the president or others on his team, given that the president himself may be implicated in this case.

BLITZER: The president now says his position is clear. He won't sign any measure to continue to fund the government -- and the funding goes out at midnight tomorrow night -- without securing funding for border security, including a wall or at least a steel fence.

Is there any compromise you'd be willing to make with him on those issues?

SCHIFF: Sure. If the president will deliver on his campaign promise and get Mexico to pay for it, then we may be able to work something out.

He committed to the country that taxpayers would not fund this wall, and he is trying to renege on that commitment. He's trying to force taxpayers to pay for something he promised they wouldn't have to pay for.

First of all, it doesn't make any sense from a security point of view to have a concrete wall or whatever latest iteration, but he promised that Mexico would pay for it. He needs to deliver on that promise if he wants to build this thing, because we're not going to vote to spend taxpayer money on it.

I think what's really going on here, Wolf, is he needs to shut down the government to show his base that he's serious about this and to do this as a sop to his base. That is not a reason to furlough tens or hundreds of thousands of people around the holidays. That is not a reason to impact all those who do business with the government, which is many hundreds or millions more, merely as a sop to his base.

So he needs to do his job, and part of that means keeping the government open. They've had two years where they controlled everything and didn't do it. They don't have the votes for it. They know it, and just to do this as a gesture to his base, I think, is unconscionable.

BLITZER: Let's not forget, more than 900,000 federal workers would immediately stop getting paid. Many of them would have to continue working on sensitive law-enforcement-related injuries, but their paychecks would dry up if, in fact, there is a partial government shutdown at midnight could. Could gave enormous ramifications, as you correctly point out. Let's see what happens between now and midnight tomorrow night.

Congressman Schiff, thanks so much for joining us.

SCHIFF: Thank you, Wolf.

BLITZER: The breaking news continues. We're going to get the very latest on efforts to avoid a government shutdown, now looking increasingly likely at midnight tomorrow.

And we just got the Democratic perspective. Up next we're going to hear the Republican side. Congressman Jim Banks, he's standing by. He'll join us live. Lots of news.

(COMMERCIAL BREAK)

[17:24:20] ANNOUNCER: This is CNN breaking news.

BLITZER: All right. There's more breaking news coming into THE SITUATION ROOM right now. A very significant development.

President Trump has just announced that the defense secretary, James Mattis, is leaving, is leaving his post. The president just tweeted this. Let me read it to our viewers here in the United States and around the world: "General Jim Mattis will be retiring with distinction at the end of February after having served my administration as secretary of defense for the past two years. During Jim's tenure, tremendous progress has been made, especially with respect to the purchase of new fighting equipment. General Mattis was a great help of getting other allies to pay a new obligation. A new secretary will be named shortly. I greatly thank Jim for his service."

Significant development, very much of a surprise coming right now. Let's go to our Pentagon correspondent, Barbara Starr. You've covered

the secretary of defense. Immediate speculation emerging, he was not even informed of the president's decision to remove, to withdraw U.S. troops from Syria. And now there's indications the president wants to do the same thing in Afghanistan, where the U.S. has about 14,000 troops. What are you hearing at the Pentagon, Barbara?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, this news just breaking across the Pentagon at this hour, Wolf. Secretary Mattis, retiring, no. Secretary Mattis is being pushed out.

There had been for weeks speculation about this, and all the indications had been all along the way that Jim Mattis would never leave of his own will. This was someone who wanted to stay on the job through thick or thin. We had often talked to him in these hallways about it.

Privately, he felt very strongly that he had come back, retired actually, from military service, and had come back as secretary of defense to serve the troops. That is what he wanted to do.

So let's be very clear. He is being pushed out. His influence had waned in recent weeks. There were several issues that he had lost out on.

But, you know, as we think about this, it is this last issue, the issue of the U.S. troops coming out of Syria, that perhaps is most instructive on this, because the signals had been that Mattis was not talking about this in public.

When we see him here in the press corps, his modus operandi is to swing by the press area, talk to us, talk to us about the decision- making, his views about it. He has been silent for days. He has not been seen around the Pentagon, and that might have been the first sign that he was thinking about what was happening here.

And in the last several hours, what has happened is, piled on top of the decision to pull U.S. troops out of Syria by the president, exactly what you said, we are seeing the emergence of, potentially, an imminent decision by the president to pull some U.S. troops out of Afghanistan. And this makes it all very difficult for Mattis to even think about staying on the job.

Because what you're talking about is a U.S. secretary of defense that then has to turn his face to the world, to the allies, to NATO, to Middle East allies, to the U.S.-backed fighters in both Syria and Afghanistan who he had promised U.S. troops would stay, U.S. troops would be shoulder to shoulder with them and fight on. And it is those local troops that the U.S. troops are trying to help out. It is those local troops who have been fighting and dying so much.

And that is something that appeals to Jim Mattis's military sense of honor. If he had made a promise to stay with them and help them fight on. And you've got to understand, thousands of Afghan forces have died in recent years trying to fight. More than a thousand U.S.- backed forces in Syria. Mattis is an emotional human being. He likes to come across as cold

and calculated. Absolutely not. He's a very deeply emotional man who feels a great sense of military honor. And if he could not look those forces in the eye that the U.S. had promised to stay and help, I don't see how he could have stayed on the job.

So this is -- this is quite a shocking development, because the president is saying Mattis is retiring. The real question is this. Is Donald Trump forcing Jim Mattis out? Has he essentially fired him, or has Jim Mattis tonight fallen on his sword and said, "You've made these decisions. I cannot honorably stay on the job"? That's the real question at hand, Wolf.

BLITZER: Clearly, he appears to have been humiliated by the president of the United States with this decision to withdraw those 2,000 U.S. troops from Syria, plus us a correctly point out, our own Jake Tapper has been reporting the president seems to be on the verge of doing something similar, withdrawing many of the 14,000 U.S. troops from Afghanistan, as well. We'll see what happens to those 5,000 troops in Iraq. Clearly, the president is not happy having any of those troops in any of those countries.

Stand by for a moment. Jim Acosta is over at the White House. All of a sudden, we get this tweet from the president, Jim, that Mattis is out.

ACOSTA: That's right, Wolf, and somebody who is a very key part of the national security leadership of this administration, and as Barbara was just saying a few moments ago, and I think you were echoing this, as well, Wolf, this comes, Secretary Mattis leaving the administration comms or this announcement that he's leaving the administration comes right in the middle of this very fierce debate over what should happen to U.S. troops in Syria. Lindsey Graham was just saying earlier today, and we just played it in our piece a little while ago, that according to Lindsey Graham, members of the President's own national security team were advocating against this withdrawal of U.S. troops from Syria.

And so, if you believe what Lindsey Graham is saying -- and it does sound like he's got his finger on the pulse of this administration and talks to people inside the national security apparatus of this administration on a regular basis, General Mattis, the Defense Secretary, was against this decision to pull these troops out of Syria. He would obviously have been a critical part of that kind of decision making, and it sounds as though -- and it's possible that Secretary Mattis is being shown the door here because of that very key disagreement on a critical issue.

And, Wolf, I think the other thing that we have to make a point of, because we've seen this so many times is this dangling of bright shiny objects at moments when the President feels like his back is up against the wall. We saw this earlier. You could say this has happened already a couple of times today. He did it earlier this morning, raising this prospect of a government shutdown after Senate Republicans like Lindsey Graham were howling up on Capitol Hill over this Syria withdrawal plan. And now, we've almost come full circle by the end of this day as people are up in arms up on Capitol Hill over the prospect of a government shutdown, and they don't know how to put all of this back together again to meet this deadline of tomorrow night.

Now, the President, you know, puts out this tweet saying that his Defense Secretary is stepping down in February, and, Wolf, all of this goes back to this criticism that we hear from both sides of the aisle which is when the President makes some of these very important decisions, like withdrawing troops from Syria, like the retirement or it looks like forced resignation of his defense secretary, he does it on Twitter when everybody is caught off guard. It just raises the question as to whether or not the President is -- whether the wheels are on over here at the White House, or whether he's just sort doing this in kind of a scattershot approach to try to draw people's attention away from parts of the news cycle that just aren't going his way. You know, just a couple of hours ago, he was talking about, well, maybe we won't shut down the government if we get steel slats at the border when we haven't really had a conversation about that at all. And just sort of came out of left field.

WOLF BLITZER, CNN HOST: Jim, I'm going to -- I'm going to interrupt you because Barbara Starr over at the Pentagon is getting the resignation letter from the Secretary of Defense. Tell us what he's saying, Barbara.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: OK. Wolf, we have this letter which essentially runs two pages. I'm going to read the full text of it to everyone, but I want to give you the headline here. This -- and what the secretary says, what Jim Mattis says to the President of the United States is, and I quote, "Because you have the right to have a Secretary of Defense whose views are better aligned with yours on these and other subjects," he's been talking about ISIS, "because you have the right to a Secretary of Defense whose views are better aligned with yours on these and other subjects, I believe it is right for me to step down from my position."

So the headline, Wolf, as we talked about a minute ago, this is Jim Mattis falling on his sword saying he cannot stay on the job. This is not Jim Mattis retiring as the President of the United States said in a tweet. The President is not accurate. Let me now start and read you this letter that Jim Mattis has written to the President of the United States, and it will take a minute.

Mattis says, and I quote from the top: "I have been privileged to service our country's 26th Secretary of Defense which has allowed me to serve alongside our men and women of the department in defense our citizens and our ideals. I am proud of the progress that has been made over the past two years on some of the key goals articulated in our national defense strategy, putting the department on a more sound budgetary footing, improving readiness and lethality in our forces, and reforming the department's business practices for greater performance. Our troops continue to provide the capabilities needed to prevail in conflict and sustain strong U.S. global influence.

One core belief I have always held is that our strength as a nation is in inextricably linked to our -- to the strength of our unique and comprehensive system of alliances and partnerships. While the U.S. remains the indispensable nation in the free world, we cannot protect our interests or serve that role effectively without maintaining strong alliances and showing respect to those allies. Like you, I have said from the beginning that the Armed Forces of the United States should not be the policemen of the world. Instead, we must use all the tools of American power to provide for the common defense."

[17:35:31] He goes on and says -- and he talks about NATO a bit. Let me jump ahead. He says, "Similarly, I believe we must be resolute and unambiguous in our approach to those countries whose strategic interests are increasingly intention with ours. It is clear that China and Russia, for example, want to shape a world consistent with their authoritarian model, gaining veto authority over other nations' economic, diplomatic, and security decisions to promote their own interests at the expense of their neighbors, America, and our allies. That is why we must use all tools of American power to provide for the common defense. My views on treating allies with respect and also being clear-eyed about both maligned actors and strategic competitors are strongly held and informed by over four decades of immersion in these issues." his military service, Wolf.

"We must do everything possible to advance an international order that is most conducive to our security, prosperity, and values, and we are strengthened in this effort by the solidarity of our alliances. Because you have the right to a Secretary of Defense whose views are better aligned with yours on these and other subjects, I believe it is right for me to step down from my position. The end date for my tenure is February 28th, 2019, a date that should allow sufficient time for a successor to be nominated and confirmed as well as to make sure the department's interests are properly articulate and protected at upcoming events to include Congressional posture hearings, et cetera." He goes on to say, "Further, that a full transition to a new Secretary of Defense occurs well in advance of the transition of the chairman of the Joint Chiefs of Staff in September to ensure stability." He goes on and pledges that he will continue to work in the job until the very end.

So, let's unpack this a bit, Wolf. The Secretary of Defense in this letter that we have several times talks about his view that America's relationship with its allies abroad is critical. We know that he had not agreed with the decision to pull troops out of Syria, that he was very concerned about the Kurds who are the allies inside Syria that the U.S. had pledged to maintain a relationship with and help them fight ISIS. We know that tonight, the President is considering pulling troops, some troops out of Afghanistan. That will make Afghan local forces very vulnerable. It will embolden ISIS. There is no question about it. It will embolden the Taliban. These are all safe havens that the U.S. has struggled to try and control.

I go back to what I think is so important for everyone to understand. Jim Mattis is someone who very much stands on his character, his ethics, and feels responsibility to the troops for 40 years on a deeply-emotional basis. All of his tough-guy image is not really who he is. He is a deeply emotional man, and for him to make this decision tonight, to say because you have the right to a Secretary of Defense whose views are better aligned with yours, this is Jim Mattis telling Donald Trump, I can no longer serve you. That is what has happened tonight. It may have actually been in the works for several days.

Mattis, I think, we now can say had planned to travel to the region over the Christmas holidays because he wanted to visit the troops on Christmas. That trip had suddenly been cancelled, there had been no explanation why. Then, we have the troops being pulled out of Syria. The growing indications tonight, the President will decide to pull troops out of Afghanistan. And this decision by Jim Mattis that he can no longer serve Donald Trump, regardless of what the President has said in a tweet about Mattis retiring, Mattis tonight is leaving. That is what has happened. Wolf?

BLITZER: Is it safe to say, Barbara, he has quit in protest?

[17:40:04] STARR: Well, I don't see how you can come to any other conclusion at this hour, Wolf, because I go back to what he has said here. Now, I think Mattis will pubically probably not, at any time soon, publically criticize the President because he will feel that he must maintain the ability of the next Secretary of Defense to show a strong U.S. security face to the world, but let's go back to this letter tonight, Wolf. Mattis saying because you have the right to have a Secretary of Defense who -- whose views are better aligned with yours, I believe it is right for me to step down. He is stepping down, and he is saying, my views are not aligned with yours.

So, we've talked in the past, Wolf, you and I have talked about this over the years, when does a military commander, which is essentially what Mattis is, when do they so call fall on their sword and say I can't serve you anymore, I have to go? Well, they do it when they get orders that are illegal, pulling troops out is not illegal. They do it when they get orders that are immoral, pulling troops out, is not immoral, but what they -- the other situation that would make somebody decide they have to leave is when they simply feel they can no longer support the decision of a President, and that is Mattis tonight, Wolf.

BLITZER: Excellent reporting, Barbara. I want you to stand by. I know you're getting more information, very significant development. Let's bring in Republican Congressman Jim Banks of Indiana right now, he's a member of the House Armed Services Committee. Congressman, you've heard the breaking news just as all of us have heard the breaking news, what's your reaction to the decision by Secretary of Defense Mattis to leave this administration?

REP. JIM BANKS (R-IN), HOUSE ARMED SERVICES COMMITTEE MEMBER: Well, Wolf, I'm disappointed. Secretary Mattis has served not just this President well but America is better off and safer today because of his leadership at the Pentagon. So, while I'm disappointed to hear this news, I have full confidence the President will choose someone to replace him of the same caliber. He just made a recent decision in his decision of the new joint chief in General Millie. I know he'll make -- continue to make decisions like that to put our best military minds in the right places to keep America safe and secure, and I have confidence in him that he will make another choice to replace Secretary Mattis with someone like that. BLITZER: But what does it say to you, Congressman, that Defense

Secretary Mattis, a retired U.S. general, has now quit in protest over the President's policies?

BANKS: Well, clearly, it's not -- it hasn't been a secret that Secretary Mattis has disagreed with the President, the commander-in- chief certainly in the full pullout in Syria but in other places as well. But that -- Wolf, that's nothing new. Every single Secretary of Defense that's served under President Barack Obama later wrote about many disagreements that they had and other Secretaries of Defense have left their position when they felt that they could no longer serve a President or commander-in-chief, so this is nothing new. Secretary Mattis has given this country and this President. By the time February comes around, a good -- a good part of his life to this role, and I -- like I said a moment ago, I'm confident President Trump will choose someone of the same caliber to serve in that position, moving forward.

BLITZER: And we're all grateful to Defense Secretary Mattis for his service to our country, over 40 years in the U.S. military, now as Defense Secretary. But this is a powerful statement that he writes in his resignation letter. Let me read another sentence to you, Congressman, because you're on the Armed Services Committee. This is what he writes in his letter to the President, his resignation letter: "Because you have the right to have a Secretary of Defense whose views are better aligned with yours on these and other subjects, I believe it is right for me to step down from my position." That's a powerful statement.

Clearly, he feels the President rejected his advice on removing troops from Syria, probably rejected his advice on removing troops from Afghanistan, the U.S. troops, the 14,000 troops in Afghanistan. They're part of a bigger NATO coalition in Afghanistan. The President clearly wants those troops out. He probably wants the 5,000 troops out of Iraq as well. He wants them back here in the United States. Is that a wise policy on the part of President Trump?

BANKS: Well, many of us on Capitol Hill, Wolf, deeply disagree with the President's abrupt pullout of troops in Syria, would disagree deeply if as well he pulls troops out of Afghanistan where I served just a few years ago as well, and we'll keep reminding the President about statements he's made in the past, but those statements in this letter by Secretary Mattis say a lot more about Secretary Mattis than they do about President Trump. He's a man of tremendous character and integrity. He's served this country so well. He understands the role of being Secretary of Defense, which is to serve the Commander-in- Chief. And while I'm deeply disappointed by him leaving, I applaud him for his leadership, and I know that this President will pick someone of the same caliber to serve in that position moving forward.

[17:45:11] BLITZER: You remember the President not too long ago said he knows more about these kinds of military situations, the operations, whether in Iraq or Afghanistan or Syria, he knows more than the generals know. So, here's the question, you say the President will get an excellent new Defense Secretary. Why would an excellent new Defense Secretary want to go into a position where the President of the United States believes he knows more about these kinds of military operations than the generals know?

BANKS: Well, why? That's a great question, Wolf, but the answer is simple. It's the same reason that Secretary Mattis stepped up to the plate to serve in this position. Any of us who have worn the uniform will step up and serve in any way that we can to protect this country, to keep our troops safe, to keep America safe and secure, and that's why I have no doubt that whoever the President wants to serve as Secretary of Defense, that person will say 'yes' when the President calls.

BLITZER: He had a few retired generals, who -- and one active-duty general who served in this administration, I think almost all of them are now gone. What's your reaction to that?

BANKS: Well, General Kelly as Chief of Staff served this President so well for now two years. Maybe there's a place for him moving forward, but like said, a little bit ago, General Millie was a terrific choice by this President to be the new Joint Chief moving forward as well. I have no doubt that this President will find someone of high caliber to serve as Secretary of Defense. I was with Secretary Mattis just a couple of weeks ago at the Reagan Defense Forum in Southern California, at the Reagan Library. And where Secretary Mattis was candid about a number of significant issues around the world, there are a number of other great military minds there as well, and I know that Secretary Mattis will give this President good advice over the next few months on who he can pick to do the job well and be a good leader at the Pentagon like we desperately need.

BLITZER: You know, it's very important, the President now saying -- and when we invited you to come on our show, we wanted to talk about a potential imminent government shutdown at midnight tomorrow night, I want to get your thoughts on that in a second, but it looks like all of a sudden, this development has caused all of us, clearly, here in the news media at least for now, to report news, the breaking news the Defense Secretary is the leaving. Do you think the President is trying to change the subject right now a bit?

BANKS: I get the impression this is completely on Secretary Mattis' timing and on his shoulders for him to make the decision and the announcement that he did today. So, we'll leave it to -- between Secretary Mattis and President Trump on who's responsible for the timing of this notice, but as you know, we have -- we have big issues going on on Capitol Hill. I've got to get to vote here in a moment to do my part, to prevent us from shutting down tomorrow night, but we still have a lot of work to do on Capitol Hill. But you're right, this is a big news story, and I'm disappointed about it because I've served so closely with Secretary Mattis over the past couple of years during my freshman term in Congress. He's been a great leader, and I'm going to miss working with him moving forward.

BLITZER: One -- I know you've got to run. One final question: will you support a compromise? Will you support allowing the government to continue at least until February, the legislation that the Senate passed unanimously last night in order to prevent nearly a million federal workers from losing their paychecks? BANKS: Wolf, we've supported numerous compromises over the past couple of years, and this will be the last significant vote that we take in this Congress. My constituents want a vote on border security and adding the funding to do that. I'm proud of our House leadership for listening to rank-and-file members like me and deciding to give us that vote. So, sometime here in the next couple of hours or so or even sooner than that, we'll have the vote on that, and send the bill back to the Senate. The senators will have to come back from their early vacation that they took yesterday, and take another vote tomorrow on this important spending deal, but that's how the process works, Wolf, and we still have enough time before a pending deadline to get this done, and I have full confidence that we will.

BLITZER: I'm going to let you go, but quickly, the President has had two years to get his wall along the border with Mexico. Clearly, Mexico is not going to pay for the wall. He's had two years of Republican-led House, a Republican-led Senate. Obviously, he's in the White House, why has he failed to achieve that goal over these past two years?

BANKS: Well, he hasn't failed yet, Wolf, and we're going to give him the best shot that he's had here sometime this evening or tomorrow morning to get the $5.7 billion that the rules committee put into this rules package to do that, and I -- as I've said many times, this funding for the wall is not just about illegal immigration, this is about border security and national security, but it's also about the illegal drug flow that desperately affects so many communities around rural America, including my district in Northeast Indiana, and the $5.7 billion for border security will have a substantial return on investment for this country. That's why I'm fighting for it, and I hope we'll have a vote on it yet here tonight or tomorrow morning.

[17:50:08] BLITZER: Well, the clock is ticking. We'll see what happens. You've been very generous with your time. I know you've got a lot of activities, you've got a lot of work you got to do. Good luck, Congressman Jim Banks of Indiana.

BANKS: Thank you.

BLITZER: Thanks so much for joining us. We really appreciate it.

BANKS: Thank you.

BLITZER: All right. Let's get some analysis. Chris Cillizza, these are dramatic developments. When you woke up this morning, did you think we're going to get a resignation letter from the Secretary of Defense?

CHRIS CILLIZZA, CNN POLITICS EDITOR AT LARGE: No, Wolf, I was planning for my wife's birthday on Saturday. But look, some of this is Donald Trump's Washington. There's just a lot of news at all times. One thing I do think is really striking, though, in listening to Barbara read Mattis' resignation letter, man, it sounded a lot like what Rex Tillerson said when he left from state. Man, it sounded a lot like the reporting coming out of the White House from Abby and our other colleagues about John Kelly's feelings. Essentially, remember, go back to the beginning of this administration, Kelly, Tillerson, Mattis, seen as sort of the Crown Jewels of this administration. One from business, two from the military. That these were the people who were going to be the stewards of the Trump domestic and foreign policy. They were going to take care -- yes, Donald Trump said and did a lot of strange things, but these were the people who he -- it showed he had good judgment. Washington liked them, they knew them, they thought they were steady and solid. And those guys saw themselves in that way. They saw themselves sort of a protector, a shield against the President's worst instincts.

But what has happened to all three of them? They all at some point or another snapped. Trump got sick of them, but they snapped, and walked away, essentially, from jobs that they had not only waited a long time, maybe their whole lives for, but that they felt they owed the country to serve in. What does that tell you about what they thought going in, the way in which they were treated, and where we go from here without those three? Not to mention all the other 65 percent of Donald Trump's top cabinet officials and staff who have left in less than two years.

BLITZER: And I want to get Jackie quickly in, Jackie Alemany of the Washington Post Power Up newsletter. Welcome back to THE SITUATION ROOM. But we got different stories from the President that said General Mattis' retiring to -- General Mattis himself who is basically saying he's quitting in protest.

JACKIE ALEMANY, ANCHOR OF POWER UP, THE WASHINGTON POST: Right, it's very clear that the ideological divide between the Pentagon and Secretary Mattis, and the President had become untenable. The President said that his -- who -- the person who he used to affectionally refer to as Mad Dog Mattis had resigned. And it was very clear from that letter that Barbara Starr read that he did not resign. And as you said, potentially quit in protest. I think these rumors that Mattis was going to be resigning have been circulating for months now. But it seems like the decisions over the past few days and now most recently with potentially withdrawing from Afghanistan have been the final straw for him.

BLITZER: Yes, it sounds like he was totally fed up and couldn't take it anymore.

ABBY PHILLIP, CNN WHITE HOUSE CORRESPONDENT: Yes, I was struck by how substantive this letter was, very specific in its critic of President Trump. And frankly, of the entirety of Trump's foreign policy over the last two years. He talks about the need to strengthen NATO, he talks about the importance of treating allies with respect. He talked specifically about the defeat ISIS coalition, which President Trump basically announced the U.S. was pulling back from in Syria this week.

This is not just Mattis getting fed up with being pushed to the side by Trump. This is Mattis saying, I can't do your -- the foreign policy that you want anymore. And I think it's an important moment for Trump. For a long time, he had surrounded himself by generals, by military officers who he had deferred to. This week really marks a turning point. Those folks are all gone now. Mattis was the last one. And President Trump is taking his own counsel on foreign policy matters. And now, there is no one left with that kind of experience around him who can really steer the ship in a different direction as many had hoped that they would.

CILLIZZA: Just to add very quickly, I do think we lose this sometimes, the abnormality of the Secretary of State, the Secretary of Defense, two Chiefs of Staff, two National Security Advisers -- I thought of H.R. McMaster when he was brought in, that was another one to Abby's point, that was a General who was (INAUDIBLE) he quickly got out. The abnormality, yes, there is turnover in every administration. The turnover in this one is significantly higher if you look at the numbers than any of the recent administrations. And it's at levels -- the state and defense are the top of the top when it comes to the cabinet. These are the most influential advisers, typically, historically, to a President. That you're seeing this level of turnover, not just turnover, but as Abby noted, turnover in which -- particularly in Mattis and Tillerson, there is an open philosophical rejection of the man that they were once serving.

BLITZER: Let me get Jeffrey Toobin to weigh in. What do you think?

[17:54:51] JEFFREY TOOBIN, CNN CHIEF LEGAL ANALYST: Well, you know, this is a good metaphor for the Trump presidency. It is more and more concentrated on the views and beliefs of the base of the party, the House Republicans. I mean, you know, the Mattis decision today and the apparent decision to shut down the government over the border wall. I mean, they are -- they are part of the same governing philosophy which is the President doesn't reach out to his adversaries, political adversaries, he doesn't compromise, and he goes with the views of what -- of the people who he feels are his closest supporters. I mean, he is going to close down the government because Ann Coulter got mad at him.

And that's, you know, that, you know, where we are on the budget side. And you know, Mattis is a representative of a broad Washington consensus about military matters, and he is not known as a particularly political person. But he's out now, and, you know, the phrase grownups in the room is probably overused and maybe not even that useful, but there are no more grownups in the room, you know? Remember, there's McMaster, too. McMaster is gone. And Kelly is gone, and now Mattis is gone. And we'll see who's in charge now. And we all got nuclear weapons.

BLITZER: Everybody, standby. The breaking news continues. Much more right after this.

(COMMERCIAL BREAK)

ANNOUNCER: This is CNN Breaking News.

BLITZER: I'm Wolf Blitzer in THE SITUATION ROOM. We want to welcome our viewers in the United States and around the world. We're following two huge breaking stories: Defense Secretary James Mattis is calling it quits, a day after the President's abrupt decision to withdraw U.S. troops from Syria. Mattis saying it's right for him to step down so Mr. Trump can have a Defense Secretary whose views are better aligned with his. Also, breaking right now, President Trump throws the nation's capital into chaos by rejecting a Republican spending compromise, renewing his demand for border wall funding, and reviving fears of a government shutdown just days before Christmas.

Let's go right to our Pentagon Correspondent, Barbara Starr. Barbara, first of all, what are you learning about James Mattis' decision to step down?

STARR: Wolf, the letter speaks for itself as we have talked about for the last several minutes.