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Democratic Leaders React to Partial U.S. Government Shutdown; Mattis Resigns over Policy Disputes with Trump; Conservative Critics Hit Out at Republicans, Trump; Police Arrest Two over Gatwick Drone Incidents; Thousands in Hungary Protest over "Slave Law". Aired 3- 3:30a ET

Aired December 22, 2018 - 03:00   ET

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

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CYRIL VANIER, CNN ANCHOR (voice-over): Closed for a lot of its business; the U.S. federal government is partially shut down over Mr. Trump's promise to build a border wall.

Beyond politics, the real impact of a wall: my guest crunches the numbers and tells us whether it would really deliver.

Plus all flights are a go: Gatwick Airport aims to resume a full schedule after police arrest two suspects in the investigation of the drones that caused a temporary airport shutdown.

Live from the CNN Center here in Atlanta, I'm Cyril Vanier. It is great to have you with us.

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VANIER: We're three hours into a partial U.S. government shutdown. The third time that the federal government has shutdown this year. It is affecting hundreds of thousands of federal employees and the numerous agencies that they serve.

Lawmakers left Washington on Friday without a bill to fund the government by the midnight deadline. They're deadlocked over Trump's demand to fund a border wall, which Democrats oppose.

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TRUMP: Call it a Democrat shutdown or what you want. We need their help to get this approved. Democrats, we have a wonderful list of things we need to keep the country safe. Let's get out and work together and let's be bipartisan and let's get it done. The shutdown hopefully will not last long.

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VANIER: President Trump's Democratic opponents, Senate minority leader Chuck Schumer and House Democratic leader Nancy Pelosi, just issued a new statement about the shutdown. After eight years in the minority, their party is set to regain control of the House in January, thanks to the midterm elections.

Their statement reads, in part, "If President Trump and Republicans choose to continue this Trump shutdown, the new House Democratic majority will swiftly pass legislation to reopen government in January."

The senators are expected to return to the Capitol in the coming hours to continue their shutdown talks.

Our Jim Acosta explains how they reached this point and the impact it is having.

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JIM ACOSTA, CNN SR. WHITE HOUSE CORRESPONDENT (voice-over): In Washington, it is a chaos Christmas, as President Trump warned he is ready to shut down the government if Congress doesn't give him the billions of dollars he's demanding for a wall on the border.

TRUMP: The chances are probably very good.

ACOSTA: Instead of taking responsibility for the shutdown, the president took to Twitter to blame it all on the Democrats.

TRUMP: It is up to the Democrats, so it is really the Democrat shutdown, because we have done our thing.

ACOSTA: But watch out. With 800,000 federal workers impacted by the shutdown just before Christmas, the president is pulling a fast one; 10 days ago, Mr. Trump told Democratic leaders he was willing to own a shutdown.

TRUMP: I am proud to shut down the government for border security, Chuck. 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. And I'm going to shut it down for border security.

ACOSTA: Senate Minority Leader Chuck Schumer told the president it is time to give up.

SEN. CHUCK SCHUMER (D-NY), MINORITY LEADER: President Trump, you will not get your wall. Abandon your shutdown strategy. You are not getting the wall today, next week or on January 3, when Democrats take control of the House.

ACOSTA: Some Republicans conceded they weren't really sure how to end the standoff.

SEN. JOHN KENNEDY (R), LOUISIANA: We're trying to work it out right now, mostly through trial and error, more error than trial.

ACOSTA: Even one of the president's top advisers, incoming Chief of Staff Mick Mulvaney, once conceded a border wall or fence is hardly the only way to solve the immigration issue. MICK MULVANEY, WHITE HOUSE BUDGET DIRECTOR: The fence doesn't solve the problem. Is it is it necessary to have one? Sure. Would it help? Sure. But to just say, build the darn fence and have that be the end of an immigration discussion is absurd and almost childish for someone running for president to take that simplistic a view.

ACOSTA: Much of Washington is still reeling from the sudden resignation of Defense Secretary James Mattis, seen outside the White House today shaking hands with outgoing Chief of Staff John Kelly.

CNN has learned the president is angry over the secretary of defense's resignation letter, which took issue with Mr. Trump's go-it-alone foreign policy. A source close to the White House says the president hates the letter, but hates the news coverage of the letter even more.

That's in part because of the conventional wisdom that Mattis served in the administration as a check on the president's impulses.

SEN. SUSAN COLLINS (R), MAINE: I'm very concerned about Secretary Mattis' decision to leave the administration. He brought a wealth of knowledge and understanding to the position.

ACOSTA: Lawmakers from both parties are raising serious concerns.

SEN. MARK WARNER (D), VIRGINIA: It feels like the wheels are coming off and I think a lot of that may be due to the fact that the Mueller --

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WARNER: -- investigation is getting closer and closer.

ACOSTA: Mattis left in part over the president's sudden decision to pull U.S. troops out of Syria, a move that didn't go over well on one of the president's favorite TV shows.

QUESTION: Sarah, he is giving Russia a big win. Vladimir Putin praised him. He is also doing exactly what he criticized President Obama for doing. He said President Obama is the founder of ISIS. He just refounded ISIS.

SARAH HUCKABEE SANDERS, WHITE HOUSE PRESS SECRETARY: Brian, Brian, I have to respectfully and vehemently disagree with you. The idea that the president has had anything to do with helping ISIS reemerge is absolutely outrageous.

QUESTION: Leaving is helping. Leaving is helping.

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VANIER: That was Jim Acosta's reporting here. Here's a look at what is at stake: at least 420,000 employees will be expected to work without pay until lawmakers make a deal; about 380,000 will be placed on furlough as we head into the holidays.

Essential services like Social Security will still get funded. The mail will still be delivered. Federal employees that keep people safe, like the military and law enforcement officers, will also keep working.

Joining me from Los Angeles are Democratic strategist Dave Jacobson and Republican commentator John Thomas.

Gentlemen, the first question of any shutdown, who is responsible for it?

That's just Shutdown 101. On this very question, let's hear the president's thoughts last week and then just a few hours ago.

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TRUMP: I'm happy to shut down the government for border security. I'll be the one to shut it down.

It is up to the Democrats. It is the Democrat shutdown.

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VANIER: Is it a Trump shutdown or a Democrat shutdown?

DAVE JACOBSON, CNN COMMENTATOR: I think the opinion research out there provided hard data that shows that this is the Trump shutdown. Morning Consult and Politico put out a poll just this Wednesday that gave Republicans a 10-point edge in terms of the blame; 41 percent to 31 percent of the blame for Democrats.

Similarly, Cyril, just last week Quinnipiac put out a poll that had 51 percent of the blame going to Donald Trump and Republicans and only 37 percent to Democrats. That's a whopping 14-point gap.

And so clearly the data suggests that the American people will blame Trump for the shutdown.

VANIER: John, the president is in a bind. He said himself just last week, I will own this.

JOHN THOMAS, CONSERVATIVE COMMENTATOR: Yes, it's a big of a fluid situation, actually, because last week, you're right, the shutdown would have been solely the president's responsibility.

But look how the House GOP rallied and got through a bill to put a bill on the Senate floor. In order to get this Senate bill passed and reopen up the government, it takes Democratic votes. So in a way now it's the Democrats saying they won't support the bill and that is causing the shutdown.

VANIER: I wonder whether perhaps the answer to whose shutdown it is, the elusive answer isn't somewhere else entirely. I want to show you why.

Earlier this week, the president was actually backing away from shutting down the government. Then on Thursday this happened.

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RUSH LIMBAUGH, TALK SHOW HOST: The Republicans are bowing down apparently. Even though we allocate money we need for criminal justice reform or Planned Parenthood or whatever the hell else liberal cause is clamoring for your tax dollars.

ANN COULTER, ULTRACONSERVATIVE COMMENTATOR: It will be a joke presidency that scammed the American people, enraged -- amused populists for a while. He'll have no legacy whatsoever.

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VANIER: So we just heard ultraconservative commentators Limbaugh and Coulter who want a border wall and were more than willing for the government to be shut down, calling out the president.

The next thing you know, Thursday, the president does a total 180 and says he's willing to shut down the government.

John, is this actually a Limbaugh or Coulter shutdown?

THOMAS: That's interesting. You also didn't mention that the president unfollowed Ann Coulter on Twitter yesterday as well. Clearly he was upset.

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VANIER: I just want to make sure the international audience understands, these commentators are believed to hold a lot of weight with Trump's base. I just want to throw that out there.

THOMAS: Yes, Rush in particular is the largest conservative talker in America.

I think what these talkers did to Trump is to remind him of this fundamental campaign promise he made. If he doesn't deliver on the promise, people say Trump's base will never leave him.

Well, these conservative commentators are making the argument, if you don't do everything within your power to make good on the promise, your base may just leave you. Without his base, he has no path in 2020.

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VANIER: That's really interesting because we have spent two years of this presidency wondering where the red line is and where Trump's base leaves him. You make an interesting point. This may be it.

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THOMAS: And it is not going to get any easier when the Democrats take control of the House. They are not going to give Trump his wall. It is now or never.

VANIER: David, we found Trump's red line? JACOBSON: Perhaps. I mean, look it is clear that the -- that the Trump presidency is crumbling. It is in a downward tailspin. You had the Defense Secretary James Mattis leave and Mitch McConnell and Ben Sasse and Lindsey Graham come out and issue scathing statements on this news.

So I think you're starting to see a splintering within the Trump base. Perhaps that's why he's digging his heels in. He's scared. You have a Democratically controlled Congress coming in and talk of a potential impeachment.

He's looking to 2020 and he knows he has to solidify that base. Here's the challenge. Public opinion is against this wall. CBS News put out a poll last month; 59 percent of the Americans oppose the wall.

But the interesting tidbit there is across the tabs, among independents, a whopping 66 percent of independents, those are those persuadable undecided voters that ultimately will determine the 2020 election, 66 percent oppose the wall.

He won't get reelected in 2020 with just this 35 percent solidified base. He needs independent voters to be propelled beyond 2020. Clearly he's losing their support.

VANIER: David Jacobson and John Thomas, thank you so much.

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VANIER: -- but he's got another name for it now.

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TRUMP: There's a debate over funding border security and the wall. Also called, so that I give them a little bit of an out, steel slats. We don't use the word wall necessarily. But it has to be something special to do the job, steel slats. I've made my position very clear. Any measure that funds the government must include border security. Has to.

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VANIER: "Steel slats." President Trump's showing the world what he means by that. He tweeted this a few hours ago.

"A design of our steel slat barrier which is totally effective while at the same time beautiful."

The president's words. So for the full effect, just train your eyes on the zoomed-in part for the top of the slats, those sharp spikes.

Melanie Morten joins me, she's an assistant professor of economics at Stanford University.

Melanie, you recently cowrote a study about how effective a border wall really is. Since the U.S. is shutting down the federal government over a border wall, it seems like the right time to have you on.

Specifically you looked at the effect of the wall that was built under George W. Bush in the late 2000s, 550 miles of wall. And one of the first questions you asked was whether it actually stops people from crossing the border.

What did you find?

MELANIE MORTEN, STANFORD UNIVERSITY: Cyril, thank you so much for having me today. As you said, there's a very active debate about building the wall on the U.S.-Mexico border.

For the most part, this debate misses the fact that the U.S. already has walls along one-third of the border. So we study the Secure Fence Act, which resulted in about 150 miles of fence being built between 2007-2010.

This was at a cost of about $2.3 billion or $7 per person. So using economic data, we arrived at three findings.

First, we found that the wall led to very small reductions in migration. In fact, migration fell by only 0.6 percent.

VANIER: All right, well, hold on, 0.6 percent reduction in migration?

Overall migration into the United States?

MORTEN: Yes, that's correct, 0.6 percent reduction --

VANIER: That's nothing.

MORTEN: It is very, very small effect.

VANIER: Could it be -- so you mentioned the wall is only built along -- currently along a third of the U.S.-Mexico border.

Could it be simply because there's still two-thirds of the border open?

MORTEN: One of the key advantages about our study is we were able to observe the data on what actually happened with the policy that was implemented. We could focus on the fence that was built as a result of a Secure Fence Act.

Extrapolating to a different setting would be an extrapolation from -- from our data. One exercise we do in the paper is that we consider whether or not there may be some nonlinearities connected to the wall.

So for example, we do account a factual when we find half of the remaining gap in the U.S.-Mexico border, and then we find that the wage gain from low skilled workers would go up slightly from our estimated effect of only --

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MORTEN: -- 36 cents to 58 cents. That's still well below the $7 purpose and cost to build the wall, not to mention any of the additional costs for an extra wall.

VANIER: All right, let me backtrack. Because those two numbers are new. You're telling me that the wage gain for low income workers in the U.S., the wage gain of building a wall is 36 cents, what, per year?

MORTEN: Exactly. The second finding of our paper, we wanted to study the effects of the wall. There was a large expansion on U.S. workers. We found that college educated workers came out the worst. They lost $4.35 in annual income. Low skilled workers, those without a college degree, saw a gain of just 36 cents per year.

However, this 36 cents pales in comparison to that $7 purpose and cost to build the wall. So in other words, both low skilled and high skilled workers would have been better off just getting that $7 in their pocket.

VANIER: OK, you mentioned there were three findings. Is there a third one?

MORTEN: The third finding was, given that we found that the wall harmed the U.S. economy, we wanted to study alternative policies that could both reduce migration and increase the wages of U.S. workers.

So to do that we focused on trade policy and we focused on reducing the cost of trade between Mexico and the U.S. We found it would lead to income gains for both low skilled and high skilled U.S. workers and reducing the cost of trade would also reduce migration from Mexico.

Because it would help to raise wages there and so that would reduce the need for Mexicans to leave.

VANIER: OK, Melanie, I want to recap this. You studied what happened last time that the U.S. built a significant stretch of wall, roughly 10 years ago. And your study found that it barely impacted migration. It was down less than 1 percent.

And you found that it actually cost money to U.S. taxpayers, both low income and high income. So everybody would end up with less money in their pocket as compared to before the wall was built.

Am I reading this right?

MORTEN: That's exactly right. We find that high skilled workers lost $4 per year in their income; low skilled workers saw a gain of 36 cents per year. But given that the wall cost $7 to build, in net terms, those low skilled workers would be better off to get the $7 in their pocket.

VANIER: All right, Melanie, thank you so much. This is really interesting and useful information to have, as we're about to see a lot of politicking going on about this very issue of building or not building a wall. Melanie Morten, thank you very much.

MORTEN: Thank you, Cyril, so much for having me. Thank you very much. VANIER: President Trump is reportedly so angry with his own appointee at the U.S. Federal Reserve that he discussed firing him. Bloomberg reports that Trump got frustrated with Fed chairman Jerome Powell after this week's interest rate like and ret stock market losses.

Trump often points to rising markets as proof of his economic leadership. By that measure, it has been a brutal week. The Dow closed Friday, down 414 points for the week. That means it fell 6.9 percent, the deepest weekly plunge since the recession in 2008.

The tech-heavy Nasdaq lost almost 3 percent on Friday. And it's now in bear market territory. The S&P 500 dropped 2 percent.

Open, closed, opened, closed, opened -- that's in two days for one of the U.K.'s busiest airports. We have new details on the people that were possibly causing the chaos.

Plus protests in the streets of Budapest: a labor law that sparked days of unrest and united political parties on the Right and the Left. Stay with us.

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VANIER: Police have arrested two people over the string of drone sightings near London's Gatwick Airport. The incidents first started Wednesday when drones spotted fling dangerously close to the runways forced a 32-hour shutdown of the airport. It briefly closed again on Friday after yet another drone sighting.

Let's get over to Anna Stewart, she's at Gatwick Airport.

Anna, before you tell us about the investigation, I know two men have been arrested -- two people have been arrested.

First of all, what is the flight situation today?

ANNA STEWART, CNN CORRESPONDENT: The runway is open for business. You may hear some flights taking off and landing behind me. Today we expect a full schedule, there could be some delays. It'll be over 750 flights carrying over 124,000 passengers. There may be some delays. That's just the knock-on effect over the last few days. It's been absolutely chaos but the planes are in their own places, as you can imagine, crews are all over the shop as well.

So Gatwick said you must check in with your airline before you actually come to the airport, just check it's on time. You don't want to spend unnecessary time here. Some people have spent a lot of time here. Some people actually waited some 30 hours over the last few days because this started Wednesday night at 9 o'clock. It closed the runway for the entire that night and then closed the runway the entire of Thursday. We were back open for business yesterday but as you said, it did shut down for a short period, about 45 minutes because another drone was spotted around 5:20 local time yesterday afternoon.

So that caused momentary chaos. But because of all the measures now in place, they were able to reopen the runway. They believe it was safe. Passengers were able to get off after all. They definitely managed things quite well here, even with the drones. Hopefully we don't see any today.

VANIER: You have to feel for the people who had flights canceled or even delayed. You said 30-hour delay. People don't want to spend 30 hours in the airport the days before Christmas.

You mentioned safety, have the police caught the people that flew the drones?

STEWART: I really hope so. We know that two men have been arrested in connection with the investigation. We don't know more than that. We expect a press conference soon from the Sussex police who oversee this area.

Let me review a statement. The police said, "Our investigations are still ongoing and our activities at the airport continue to build resilience to detect and mitigate further incursions of drones by deploying a range of tactics."

I asked some of the officers yesterday about the tactics. Compared to Wednesday night and on Thursday even, by yesterday morning, they had a whole range of options they could use both to detect the drones and also to mitigate the risks around them.

Now they won't tell me what some of the more sophisticated options are. They simply don't want to share that information with perpetrators or anyone else who'd be tempted to do this sort of thing. They also said many more unsophisticated options are on the table yesterday. They were talking about a potential shooting down of drones as long as there was no risk of danger to the public.

So they are dealing with it in a much better way now -- Cyril.

VANIER: We hope that's over. Anna Stewart reporting live at Gatwick Airport, we'll speak to you again today.

If you're just joining us, though, the main message for the viewers is, Gatwick has announced and is expecting a full flight of schedules. But call ahead, call to your airline. Make sure that your flight isn't delayed.

Anna, thank you very much.

In Hungary, protests have been growing in recent days over the government's so-called slave law. Demonstrators took to the streets again on Friday, denouncing a law that allows employers to demand up to 400 overtime hours a year from workers. CNN's Ben Wedeman has the latest.

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BEN WEDEMAN, CNN SR. INTERNATIONAL CORRESPONDENT (voice-over): Rowdy protesters fill a bridge over the Danube --

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WEDEMAN (voice-over): -- dancing and marching on the office of the president of Hungary. The march is peaceful; the message to prime minister Viktor Orban is unambiguous.

UNIDENTIFIED FEMALE: And we want Viktor Orban to get the hell out of here. And we want democracy again. And we want people to get power back.

WEDEMAN (voice-over): What sparked more than a week of demonstrations is an amendment to the labor code sponsored by the prime minister's ruling Fides party. The amendment is widely derided as the slave law.

WEDEMAN: These protests are not about populism or nationalism, they're about the basic rights of working people. The slave law would mean many people would feel compelled to work as many as 400 hours of overtime a year and possibly not get paid for that overtime for three years after that.

The government says it is a great opportunity for people to earn more money. But the reaction of many people here in Budapest, they say they could earn more money but they won't have much of a life.

WEDEMAN (voice-over): The effect of the law would be to reintroduce a six-day workweek. Prime minister Orban has clashed with the European Union over his autocratic ways.

He's managed to gain control of much of the media and is stridently anti-immigration. Parties on the Right and the Left have suddenly found a common cause. In front of the president's office, speakers from the nationalist right and the far left railed against the government. Andras Fekete-Gyor leads the Momentum movement, a pro- European liberal party.

ANDRAS FEKETE-GYOR, MOMENTUM MOVEMENT LEADER: I think that they didn't expect the opposition and the people to get so upset about this situation.

WEDEMAN (voice-over): After eight years of Orban's rule, change may be here.

UNIDENTIFIED MALE: Either he's leaving for eight years and this is a time we woke up.

WEDEMAN (voice-over): With the racket they're making in the streets, it will be hard for Hungary's current government to have any peace -- Ben Wedeman, CNN, Budapest.

(END VIDEOTAPE) VANIER: One more thing before we wrap this up. The annual Christmas lottery in Spain, known as El Gordo, the Fat one, it is underway. The drawing is considered the biggest lottery jackpot in the world.

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VANIER (voice-over): There's a very specific protocol to it. School children pull the numbered balls out of two large revolving spheres.

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VANIER (voice-over): You heard that. They have to sing the corresponding numbers written on each ball. Now the Fat One itself, that's the final winning number, is potentially worth 2 billion euros, although this prize is usually spread across thousands.

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VANIER: That's it for CNN NEWSROOM. I'm Cyril Vanier and I have the headlines in a moment.