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Growing Anxiety Over Looming Shutdown & Mattis Resignation; Stocks Suffer Worst Week in a Decade; Senate Leaders To Discuss Way Forward Over Border Wall Funding. Aired 5-6p ET

Aired December 21, 2018 - 17:00   ET

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


JAKE TAPPER, CNN ANCHOR: It all starts at 9 a.m. and noon Eastern.

[17:00:09] You can follow me, @JakeTapper, or @TheLeadCNN. Our coverage on CNN continues right now.

WOLF BLITZER, CNN ANCHOR: Happening not, breaking news. Succumbing to tyranny. A top Republican senator says conservative talk show hosts influenced President Trump's position on funding his border wall, leaving the country now barreling toward a government shutdown.

Supreme surgery. A new health scare for Supreme Court justice Ruth Bader Ginsburg, undergoing surgery to remove cancerous nodules from her lung.

Judicial rebuke. The chief justice, John Roberts, sides with the court's four liberals to uphold a federal judge's order, blocking President Trump's asylum ban.

And "this is scary." Lawmakers voice anxiety over the resignation of Defense Secretary James Mattis and the growing chaos rocking the Trump administration, with one Republican congressman who supports the president saying -- and I'm quoting now -- "the wheels may be coming off. "

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

ANNOUNCER: This is CNN breaking news.

BLITZER: We're following breaking news. An increasingly frantic scramble just ahead of the looming government shutdown at midnight tonight. Top members of the Trump team, including Jared Kushner, Mick Mulvaney and the vice president, Mike Pence, they've traveled to Capitol Hill where a temporary spending bill is stalled over funding for President Trump's border wall.

At the same time, lawmakers are voicing anxiety over Defense Secretary James Mattis, whose resignation letter angered President Trump. Sources now telling CNN, he, quote, "hates" -- hates -- the letter and hates the coverage of it.

All of this unfolding as the stock market closing out its worst week in a decade. I'll talk about the breaking news with Republican Congressman Will Hurd and the No. 2 House Democrat, Congressman Steny Hoyer. And our correspondents, analysts and specialists are also standing by.

First, let's get some more on the scramble under way now up on Capitol Hill to avert a government shutdown. Our senior congressional correspondent, Manu Raju, is joining us.

Manu, there's been some last-minute shuttle diplomacy, I take it, involving senators and the White House. What are you learning?

MANU RAJU, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Yes, any minute now, we're expecting Senate Majority Leader Mitch McConnell, Senate Minority Leader Chuck Schumer, to go to the Senate floor and to discuss a possible way out of this stalemate that could lead to a significant government shutdown. A number of agencies affected at midnight if there is no agreement.

I just spoke to Senator Bob Corker of Tennessee, who left Mitch McConnell's office and said they have discussed a process to move, potentially move forward to avoid a shutdown. Something that could chart the course forward to avoid a shutdown.

Now, he declined to give details, and he also suggested perhaps there's not an agreement on the funding level over the main sticking point, which is President Trump's demand for $5 billion for his border wall. He suggested that this process could eventually lead to a way to resolve that sticking point, but he expects more details to come out just in a matter of minutes.

Now, Wolf, this came after Vice President Mike Pence, Jared Kushner and Mick Mulvaney, the president's acting chief of staff, all came to Capitol Hill to meet with Chuck Schumer, the Senate minority leader, also headed over to the House to discuss a way out of this matter. Pence just leaving the House moments ago.

And all day long, Wolf, Republicans have been upset at the president's refusal to lay out exactly what he would sign to avoid a shutdown. In a morning meeting this morning with Republican senators, he did not say that -- what he would ultimately endorse below that $5 billion number, something that will not get the support within the United States Senate. And at a closed-door lunch meeting, I am told that Republican senator after Republican senator laid out options. But they said they wanted to hear from the president exactly what he would get behind to avoid a shutdown right before Christmas.

But, Wolf, at this late hour, perhaps there's a way forward, with Schumer and McConnell expected to come -- come out and make some remarks.

But still, Republicans want to know a plan. One Republican senator, Wolf, Lisa Murkowski, who did meet with the president, told me just moments ago that she's frustrated at this president. She said because people are expecting, Americans are expecting that a Republican president, along with a Republican House and Senate, will have an end game, will have a path forward for us, as we are just hours from a government shutdown. We'll see if they have a plan and a path in just a matter of moments here, Wolf. BLITZER: In the Senate, at least, as you know, Manu, they had a deal

the other night. It passed unanimously to continue, at least, a temporary measure to keep the government operating until February 8.

[17:05:06] But then all of a sudden, they thought the president would sign it. And all of a sudden, the president, under a lot of pressure from conservative talk show hosts, among others, he flipped. He decided he wouldn't sign it. He only wants $5 billion for a border wall. The Democrats say that's never going to happen.

So what leads anyone to believe there could be a compromise this time?

RAJU: That's a great question, Wolf. And I put that question directly to Bob Corker after he left Mitch McConnell's office. And he said the president is aware of these discussions that are ongoing. But everyone has that note of caution, because ultimately, who knows where the president may come down? He told -- Vice President Mike Pence came to a lunch on Wednesday and signaled that Republicans -- that the president would sign that measure to keep the government open. That's at least the impression the Republican senators got, including the No. 2 Republican, John Cornyn, who told me very directly that the president was going to sign this measure.

Most of them went home, and now after the president reversed course suddenly yesterday, they're flying back into town, which is why this vote on the Senate floor has been open for hours, since 12:30, since senators are still flying back into town to vote on whether to take up that House-passed funding bill.

But expect, Wolf, if this agreement does come to light on the process to move forward, they may agree to take up this House bill, try to change it in a way to reach an accommodation on all sides, send it over to the president for a signature.

But again, a lot of hoops to jump through. They need the president's support. Uncertain if they can avert a shutdown, but at least, potentially, some movement after a day of stalemate, Wolf.

BLITZER: Stand by, Manu. I want to go to our chief White House correspondent, Jim Acosta. He's getting information over there, as well.

The president seems intent on letting the government shut down at midnight, at least based on what he said earlier in the day, Jim.

JIM ACOSTA, CNN CHIEF WHITE HOUSE CORRESPONDENT: That's right, Wolf. And if you listen to what Manu was just saying, it sounds like they're dealing with some legislative fruit cake up on Capitol Hill. They're trying to find the right ingredients so they can come up with something that everybody can swallow and avoid this government shutdown.

One thing that's interesting to note in the last hour, what we saw -- perhaps you can call them the three wise men, maybe not everybody would agree with that characterization, Wolf. But earlier this afternoon, Mick Mulvaney, the incoming White House chief of staff; Jared Kushner, the president's son-in-law, they went up to Capitol Hill to try to persuade lawmakers to say, "You know what? Let's not have this government shutdown."

The vice president, Mike Pence, was also with them. They talked to Chuck Schumer, the Senate minority leader. They talked to the House speaker, Paul Ryan. And so now I think the stage is set for the majority leader and minority leader, to come out and talk about exactly what everybody can agree to.

Whether they have an agreement at this point, it's unclear. If you listen to Senate Minority Leader Chuck Schumer, he has been saying for some time now that the president is not going to get his wall. He said that earlier today on the Senate floor.

And the president earlier today was trying to rebrand and disown this shutdown that he said he would own just ten days ago. He was saying earlier today that this would be the Democrats' shutdown if the government shuts down later on tonight. That this would not be his responsibility, that he would not take the blame for it.

But Wolf, that just flies in the face of everything that we've heard over the last ten days since that dramatic exchange between the president, Chuck Schumer and Nancy Pelosi in the Oval Office ten days ago. Just to remind our viewers, here's what happened.

(BEGIN VIDEO CLIP)

DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: I am proud to shut down the government for border security. I will take the mantle. I will be the one to shut it down. I'm not going to blame you for it. The last time you shut it down, it didn't work. I will take the mantle of shutting down.

SEN. CHUCK SCHUMER (D-NY), MINORITY LEADER: Good.

REP. NANCY PELOSI (D-CA), MINORITY LEADER: That is not --

TRUMP: And I'm going to shut it down for border security.

SCHUMER: We believe you --

(END VIDEO CLIP)

ACOSTA: But now, Wolf, the president, whether he wants to own this shutdown or not, he's likely to get the blame for it pretty soundly here in Washington.

One thing that we should note, they have cancelled plans at this point for the president to fly down on Air Force One down to Mar-a-Lago to begin his holiday vacation down in Florida. That's an indication at this point over here at the White House they're anticipating at the very least that this might go into a brief shutdown, if not a lengthier shutdown.

And so at this point, whether the president wants to accept a shutdown or not, whether he wants to own this shutdown or not, that is the direction we're all heading at this point, unless Mitch McConnell and Chuck Schumer, two legislators, two lawmakers, who are very skilled in the ways of Washington, can somehow come up with a holiday miracle, Wolf.

ACOSTA: And something that the president would sign into law if it were to pass the Senate and then the House. We'll see what happens.

Jim, you also, I understand, have some new details about the president's reaction to the stunning resignation yesterday from the defense secretary, James Mattis.

ACOSTA: That's right. The other half of the equation here in Washington right now in terms of all of this Christmas chaos we're seeing is this sudden departure, the sudden resignation of the defense secretary, James Mattis, though he says he's going to be leaving later on in February. I mean, that sent shock waves across Washington, as you know.

And there was that dramatic meeting that the president had with the defense secretary yesterday afternoon where they apparently clashed over Syria, other issues. And then the defense secretary decided, "OK, I'm going to resign in protest." He submitted that letter. Barbara Starr, very dramatically read from that letter yesterday here on CNN.

[17:10:14] And it really goes to, as you know, Wolf, the defense secretary's deep reservations about the president's sort of go-it- alone foreign policy.

I'm told by a source close to White House, an adviser who advises the president occasionally, that he hates that letter. Quote, "hates that letter" from the defense secretary, James Mattis. But that he, quote, "hates the coverage even more," because he does not like this conventional wisdom -- and we heard about it all last night after the defense secretary's letter was read publicly on the air -- that essentially -- that Jim Mattis, as well as other, I guess, long- serving members of this administration, people who have been in Washington for a long time, people like chief of staff John Kelly and so on, that they were sort of the adults in the room, along with Jim Mattis, who were there to keep the president from going overboard, to be a check on his impulses.

And so the president once again irritated by this notion here in Washington that he is sometimes in need of adult daycare. And that part of the coverage really irritated him, according to a source I spoke with earlier today, Wolf.

BLITZER: All right. Jim Acosta, thank you very much. Stand by for a moment.

Phil Mattingly is also up on Capitol Hill. He's working his sources. What are you learning?

PHIL MATTINGLY, CNN CONGRESSIONAL CORRESPONDENT: Well, Wolf, I think one of the big questions right now is, if there is a deal to be had, what would the parameters of those -- what that deal actually would be.

You listened to Manu just a short while ago. He said the potential breakthrough that might be happening, it might be announced on the Senate floor, is procedural. It's not on the substance base. So the big question becomes when and if they actually get to the substance, where is a possible agreement?

Now, obviously, Mick Mulvaney, Jared Kushner and the vice president were up here to meet with both Chuck Schumer and House Republicans at one point. Chuck -- a source close to Chuck Schumer said in that meeting, Schumer did not give an inch in terms of whether or not he would be willing to give more money towards a border wall.

You know quite well, Wolf, that's the current deal that's on the table is the stopgap funding bill until February 8. In that bill, there's $1.3 billion for border security.

Now, one of the numbers that has been batted around repeatedly over the course of the last couple weeks is moving back to what, in a bipartisan manner, the Senate agreed to on border security. That level was at $1.6 billion. But it's worth noting, Wolf, that was taken off the table by Democrats about last week. And for that to enter back into discussions has caused some frustration, even for some Republicans.

And the reason why is this. I'm talking about the House Republicans and Senate Republicans, both staff and members. Is they don't have any certainty in terms of what the president would accept. When you talk to House Republicans, Wolf, they make very clear: "We can't move until we know what the president wants to do." If the president signs off on something, there's a good chance House Republicans would be willing to get behind it. But until he sets a number, until he lays something out, they can't move forward. They don't want to undercut the president. They recognize that their conference wants to fight on this issue and wants to support the president. So they, to some degree, are paralyzed.

Now, Senate negotiators are also still waiting to see what's going on. What I'm told right now, is even when these letters come to the floor, there is no current agreement on substance, and, in fact, they haven't gotten into that level yet.

So you know, Wolf, the clock is ticking towards that shutdown. Substance is key. Process might be a start. But you can't get anywhere until you actually agree on the parameters of an actual deal, Wolf.

BLITZER: And they're still waiting for some senators to head back -- to make it back to Washington. They were already on the road. They assumed they had a done deal the other day. They split town, and now they all have to come back.

Manu, I want you to step back. Manu Raju is up on Capitol Hill. There's been a lot of confusion. Clearly another crazy day today. Walk us through what has happened. RAJU: Yes. Mitch McConnell actually, Wolf, just walked on the Senate

floor. Mike Pence, the vice president, also on the Senate floor. So we're expecting any moment an announcement. We'll see if that actually leads to an agreement.

But all day long, tension in the halls of the Capitol among members trying to figure out what they're doing back here after they thought they had that deal on Wednesday night, having to change all of their plans to come back, to figure out exactly what the president wants. That's been the question that has been lingering all day.

And added to that, the uncertainty of everything that has happened in the last 24 hours and the resignation of Jim Mattis has led the Republican senators to have real concerns about the leadership of this president.

One Republican senator I talked to, Bill Cassidy, said he hopes for steady leadership out of this White House. I asked Lisa Murkowski if she has confidence in the president's leadership. She paused for several seconds, raised a number of concerns and said, "The way that this shutdown was handled and the Mattis resignation and the Syria withdrawal was handled, I have a lot of concerns right now." And you're hearing that from senator after senator, Wolf.

So perhaps they can avoid this shutdown, it could ease a lot of the tension that the president is feeling from his own party right now. But just in a matter of moments, we do expect some sort of announcement to happen on the floor. Mike Pence waiting for that announcement to happen, as well as Mitch McConnell and Chuck Schumer, we expect to be on the floor momentarily, Wolf.

[17:15:13] Whether this gets out of a shutdown, we'll see. Because time and again, the senators think they have a deal with this White House and ultimately, they don't, because the president changes his mind. Will he this time, and will they sign on the dotted line at the end of the day, the big question here in this late hour, Wolf.

BLITZER: And Mike Pence, as vice president, he is the president of the U.S. Senate. That's why he's on the Senate floor right now.

Manu, I assume we anticipate that Mitch McConnell will be speaking first, followed by Chuck Schumer. Is that right?

RAJU: Yes, that's typically what happens in these type of agreements about disputes. They both want to be on the same page publicly, so everybody knows exactly where each side stands.

What will be interesting to see is the details they talk about and what they leave out. Do they leave out how to deal with the president's demand for $5 billion in funding for his border wall? Or do they suggest that there is a middle ground somewhere between what the president has been asking and what the Democrats put up initially, the $1.3 billion. Or what was agreed on a bipartisan basis on the Senate side, $1.6 billion. Of course, far short of the $5 billion that the president is demanding. Do they get into any of these details? Or do they simply discuss a

process of moving forward and trying to get to a deal ultimately on the floor of the Senate? And if it's the latter, if it's just about a process, then that means there are a lot more negotiations that need to take place in order to avert this shutdown at the end of the day.

But the fact that these two sides are talking, Wolf, first time in some time -- remember, after that very tense White House meeting last week between Schumer, Pence and Nancy Pelosi, there were virtually no discussions between the White House and Democratic leaders. So this is the first time in some time since a week and a half that they have actually started to have discussions on trying to resolve this stalemate. And it appears they're at least talking about a process. We'll see how many details they ultimately give to avert a shutdown here by midnight, Wolf.

BLITZER: And Manu, I just want to walk through our viewers -- it's a little complicated. But before there's a final vote on legislation that would keep the government operating after midnight tonight, a final vote would require 60 votes in the U.S. Senate. They have to pass a procedural vote to allow that to happen, and that would only need 50 votes, assuming that the vice president, Mike Pence, who is the president of the Senate -- the vice president would then break a tie.

RAJU: That's right. And that's a procedural vote that's been held open since 12:30 today because of questions about whether senators could return after they had left, assuming the president was going to endorse this short-term measure. Changes plans -- the senators changed their plans and they're waiting to vote.

So assuming they get a simple majority, 50 senators, to move forward, then at that point, they would be on the legislation itself. They can change it. They can amend it.

And then to eventually move off of the bill, that's when they're going to need 60 votes. And that's the tough vote. That means that 51 Republican senators would need to get nine Democrats to switch and flip sides in order to move past a final hurdle and get this out of the United States Senate.

And Wolf, that's what the president has been railing on all day today, demanding Mitch McConnell, Republicans, change the rules to allow just a simple majority to overcome what's known as a filibuster, a delay tactic on the Senate floor.

But Republican senators have pushed back. And I am told at that White House meeting today, Wolf, President Trump told Republicans to change the filibuster rules. And Mitch McConnell said no. He insisted that they would not move forward, and Republican senators today have reiterated, backed up McConnell. So there is a dispute on that point. A dispute on the strategy. A dispute on the policy.

But we'll see if there's any resolution here just in a matter of moments after days and days of gridlock over keeping the government open, Wolf. BLITZER: Yes. Right now 51 Republicans, 49 Democrats, three of them

independent. But one of those Republican senators won't be able to vote because of a medical condition.

Stand by, Manu. I want to bring in Republican Congressman Will Hurd, of Texas. He's a member of both the Intelligence and Homeland Security Committees.

Congressman, thanks so much for joining us. And if I interrupt you, you'll totally understand --

REP. WILL HURD (R), TEXAS: Sure.

BLITZER: -- if we have to go listen to Mitch McConnell make this announcement. We're standing by for that.

But big picture right now. The defense secretary, as you know, James Mattis, he's resigned in protest of the president's policies. All of a sudden this is the worst week for the markets since the financial crisis. Worst December since the Great Depression. The government controlled by Republicans, the White House, the House, the Senate and everybody is heading potentially for a Christmas shutdown. How concerned are you right now, big-picture, about the state of the union?

HURD: Well, a lot of these issues are self-inflicted wounds. We shouldn't pull out of Syria. We shouldn't pull out of Afghanistan. The markets are going to have an even bigger jolt in the new year when it's finally -- you know, they start paying attention to NAFTA 2 or the USMCA, and we realize there's not enough votes in order to get that across the floor as of right now. A lot more work needs to be done there.

[17:20:13] So this is all of these things are building together.

What we should be doing is continuing to work with our allies. We don't want to -- if you pull out of Syria, you're going to allow ISIS to rebuild. There's 300,000 fighters from Syria and Iraq. You allow them to rebuild. You also allow Bashar al-Assad to come in those parts held by anti-Assad forces.

That's going to generate, you know, potentially another million refugees. Where are they going to go? To Jordan. Jordan is already having a problem there.

The similar situation that's going to happen in Afghanistan.

This is one reason why we need to get this government funded. The rest of it, we do have problems along the border. I have more border than any other member of Congress.

BLITZER: I want to get to that in a moment. But I just want to interrupt for a moment. When you say self-inflicted wound, self- inflicted by the president of the United States? Is that what you're saying?

HURD: Well, yes. He made the decision to pull out of Syria, despite the counsel of people that have been following this for a long time.

Ultimately, trying to address this issue on the border, we can actually have real border security in one year for less than $1 billion if we do what I like to call the smart wall. Use technology and manpower in order to keep people out of the border.

I have more border than any other member of Congress. I've been protecting this country for almost my entire adult life, chasing bad guys all around the world. This is the way we should be solving problems. And these are the conversations that we're having.

We shouldn't be waiting until the last -- until the last minute to have that. And we shouldn't be exacerbating a problem by having our men and women in the Department of Homeland Security have to continue to do their job and then have this uncertainty about whether or not they're going to get paid during Christmas.

BLITZER: You know, it's interesting when you said we're talking about self-inflicted wound by the president that's causing all this chaos right now, this crisis that's unfolding. Over the past 24 hours, w two former Republicans, both of whom were defense secretaries, William Cohen and Chuck Hagel say right here on CNN that President Trump is not fit to be president. Do you agree with that?

HURD: Well, Wolf, you know this. I agree he when I agree. I disagree when I disagree. The American people elected him back in 2016.

Some of these recent decisions I completely disagree with, especially this issue on Syria. And on Afghanistan, my concern is that the taking away of 7,000 troops is the beginning of removing all the troops.

Yes, we've been in there for 17 years. Yes, we've spent a lot of blood and treasure. But we have prevented attacks on our homeland.

I was in the CIA when 9/11 happened. On September 12th, everybody thought another attack like that was imminent. It hasn't happened because of the hard work, the blood that has been shed in Afghanistan, the money that has been spent in Afghanistan. And we have to continue that presence so we do not see these groups reconstitute and come back and attack us.

I think that was a terrible decision, and any continued removal or potential conversations around removal of all of our troops in Afghanistan would ultimately mean that we're going to see our homeland more vulnerable.

BLITZER: He's clearly anxious to not only get all U.S. troops out of Syria and Afghanistan, but I assume Iraq, as well. His statements over the years have made that clear. So let me repeat the question. Do you think he's fit to be president?

HURD: I think he's made bad decisions recently when it comes to Syria and Afghanistan. And I think the decision should be to stay there. It's a tough decision to make. I know it's counter to what he may have said on the campaign trail. But those are -- those are bad decisions.

BLITZER: So I just want to be precise. I want to move on, but just want to be precise. I'm not hearing you say, Congressman, that Donald Trump is fit to be president.

HURD: I think he's making bad decisions. It's not my -- it's not my call. This was -- this was decided by the American people in a vote in 2016.

And guess what? In two years, everybody is going to be able to ask that decision of themselves and make a decision on whether they think that's going to happen.

My focusing right now is doing whatever I can to make sure we keep this government open, making sure that bad decisions don't become worse. And this is what I'm focused on right now.

BLITZER: Your district, your congressional district, has more border with Mexico -- 800 miles -- than any other congressional district in the United States. And you don't believe a wall is really necessary to enhance U.S. border security. Have you told that to the president?

HURD: Yes. My opinions have been -- have been well-known. General Kelly, when he was at DHS, knows that. He knows that when he was chief of staff. The new secretary -- or Secretary Nielsen knows that, as well. You know, Mick Mulvaney knows that. Again, this is about actually securing our border.

[17:25:06] One of the things I'm -- one of the things I'm concerned with over the next, you know -- in this funding breakdown is that the State Department is potentially going to be impacted. We want to address the root causes of illegal immigration. We've got to do that in Honduras, El Salvador and Guatemala. And the work that's already going on is going to be impacted by having -- having the funding for State Department being impacted.

So these are -- these are the issues. This is a hard problem. This is a problem that has lasted across multiple administrations. And there's not one simple fix. And we should be going mile by mile, and you need a different tool, different technology at each mile of the border.

BLITZER: Congressman, I know you've got to run. But if your colleagues in the Senate do come up with some sort of compromise agreement, it passes the Senate, do you believe you and your fellow members in the House are going to go ahead and approve it, and do you believe the president will sign it into law, even if it doesn't include $5 billion for a wall?

HURD: Easy answer, I hope so. Not knowing what the details are of this bill or this potential compromise before it comes over here, whether the Democrats in the House are willing to -- to vote for something like that. There's a lot of questions that get asked.

I hope so. I hope we make sure that we continue to fund the rest of the government and make sure that the men and women that are protecting our country in DHS, in State Department, at Treasury, don't have to worry about their paycheck during Christmas.

BLITZER: Want to thank you for your service to the country, Congressman. Merry Christmas to you. Let's hope it's a merry Christmas for everyone. Appreciate your joining us. I know you've got to run for some votes on the House floor. Thanks so much for joining us.

HURD: Thank you, Wolf.

BLITZER: All right. We're waiting for a statement from the Republican leader, the majority leader, Mitch McConnell, and the Democratic leader, Chuck Schumer. Let's see if they've come up with some sort of tentative deal to avert a government shutdown.

We'll take a quick break. We'll be right back.

(COMMERCIAL BREAK)

[17:31:26] WOLF BLITZER, CNN HOST: Following breaking news. As top officials are trying to come up with some sort of deal to keep the government operating after midnight tonight. Looks like they may not succeed, although we're waiting for a statement from the Republican Majority Leader, Mitch McConnell, the Democratic Minority Leader, Chuck Schumer. We'll see if they've come up with some sort of procedural way to move forward. Let's get some analysis from our correspondents and analysts. And David Chalian, it looks like a government shutdown at midnight seems pretty inevitable, unless the president of the United States flips again.

DAVID CHALIAN, CNN POLITICAL DIRECTOR: Yes, and everything that you heard from our reporters seems to be what they're trying to negotiate and hammer out here is more about process than substance. Well, if it's not about the substance, I'm not really sure how we avoid a government shutdown at this point, because there's a pretty big substantive divide between where the president is at and where Chuck Schumer and the Democrats are at -- and those are the key components here at this point, Wolf.

I mean, it is odd, as I was listening to an interview with Will Hurd, the house members are helding -- are sort of holding in suspense, not knowing if they're going to get a bill back. The senate majority leader has been on the floor now for quite some time. But not yet making a statement about which way this is going or what kind of deal is being worked out. And you have the president of the United States tweeting out a picture of a potential fence or steel slats.

BLITZER: Let me show that tweet that the president just posted. And Jeffrey Toobin, I want you to look at this closely. You can see this picture that the president tweeted. And he says, a design of our steel slat barrier, which is totally effective, while at the same time, beautiful. That's what the president is saying. You can see the steel slat barrier -- that's what he's calling it now, he no longer calls it a wall.

JEFFREY TOOBIN, CNN CHIEF LEGAL ANALYST: Yes. Well, I mean, he's trying to give a way for the Senate Democrats to change their position and say, oh, well, we're against a wall but we're for a fence. I mean, I don't think those sorts of semantic games will make much of a difference. But if I could just offer one word in defense of federal workers. You know, I worked for the Justice Department. I was a federal worker. There are hundreds of thousands of people who will be going without a paycheck and working for free for the next couple of weeks, if this thing closes down.

And you know, it's very easy to insult federal workers. But in my experience, they are terrific people, and it is totally unfair that they are being made pawns in this. Now, yes, they may get their money back later in a lump sum. But, you know, most people live paycheck to paycheck and it is simply outrageous that these people are hostages to the political game that's going on.

BLITZER: And you make an excellent point. I'll only put up a graphic and show our viewers some 800,000, if you add the 420,000 that will be working without pay: law enforcement types, border patrol types -- 420,000. They will have to work but won't get a paycheck, at least temporarily. And an additional 380,000, they'll be placed on furlough, meaning they're not working at all. They're not going to be getting any paychecks. We're talking about 25 percent of the federal government. You used to work for the federal government, Samantha. This is a real problem that the lawmakers have to deal with tonight. The president has to deal with tonight, especially on the eve of this Christmas season.

SAMANTHA VINOGRAD, CNN NATIONAL SECURITY ANALYST: Well, Wolf, that's why this whole notion of shutting down the government in the name of security is actually so hypocritical. If we lose 380,000 U.S. government employees, we're literally entering the Christmas season, which is a high-risk season anyway, with a handicap. What other government in the world is losing 380,000 members of its staff and still hoping to project power and to keep its country safe?

[17:35:14] And keep in mind, those 380,000 workers are deemed nonessential. Well, every U.S. government employee or almost every U.S. government employee, I'll leave some at the White House aside, are essential to keeping our nation safe, keeping our economy strong and keeping the engines running. We will be entering a high-risk season at a handicap, and that does not -- should not make any of us feel good from a security perspective.

BLITZER: And there's a lot of other ramifications -- we're talking about people, you know, Laura, don't necessarily appreciate how significant a government shutdown, especially if it lasts more than 24 hours, could be to the overall U.S. economy, as well.

LAURA JARRETT, CNN JUSTICE REPORTER: Absolutely. But from a political perspective, I think Donald trump knows that if this shutdown fight continues into January, he is in a tough spot politically with Nancy Pelosi. She has made it clear, I think, that the border wall is a non-starter. I think Chuck Schumer and Nancy Pelosi have been pretty strong on this. I don't think that they're going to go for this messaging redux with the fence and the slats that the president tweeted out. And so, where does it put him if this continues on? On the other hand, he has conservatives breathing down his neck about

this wall. You have folks like -- on the right like Ann Coulter and Laura Ingraham saying remember your promises, Mr. President. You promised this wall was going to get done. And as you, Wolf, have pointed out all week, Mexico was supposed to pay for it.

BLITZER: Well, they're not paying for it.

TOOBIN: How's that, though?

BLITZER: The former government and the current government, they both say they're not going to pay for it. There is a delegation up on the hill, David Chalian, right now. The Vice President Mike Pence, Mick Mulvaney, acting White House Chief of Staff -- that's the title he wants -- Jared Kushner, the Senior Adviser to the president. They're talking -- they're making statements, but what's uncertain right now is where exactly the president stands.

CHALIAN: Well, and I want to just underline how key this is. This is not Vice President Mike Pence's first time to the hill this week to communicate a message. He did so earlier in the week when he met with Senate Republicans and gave the clear indication that the president of the United States was totally prepared to sign the clean continuing resolution that would fund the government to February 8th as-is, and live to fight another day on the wall. And then, yesterday morning, of course, the president completely flipped because of all of the pressure that Laura just described. So, Mike Pence, even though he is the vice president is not necessarily the most reliable messenger, because this president can change on a dime.

BLITZER: And Republicans are complaining, Jeffrey, that they can't figure out exactly where the president stands. They meet with him. They hear what he's saying. But he's not telling them, I'm going to sign this, but I'm not going to sign that.

TOOBIN: Well, what they should be doing, obviously, is checking with Ann Coulter. Because apparently, she's the president of the United States, as far as this is concerned. I mean, this was a deal. This deal was agreed to. Mitch McConnell, who is nobody's idea of a flaming liberal. Paul Ryan -- everybody thought this deal was done. And you know what? The president lost on the wall, because he didn't have the votes.

But then, you know -- Laura Ingraham and Ann Coulter started challenging the president's manhood and the House Republicans started stamping their feet, and the president decided, no, no, no, I'm going to scream and yell and shut down the government, even though I still don't have the votes. So, I mean, I guess Ann Coulter has to figure out how this is all going to end, because she's the person who is driving the federal government at this point. God help us.

BLITZER: You know, it's interesting, Samantha, because you've spent a lot of time in the Middle East. You understand walls that work, walls that don't work. Let me put that tweet that the president just posted, what he says, the steel slat barrier. There you see the steel fence in effect that the president wants to build. But you know how individuals, if they want to get into the United States from Mexico, get around a fence -- a steel slat barrier like this?

VINOGRAD: Well, first of all, there are spikes at the top of this fence. I feel like if the president Googled middle ages and tweeted something out rather than consulting with actual security experts, or architects about what could work in this kind of scenario, I was in (INAUDIBLE) and I saw the wall in the Palestinian territories between the Palestinian territories and Israel. Benjamin Netanyahu reportedly spoke with the president earlier this week and said build a wall, it will help.

Well, guess what, terrorists and other illegal immigrants in the Middle East do, they build tunnels under walls. Those spikes don't deter that kind of activity. And I just want to point out, the president's own State Department doesn't even think that this wall or steel slats is going to solve the problem of illegal immigration. On Monday they issued a whole strategy for combatting illegal immigration that has nothing to do with the wall and some of those very same employees will be furloughed if this government is shut down.

BLITZER: Israel does have a significant barrier along its border with Gaza. I've been there. I was there during the war in 2014. I also saw the tunnels that were built underneath these kinds of fences, the barriers and it enabled -- the people from Gaza, Palestinians from Gaza to get into Israel through those tunnels, and it's happening right now along the border with Lebanon.

[17:40:16] CHALIAN: You know who else thinks that this is not the most effective way to accomplish this goal? The new acting Chief of Staff, Mick Mulvaney, who's up on the hill trying to negotiate here. You know earlier, CNN reported, he made some comments back in 2015 --

BLITZER: Well, I happen to have that comment. This is Mick Mulvaney, the so-called acting White House Chief of Staff, the Director of the Office of Management and Budget, back on August 25th, 2015. He said in a radio interview, this.

(BEGIN VIDEO CLIP)

MICK MULVANEY, DIRECTOR OF THE OFFICE OF BUDGET AND MANAGEMENT AND ACTING WHITE HOUSE CHIEF OF STAFF: The fence is an easy thing to sell politically. It's an easy thing for a -- someone who doesn't follow the issue very closely to say, oh, well, that will just solve everything, build a fence. The fence doesn't solve the problem. To just say build the darn fence and have that will be the end of an immigration discussion is absurd and almost childish for someone running for president to take that simplistic a view. And, by the way, the bottom line is the fence doesn't stop anybody who really wants to get across. You go under, you go around, you go through it.

(END VIDEO CLIP)

BLITZER: You go up and you go down, you go through. This is -- Jeffrey, go ahead.

TOOBIN: Well, people come in on tourist visas, too. I mean, you know, a lot of the immigration problem is not, you know, people sneaking across the border, it's overstaying visas. You know, if the president wants to -- that looks like a set design from "Game of Thrones" and if he thinks that's going to persuade people that, you know -- to persuade Democrats that, oh, the problem is solved because they have a scary-looking fence instead of a wall.

I mean, it just underlines how preposterous this is. You know, we don't have our public officials, our elected officials design security barriers. We actually have experts on that. And we don't shut down the government of the United States of America over issues like this. You know, you compromise. People -- you know, that's how government is supposed to work. And the idea that this picture is going to change the story is about as absurd as anything that has come forward.

BLITZER: David, this sound bite from 2015 and Mick Mulvaney isn't the only that sound bite that has emerged over the past few days that is irritating the president of the United States, comments that he has made.

CHALIAN: Yes. No, we learned over the last weekend -- again, very critical comments that Mick Mulvaney made about then-Candidate Trump, who he clearly was not supportive of. The response from the --

BLITZER: Calling him a terrible human being.

CHALIAN: A terrible human being. The response from the Mulvaney team in the White House, of course -- he hadn't met the president at that point, he didn't know the president. And now, he does, which is an odd kind of explanation. I'm not sure how long Mick Mulvaney will remain acting Chief of Staff, as stories like this come out. I mean, the K-file, our colleagues, did a tremendous job digging this comment up. I will just note, Wolf, while we're sitting here, they are still huddled on the floor.

This -- what is happening right now in the United States Senate, to me, seems like they're trying to fly a plane without a flight path right now. There doesn't seem to be a clear path forward. This vote is still held open from 12:30 this afternoon, awaiting senators to fly back across the country in what is not at all clear they have the votes to move forward. And there is no indication yet, even though this team from the White House came up there, that there is an actual plan here to move forward and avert a shutdown tonight.

BLITZER: I want everybody to stand by. We're going to have much more on all of the breaking news. We're waiting for a statement from the majority leader in the U.S. Senate, the minority leader, as well. Let's see if there's a development. We'll be right back.

(COMMERCIAL BREAK)

[17:48:27] BLITZER: There's drama unfolding on the Senate floor right now. Manu Raju is up on Capitol Hill. What's the latest?

MANU RAJU, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Well, we expect an agreement to be announced about a way to move forward potentially to avoid the government shutdown any second. Majority Leader Mitch McConnell, Minority Leader Chuck Schumer are going to make an announcement about how they believe a shutdown could potentially be averted. We don't know the details of that yet. That's why the remark is so significant. Just moments ago, two senators who have been holding out all day ended up voting to proceed to a house pass bill that includes the president's $5 billion in funding for the border wall that the president has been demanding.

Bob Corker had not said how he would vote until just moments ago he voted to proceed to this measure. Jeff Flake, the Arizona Republican Senator who voted "no" hours ago out of his frustration with this process, changed his vote to "yes." Now, they should caution. That doesn't mean that this $5 million in funding is going to get approved. In fact, it has no chance of getting approved out of the senate. All this means is that there is a process to advance this conversation forward, try to come forward with some sort of agreement that all sides could reach to move -- to eventually avert a shutdown. Now, the reason why the senators are looking to move forward on this, Wolf, looks like --

BLITZER: I believe the session is being brought to order. Let's listen in.

(BEGIN VIDEOTAPE)

MIKE PENCE, VICE PRESIDENT OF THE UNITED STATES: The following message from the house.

UNIDENTIFIED FEMALE: Resolved, that the house agree to the amendment of the Senate to the amendment of the House, to the amendment of the Senate to the bill HR-695 entitled an act to amend the National Child Protection Act and so forth and for other purposes with an amendment.

PENCE: Majority leader.

SEN. MITCH MCCONNELL (R-KY), SENATE MAJORITY LEADER: Colleagues, here is where we are. It's now clear there are enough votes to proceed to the pending legislation on government funding, disaster relief and border security. Within the Republican conference, there's strong support for the president's reasonable request for more resources to tackle the urgent situation at our southern border.

Republicans support the house-passed bill which includes additional border security funding and we're also, however, eager to complete the remaining appropriation bills which the Senate has already passed. However, obviously, since any eventual solution requires 60 votes here in the Senate, it's been clear from the beginning that two things are necessary: support from enough Senate Democrats to pass the proposal at 60 and a presidential signature.

[17:51:12] As a result, the Senate has voted to proceed to legislation before us in order, in order to preserve maximum flexibility for a productive conversation to continue between the White House and our Democratic colleagues. I hope Senate Democrats will work with the White House on an agreement that can pass both houses of Congress and receive the president's signature. So, colleagues, when an agreement is reached, it will receive a vote here on the Senate floor. I move to concur in the house amendment to the Senate amendment to the House amendment to the Senate amendment to HR-695.

PENCE: The motion is pending.

SEN. CHUCK SCHUMER (D-NY), SENATE MINORITY LEADER: Mr. President.

PENCE: The Democratic leader.

SCHUMER: As we said to President Trump a week ago, his wall does not have 60 votes here in the Senate, let alone 50 votes. That much is now clear. Democrats have offered three proposals to keep the government open, including a proposal offered by leader McConnell that passed the Senate unanimously only a few days ago. We are willing to continue discussions on those proposals with the leader, the president, the speaker of the house and the leader of the house -- all five are necessary to get something done. Yield the floor.

SEN. BOB CORKER (R), TENNESSEE: Mr. President.

PENCE: Senator from Tennessee is recognized.

CORKER: Mr. President, I want to thank the two leaders for what they have done today, and what they have done, even though I know some people tuning in may not understand what just happened, but the understanding that has been reached, I want to thank Senator Flake and Senator Johnson and others, is that we're not voting on anything else in this chamber relative to this issue until a global agreement has been reached between the president and these two leaders and the leader of the house.

So, there won't be test votes, not going to be a tabling vote, and the vice president has been over here with his members negotiating already. What this does, I think, is push this ahead to a negotiation that yields results and does the best we can to keep from shutting down government or if it does shut down shutting down very briefly. So, I want to thank the two leaders for agreeing to go forward in this manner. It allows us to move forward in a positive way, and yet it keeps negotiations alive many on. Only a bill can pass this chamber now that has all of their agreements and I thank them for going forward in this manner.

PENCE: Senator from Arizona.

SEN. JEFF FLAKE (R), ARIZONA: I thank the two leaders for this agreement, and senator from Tennessee, the senator from Alabama, Senator Jones and others who have worked to ensure that the next vote that we have in this chamber will be on an agreement. As Senator Corker said, not a test vote, not a cloture vote. What I wanted to do with not proceeding is to demonstrate that there -- that not all Republicans would be for the house bill either. There is no path forward for the house bill. The only path forward is to a bill that has an agreement between the president and both Houses of Congress. And the next time we vote will be on the agreement, not another test vote. So, with that, I yield back.

SEN. LAMAR ALEXANDER (R), TENNESSEE: Mr. President.

PENCE: The senator from Tennessee.

[17:55:07] ALEXANDER: Mr. President, I ask consent, the following my remarks the senator from Delaware, Senator Coons be recognized.

PENCE: Is there objection?

ALEXANDER: Mr. President, I want to thank Senator Corker, Senator Flake, Senator McConnell and Schumer and the leaders for their discussions, the vice president, I thank him for his presence here today. In my own view, a government shutdown ought not to be a part of budget negotiations any more than chemical weapons should be a part of warfare. We were elected to make the government run for taxpayers, not to shut it down. So, my hope is that this will put us on a path toward a result and recognize the president's desire for increased border security, which we support, which many Democrats support as well and we can finish our appropriations process.

What I'd like to do now is say a few words about what was described in a very famous movie in which Jimmy Stewart played: "Mr. Smith goes to Washington" is democracy's finest show, the right to talk your head off. The legislative filibuster. Unless someone, say, well, Senator Alexander, you just announced you're not going to run for re-election in two years, so you're going to change your tune. I'm not changing my tune. I'd ask consent to include in the record remarks that I made in 2011 at the Heritage Foundation about the tradition of the legislative filibuster, perhaps the best-known part of the United States Senate.

UNIDENTIFIED MALE: Without objection.

ALEXANDER: And I'd like to tell a story, Mr. Vice president. In 1978, a young Utah senator came here. He was conservative. He didn't know what he --

(END VIDEOTAPE)

BLITZER: All right. Well, we just heard the news coming in from the Senate leadership. David Chalian, it looks like they're not going to do anything until there's a deal that is worked out behind the scenes between the Republican leadership, the Democratic leadership in the Senate and the house, and the president of the United States.

CHALIAN: We should make clear what just happened there, is that there was a 47-47 tie. The reason you saw Vice President Pence in the chair is that he broke that tie as the 48th vote. So, now, Donald Trump has, I guess, a moral victory to say, hey, I got the house to pass this $5 billion inclusion for the wall and now the Senate just with the tie and Vice President Pence, now they're on the bill. Except, what was just made clear by Flake and Corker, who joined to allow them to get to this place and start debating this, no more show votes.

The next thing they're willing to vote on is actually a comprehensive agreement. So, they're not going to let, it sounded like, the president say: "no, no, we have to demonstrate we have enough muscle here." No more of that. Now, the only thing the Republicans are telling Leader McConnell is the next thing to vote on is a comprehensive deal that keeps the government open and keeps the funding in place.

BLITZER: And a comprehensive deal would require 60 votes in the United States Senate, not 50 or 51. Steny Hoyer is with us, the incoming House Majority Leader, the House Democratic Whip. So, you just heard what they said, your colleagues in the Senate, Congressman. What is your reaction?

REP. STENY HOYER (D), MARYLAND: Well, I hope they get a deal and I hope they can get a deal that will get 60 votes. And if they do, we'll review it, and if it gets 60 votes in the Senate, we'll probably have a pretty good chance of passing the house. But, of course, they did pass a bill that had over 60 votes. A matter of fact, unanimously, which we thought had the president's agreement as well, and the part of this deal is that the president agrees to it, which is obviously what has been holding up the present deal.

But in any event, I'm hopeful that they can reach agreement. And I'm confident, however, that when Senator Schumer says there's not going to be money for the wall in there that there will not be money for the wall in there. That's the only thing that's been hanging this up, Wolf, as you know. The public ought to understand, we're talking about seven Republican appropriation bills that need to be passed, and that we have agreed to pass and vote for those seven bills. They're Republican bills, but nevertheless Democrats wanted to make sure that we passed the homeland security bill and the other six bills. We're in agreement to vote for it. But, unfortunately, the Republicans did not put that bill on the floor. They put an amended bill on the floor, which included wall money which we had said we wouldn't support. We don't think it's effective --

BLITZER: Do you think, congressman -- do you think, congressman, that President Trump will back down on his request for $5 billion for border wall funding after all of this?

[17:59:57] HOYER: Wolf, I don't know the answer to that question. I, frankly, think nobody knows because, again, we remember some 72 hours before, maybe 96 hours before, the vice president came down to the United States Senate and said that the bill that Mitch McConnell passed through the Senate would be signed by the president.