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CNN NEWSROOM

Democratic Leaders React to Partial U.S. government Shutdown; Protesters Gather in France for Sixth Straight Weekend; Police Arrest Two over Gatwick Drone Incidents; U.S. Stock Markets Continue to Tumble; Trump Lashes Out at Acting AG Whitaker over Cohen Case; Mick Mulvaney in 2015 Calls Border Wall "Simplistic"; Justice Ginsburg Has Cancer Removed from Lung. Aired 5-6a ET

Aired December 22, 2018 - 05:00   ET

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


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NATALIE ALLEN, CNN ANCHOR (voice-over): For the third time this year the U.S. government partially shuts down, why lawmakers refuse to give President Trump what he demands.

GEORGE HOWELL, CNN ANCHOR (voice-over): In the United Kingdom, Gatwick Airport fully reopens after a series of drone sightings forced it to shut down. British police say they've made arrests.

ALLEN (voice-over): Also the U.S. markets sink to their lowest since the 2008 recession. We asked an expert what this means for the economy for next year.

HOWELL (voice-over): In Texas, we say, that ain't pretty.

Live from CNN World Headquarters in Atlanta, welcome to our viewers here in the United States and all around the world. I'm George Howell.

ALLEN (voice-over): And I'm Natalie Allen. CNN NEWSROOM starts right now.

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ALLEN: That is our top story, we are five hours into a partial U.S. government shutdown and it is affecting hundreds of thousands of federal employees and the numerous agencies they serve.

HOWELL: Here's the thing. Lawmakers left Washington on Friday, just days before the Christmas holiday without a bill to fund the government by this midnight deadline that's already passed. They're deadlocked over the president's demand to fund a border wall, a wall that Democrats oppose. Listen.

(BEGIN VIDEO CLIP)

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

(END VIDEO CLIP)

ALLEN: President Trump's Democratic opponent, Senate minority leader Chuck Schumer, and House Democratic leader, Nancy Pelosi, issued a new statement about the shutdown a short time ago. After eight years in the minority, their party is set to regain control of the House in January because of the midterm elections outcome.

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

U.S. senators are set to return to Capitol Hill in the coming hours. Their talks will be very important for people who want to know whether they will be paid or not.

ALLEN: Our Phil Mattingly explains how they reached this point and the impact.

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PHIL MATTINGLY, CNN U.S. CONGRESSIONAL CORRESPONDENT: Well, they're in it now. The White House, Congress, Washington is now officially in a government shutdown or at least a partial government shutdown; 25 percent of the federal government no longer has money to function.

The question, the biggest question is, how do they get themselves out of it?

The reality, when you talk to individuals actually involved in the negotiations, there's no clear end anytime soon. Here's the baseline this started with.

President Trump made very clear a couple of days ago that $5 billion for the wall was his baseline. Anything lower than that, he was not willing to accept. Democrats had made clear that the president already said this would be his shutdown; if it shuts down, it's President Trump's fault.

They feel no incentive to come to the table and give in any way for any type of border wall funding. Here's what we know at the moment.

Negotiations did start in earnest and White House officials coming up to Capitol Hill, going back and forth for a couple of hours, trying to figure out if there was some path forward. But those negotiations have not yielded what I'm told anywhere close to an agreement. They're billions of dollars apart with no clear end game in sight.

So the big question becomes, how does this end?

Sources I'm talking to on Capitol Hill say they don't have a good answer right now. Essentially somebody has to blink, somebody at the White House, the president has to blink, cave, basically agree to potentially go forward with what the Senate passed in a unanimous manner, in a bipartisan manner earlier in the week, a clean stopgap bill with no border wall funding.

Or Democrats would have to blink, start moving toward the president, start trying to fund the wall or at least put money toward that. The latter is certainly not an option from the Democratic perspective and the president hasn't shown any sign that he wants this fight to end anytime soon.

So with all that in mind, as lawmakers went home on Friday and considered whether or not they were even going to come back on Saturday, the reality remains this: 25 percent of the government is shut down. A clear solution is not currently in the offing and there's a very real possibility this goes on, not for hours but potentially for days -- Phil Mattingly, CNN, Capitol Hill.

(END VIDEOTAPE)

ALLEN: Here's some information on what parts of government are shut down. At least 420,000 employees will be expected to work without pay until lawmakers make a deal. About 380,000 employees will be placed on furlough as we head into the holidays.

HOWELL: And essential services like Social Security will continue to be funded. The mail will continue to be delivered. Federal employees who keep people safe, like military --

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HOWELL: -- and law enforcement, they will continue to work.

ALLEN: Let's talk more about it. Richard Johnson is in Lancaster, England. He's a lecturer in U.S. politics and international relations at Lancaster University.

Richard, always great to have you with us. Thanks for giving us the time and good morning to you. The president promised a shutdown if the border wall wasn't funded and he said it would be on him if that happened. He's got his wish. However, now he's blaming Democrats for the shutdown.

Who's looking worse here?

RICHARD JOHNSON, LANCASTER UNIVERSITY: Well, they're talking to different audiences. That's the key thing to always remember with President Trump, that he's first and foremost thinking about his base.

Nearly nine in 10 Republicans support a border wall and two-thirds of Republicans in a recent poll said they would support shutting down the federal government to get that border wall.

So even though a majority of Americans don't support a border wall at all and certainly don't support a government shutdown to achieve one, when it comes to the voters about whom Trump cares the most, Republican primary voters and his key supporters in those key states, he's delivering for them or he's doing what he thinks they want him to do. And that's the key thing to remember.

ALLEN: Right. And let's talk now about how we got here and who might have prompted the president to stick to his guns. He was reportedly influenced by conservative commentators, who chastised him severely for not demanding funding for the wall midweek. Let's take a listen.

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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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ALLEN: We know how closely president follows these commentators. So despite the Republicans and Democrats initially working out a deal to keep the government going and the president agreeing, he then changed his mind. He balked.

How does that make the president look, strong or weak?

Again, I know what you're going to say; well, it depends on who we're talking about.

JOHNSON: And that's it. I mean I think one thing that is interesting is that I think the president clearly has these almost, you know, what we would call in Europe as sort of a whipping system, a party whipping system, ideological whipping system that goes on in the conservative media, where if, you know, Trump is, I think, at the end of the day, is a fairly ideological flexible individual and we can just look at the positions he's taken on various matters at different times in his life.

But I think he has this conviction, this sense that he is there in the White House because he took these particular lines on these particular issues, particularly on immigration and border security.

And I think that these commentators serve to remind him of that and to sort of, you know, make sure that he falls back into line.

Now as a matter of leadership, that may not look particularly inspiring. But on the other hand, there's a matter of, well, at least Trump believes it's the correct political calculus for his survival. You know, it's not necessarily a crazy strategy to have.

ALLEN: And so the question is, where does this go from here?

The holidays are here, Christmas a few days away and the government is partially shut down.

What do you think will be the fallout from the American people over this situation?

JOHNSON: I think in the past, it used to be clearer that the American public would identify a key set of actors and blame them for the shutdown. It was usually Congress who would get blame for the shutdown.

I think we've moved into such a polarized context in American politics now that I think that Democrats will blame President Trump and Republicans will blame congressional Democrats. And so, in the end, it becomes a kind of impasse.

You know, the longest shutdown was the 1995 shutdown; that lasted for three weeks, 21 days. Donald Trump said that he imagines this shutdown could last for a very long time. I think he actually wants it not to last for very long because when the Democrats take control of the House in January, they gain a lot more leverage on this than they currently have. Their leverage at the moment is just their ability to filibuster in the Senate.

When they have control of the House, it's going to be much more difficult for Donald Trump to get anything --

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JOHNSON: -- close to what he's asking for at the moment.

ALLEN: We always appreciate your insights. Richard Johnson, joining us from Lancaster. Thank you, Richard.

JOHNSON: Thank you.

HOWELL: It is interesting, though, this issue of the wall. It is central to the president's campaign. It's what's got him into office. Now he seems he is under pressure as the Democrats take over the House, under pressure to get some traction on it.

ALLEN: It's a tall order, so to speak.

HOWELL: Indeed.

Now for the resignation heard around the world. The U.S. Defense Secretary, James Mattis, tendered his resignation this week. A source says President Trump hates the two-page letter.

ALLEN: The source also says it angers the president to hear Mattis described as the adult in the administration, in the room, who kept Mr. Trump's impulses in check. More about this from CNN's Jim Sciutto.

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JIM SCIUTTO, CNN CHIEF U.S. NATIONAL SECURITY CORRESPONDENT (voice- over): Defense Secretary James Mattis surprised President Trump when he handed him his resignation letter, according to sources.

CNN has learned that Mattis showed up at the White House to make one last attempt to change the president's mind on withdrawing U.S. troops from Syria. When the president would not relent over the course of a 45-minute meeting, Mattis resigned.

It is a departure that has sent shockwaves across Washington and the world. His resignation came just one day after Trump announced a withdrawal of U.S. forces from Syria and the same day sources told CNN that Trump is also planning to withdraw thousands of service members from Afghanistan.

Secretary Mattis losing on two major military decisions. In his stunning letter, Mattis wrote -- quote -- "One core belief I have always held is that our strength as a nation is inextricably linked to the strength of our unique and comprehensive system of alliances and partnerships."

Specifically, Mattis was livid about the abandonment of U.S.-backed Kurdish fighters in Syria, who are still battling ISIS and who could face a bloodbath from a Turkish invasion, according to sources.

TRUMP: General James "Mad Dog" Mattis. He doesn't lose.

SCIUTTO: The rift between the president and Defense Secretary Mattis had been building for some time.

According to a senior defense official, some in the Pentagon say the president had stopped listening to Mattis a long time ago.

In his letter, Mattis brings up -- quote -- "China and Russia," writing -- quote -- "I believe we must be resolute and unambiguous in our approach to those countries whose strategic interests are increasingly in tension with ours."

The president, seeming to rebut that line this morning via Twitter, writing -- quote -- "There has never been a president who has been tougher, but fair on China or Russia, never. Just look at the facts."

TRUMP: If Putin likes Donald Trump, I consider that an asset, not a liability.

SCIUTTO: The American troop withdrawals, along with Mattis' resignation, have left America's allies in Europe and across the world stunned.

SUSAN GLASSER, CNN GLOBAL AFFAIRS ANALYST: This is a day that America's allies had been dreading and fearing and hoping wouldn't come.

SCIUTTO: And even some of the president's staunchest allies at home not pulling punches.

REP. JIM BANKS (R), INDIANA: Secretary Mattis' departure, obviously, that is devastating news to our national security and to the Pentagon.

SCIUTTO: As for Mattis' potential replacement, finding someone for the job on the same page as the president could be difficult.

GEN. JAMES "SPIDER" MARKS, CNN MILITARY ANALYST: There are talented individuals that will come forward.

The real essence of the question is, are they going to want to raise their hand and say, yes, I will take this job?

SCIUTTO: Jim Sciutto, CNN, Washington.

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ALLEN: Sources tell CNN President Trump is lashing out at his hand- picked acting attorney general, Matt Whitaker. Mr. Trump is reportedly frustrated that Whitaker isn't doing more to control federal prosecutors in the case against his former lawyer, Michael Cohen.

HOWELL: Prosecutors in New York are implicating President Trump in hush money payoffs to two women. President Trump is upset that it makes him look bad. Sources say Mr. Trump wants the Justice Department and his attorney general to protect him personally.

A rough week on Wall Street. Recent troubles seem to be getting worse. U.S. stocks fell again this week and could soon post numbers not seen since the Great Depression. More on the market woes ahead.

ALLEN: Plus, open and then closed and then closed again. A confusing few days for one of the U.K.'s busiest airports all because of mysterious drones. We'll have the latest for you.

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HOWELL: Yellow Vest protesters are again gathering in Paris and at Versailles this hour. It's the sixth straight Saturday of national demonstrations taking place in France. The Yellow Vests say they're living in impossible economic situations with crippling high taxes and a heavy burden on working class people.

Now their movement is spreading beyond France's borders.

ALLEN: In Taiwan, crowds in yellow reflective gear marched against their country's opaque tax system. They plan more protests on Saturday.

Demonstrators tried to block roads in Portugal's capital city on Friday.

And Israel expects to see similar protests against the high cost of living in Tel Aviv.

Police have arrested two people finally over the string of drone sightings near London's Gatwick Airport this week. The incidents first started Wednesday, when drones spotted flying dangerously close to the runways, forced a 32-hour shutdown.

HOWELL: The airport closed again briefly on Friday, this after another drone sighting. Gatwick aims to run a full schedule of flights on Saturday. Let's get live to Gatwick. Our Anna Stewart following the story this hour.

Anna, good to have you.

So the question at this point is, what is the latest on this investigation?

We understand there have been arrests.

What more do we know?

ANNA STEWART, CNN CORRESPONDENT: So currently, George, all we know is two people have been arrested in connection with the investigation. We don't know, you know, who they are, anything about them. They haven't actually been charged yet.

So what the police told me and I'll bring this up is 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.

The police, in speaking to them yesterday, said they have a whole range of options on the table to deal with the situation that they didn't have earlier in the week. As a result, a drone was spotted at 5:20 yesterday afternoon but the runway was only shut for one hour and passengers were able to get off, their safety was assured.

So it does seem to be working at this stage. Hopefully, we don't get any more drone sightings. Hopefully the people they've arrested are the two people behind the entire things and passengers can go and enjoy their lovely holidays or get home in time for Christmas.

HOWELL: Hopefully that is the case, Anna. Here's the thing. This is a bigger issue. Two people arrested, great. But so many other people get drones, they do this sort of thing.

What more do we know about how that particular airport plans to address incidents like this?

And are there any calls for reforms around the issue of drones?

STEWART: Yes. In terms of the airport itself, they say they've got plenty of measures with the help of police and the military --

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STEWART: -- I would add. They're not going to get into the specifics of it because they don't want troublemakers to know how they can set their own tower, they can mitigate the risks around them. They don't want to encourage any further copycat situations like what we just had. In terms of regulations, we're already expecting regulations tightened

but obviously this has really enraged the British public and fascinated the world, that something so small could shut down the second biggest airport in the U.K. I asked some people what they think should happen. Take a listen.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I think it's nearly 2019, that a drone can interrupt an airport is interesting.

UNIDENTIFIED MALE: The airport needs to do more in terms of a technological solution because people are always going to do stupid things and there's only so much you can do about that.

UNIDENTIFIED MALE: Regulations are fine if people adhere to it. If anyone has a criminal intent, regulation isn't going to work. What we need is to use the best technology to make people safe when they're flying and, you know, whether the army have got it or whether the civil aviation have got it, we need to make sure that airports and all public services remain safe.

(END VIDEO CLIP)

STEWART: Now Gatwick is expecting to run a full schedule of flights today. No drones have been sighted so far today. However, there are delays because a 32-hour shutdown does mean that aircraft and crews have been in all the wrong places at this time. But hopefully they'll be back to where they should be soon.

HOWELL: Anna Stewart live at Gatwick Airport. Thank you.

ALLEN: Now to Hungary. Demonstrators took to the streets again to protest the government's so-called slave law.

HOWELL: The law allows employers to demand up to 400 hours of overtime per year from workers. It's being denounced by opposing political parties. CNN senior international correspondent Ben Wedeman has the very latest from Budapest.

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

HOWELL: Ben, thank you.

We now have the update of the status of a woman photographed running from tear gas at the U.S.-Mexico border with her children. Maria Meze's (ph) attorney tells CNN she's now been released from U.S. Border Patrol custody.

ALLEN: Meze and her children appeared in this famous photo last month. They were part of the migrant caravan trying to reach the U.S. from Central America. Meze's lawyer says she will now seek asylum before an immigration judge in Baltimore, Maryland.

For the third time in a year, the U.S. government is partially shut down --

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ALLEN: -- after Congress failed to reach a deal to keep it funded, all of this due to a highly charged fight over money for President Trump's border wall. That relates back to the picture we showed you about people wanting to seek asylum in the U.S. We'll have more when we come back here.

ALLEN: Plus U.S. stocks take another dive on Wall Street this week. Major indices now on track to post numbers not seen since the Great Depression. Scary. We'll have more after this.

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HOWELL (voice-over): In the United States and all around the world. You're watching CNN. I'm George Howell.

ALLEN (voice-over): I'm Natalie Allen.

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[05:30:00]

ALLEN: Well, let's dive deeper into the facts surrounding the partial shutdown. At least 420,000 employees will be expected to work without pay until lawmakers make a deal. About 380,000 employees will be placed on furlough as we head into the holidays.

HOWELL: And essential services like Social Security will continue to be funded. The mail will continue to be delivered. Federal employees who keep people safe, like military and law enforcement officers, will continue to work.

ALLEN: Here's CNN's Tom Foreman with more on the shutdown's impact.

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TOM FOREMAN, CNN CORRESPONDENT: Seventy-five percent of the government already has funding in place through this coming fall.

But in various departments and agencies, 420,000 government workers could wind up working without pay in what are called essential jobs if we have a shutdown. So let's take a look at where we would see that, huge travel time over the holidays.

So with Homeland Security, 55,000 TSA workers will remain at their post; 55,000 Customs and Border Patrol protection agents and officers, too, along with a good many others.

And transportation, you can expect that air traffic controllers, 24,000 of them, would remain on the job. So would railroad inspectors.

Over at the State Department, passports would still be issued but maybe not if you go to a passport office that's in a government complex where a lot of folks are furloughed. So in a sense, the building is shut down.

If you were coming here to D.C. to go to the Smithsonian Museums, good luck. They're still going to keep normal hours through January 1st. But then it's not really clear what would happen in a shutdown.

The Justice Department will remain open and operating -- mostly. And, notably, the work of the special counsel, the Russia investigation, would continue, despite a shutdown. The Agriculture Department will continue things like food safety, inspection services but will shut down other things like research.

The majority of the folks at NASA would be put on a leave of absence without pay.

The Interior Department, the national parks are kind of a mixed bag. Some services at some parks would close, like restrooms and visitor centers. Others would probably remain open, at least for the time being.

And related to that, a couple of holiday treats. Santa and his llamas will still visit Olympic National Forest in Washington State on Christmas Eve, come what may.

And the Polar Express will continue to run near the Grand Canyon because it is operated by a third party, not the government.

(END VIDEOTAPE)

ALLEN: All right. Thank you, Tom Foreman.

Wall Street capped off a rough week with more losses on Friday. All three major indices fell on fears of an economic slowdown.

HOWELL: Stocks are down more than 12 percent this month. CNN's Cristina Alesci reports Wall Street hasn't seen a December like this in almost 90 years.

(BEGIN VIDEOTAPE)

CRISTINA ALESCI, CNNMONEY CORRESPONDENT: A brutal week in the market. The Dow and the S&P now on track for their worst December since the Great Depression and their worst yearly performance in a decade.

This week the selling began in earnest on Wednesday, when the Federal Reserve raised interest rates. Investors got really nervous that the central bank was weaning this economy off of easy money.

Look, we've had historically low interest rates now for over 10 years and that's helped boost the economy. When interest rates are low, consumers are more incentivized to buy houses and cars and, of course, stocks.

Rising interest rates might have the opposite impact. That's what spooked Wall Street. Add to that Fed chairman Jerome Powell disappointed investors by making it sound like more interest rate hikes were already baked in for 2019 and that sent the market even lower.

Adding to the negativity, President Trump, who tweeted on Thursday that he was willing to partially shut down the government over border wall funding. Even after one of his economic advisers tried to assure the market that a short and partial shutdown would not have lasting economic impact, the president took to Twitter to emphasize the shutdown would be long.

On Friday, the Federal Reserve tried to repair some of the damage. New York Fed president clarifying that the Fed will monitor what's going on in the financial markets and future hikes really depend on economic data.

But, overall, a very volatile week for Wall Street that ended with investors still deeply concerned about the impact of the ongoing trade war with China, a global economic slowdown and the stimulus from the tax cuts wearing off.

(END VIDEOTAPE)

ALLEN: Let's talk about this with Ryan Patel. Ryan is a global business executive. He joins me from Los Angeles.

Ryan, thanks for being with us.

RYAN PATEL, GLOBAL BUSINESS EXECUTIVE: My pleasure.

ALLEN: First of all, what is pushing the markets down?

Was the Fed's decision to raise interest rates a factor?

PATEL: Yes, it definitely was. But it West multiple things. Obviously Wall Street did not like the fact they did this. I think when they did go to the fourth increase --

[05:35:00]

PATEL: -- rate, I think what it showed was the lack of trust, what the Fed had for the economy coming next year. And that's what pushed investors and Wall Street to go.

This is more than just keeping it on autopilot and that's what caused this nervousness, that the Fed had to step in and not provide reassurance that everything was going to be OK.

Again, when corporate companies start to look at their profits will tighten a little bit, investors will start looking at the stock market, looking at the overvaluation on a lot of these companies. That's what you see, this kind of selloff. That's one.

And obviously these talks of the trade war continue to be out there. And the government shutdown doesn't help, either.

ALLEN: Right. And talking about the Fed and its decision. The Fed chairman Jerome Powell, apparently this move has angered President Trump. Bloomberg is reporting that he wants him out.

What do you think about that?

And would the U.S. president have any sway over the Fed chairman? PATEL: Well, in all respect to President Trump, he can say whatever he wants to say, because the Federal Reserve was very clear they're very independent from him. Powell came out to say they're making decisions separate.

I think truly, when they made that decision to make that interest rate hike, I almost felt like they didn't have a choice because they were getting so much pressure from the president to do the opposite. It would have felt like they had to cave in.

I think the chairman, that little caveat that he did for next year is that they would only do two rate hikes versus three. But to be able to influence something directly like that is not going to be in his power.

ALLEN: I want to ask you, why are the markets so down when the economy has continued to grow, inflation is low, unemployment is low and wages are rising?

PATEL: Well, it's -- you know, whenever you look at the stock market, you look at the valuation. What's next? It's great that it did this year from the tax cuts and the economy. But next year the U.S. economy is going to be a little bit slower, 2 percent to 3 percent.

And what really puts the valuation on these companies and risk is when you have increased prices with the tariffs, you have -- they become more expensive, companies will then have a less profit margin at the bottom end.

And I think that's where corporate leaders and CEOs kind of start to rein back a little bit about their kind of expectations on shareholder value. That kind of leads to a domino effect, when that consumer price, that price is going to be passed onto the consumer and that's where, at the end of the day, it comes down to.

ALLEN: President Trump has often touted the strong economy and strong market as having to do directly with his presidency. Let's listen to comments he's made in the past and talk about it.

(BEGIN VIDEO CLIP)

TRUMP: After years of stagnation, the United States is once again experiencing strong economic growth. The stock market is smashing one record after another and has added more than $7 trillion since my election.

The first thing they say invariably is, Mr. President, so nice to meet you, congratulations on the economy.

We're doing record business, stock market, record everything and also record unemployment.

Because I have created such an incredible economy, I have created so many jobs.

Whether we let the radical Democrats take control of Congress and take a giant wrecking ball to our economy.

(END VIDEO CLIP)

ALLEN: So he takes the credit when things are good.

Now that things aren't so much, does he also have to take some of the credit?

And do you think this downturn is going to hurt this president?

PATEL: You know, he's not going to take the credit for the downturn.

(LAUGHTER)

ALLEN: Right.

PATEL: But that's what he's showed. When the market was there last year, when it coming down, he didn't take it. Obviously everybody can point to that this uncertainty is caused by some of the straight policy and the straight policy leads to these numbers that -- again, if I'm an investor right now, what are you hearing as noise?

There's too much noise out there for an actual investor to go, well, do I want to -- when the Fed comes out and has no ability to leave some flexibility, like today, on yesterday, on Friday, you're talking about the Fed coming in during the middle of the day, saying, oh, yes; we're going to ease up on restrictions.

And the market goes up?

We're really sensitive to news right now and I think that's where, as the administration has to understand that they've got be really careful now going into the next quarter about how they control what their process and procedures are going into, I think, March and April, when that trade deal happens with China.

ALLEN: We thank you. All right. Happy holidays.

PATEL: Likewise.

ALLEN: Ryan Patel --

[05:40:00]

ALLEN: -- we appreciate your insights. Thank you.

PATEL: Thank you.

Well, sources say President Trump is frustrated with his acting attorney general, Matt Whitaker, for not protecting him from allegations that make him look bad but the president may be getting his way on a different issue: the Russia investigation.

HOWELL: That is because Whitaker has ignored calls for him to recuse himself to overseeing the special counsel Robert Mueller and that investigation, even though that may be a breach of ethics. CNN's Laura Jarrett explains what this might mean for Mr. Mueller, Mr. Trump and everyone else involved.

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LAURA JARRETT, CNN JUSTICE CORRESPONDENT: New details today on acting attorney general Matt Whitaker's role in overseeing the Russia investigation after he rejected the advice of Justice Department ethics officials who said he should step aside.

Whitaker, who's never been briefed on the Mueller investigation, is expected to start getting updates now that he isn't recusing himself.

However, Whitaker was given a heads-up that President Trump's former attorney Michael Cohen would plead guilty before it was publicly announced. Meanwhile, deputy attorney general Rod Rosenstein promised the investigation would continue to be managed properly.

ROD ROSENSTEIN, DEPUTY ATTORNEY GENERAL, UNITED STATES: We've continued to manage the investigation as we have in the past and it's being handled appropriately.

JARRETT: Rosenstein's office will continue to manage the special counsel's investigation day to day. But Whitaker can block any significant steps Mueller wants to take for now, an investigation that Whitaker long criticized before joining the Justice Department.

MATT WHITAKER, ACTING ATTORNEY GENERAL, UNITED STATES: That attorney general doesn't fire Bob Mueller but he just reduces the budget so low that his investigation grinds to it absolutely almost a halt.

JARRETT: Even echoing President Trump's words saying the special counsel investigation could become a "witch hunt" in a CNN op-ed last year.

Whitaker's decision not to recuse himself explained in a letter sent to lawmakers saying that an ethics official had told Whitaker staff he should recuse himself from supervision of the special counsel investigation because it was their view that a reasonable person with knowledge of the relevant facts likely would question the impartiality of the acting attorney general.

That appearance of a conflict not enough to convince Whitaker to recuse. The Justice Department outlining his reasons in the same letter saying ethics officials could find no personal or financial interest that would require refusal, that Whitaker had not made comments about the investigation since rejoining DOJ to work for Jeff Sessions and that Whitaker thought Mueller was quote, "a good man," and would only go after legitimate targets.

TRUMP: He was my first choice from day one.

JARRETT: The administration now about to face similar issues with Bill Barr, the president's permanent pick for attorney general, who is also a Mueller critic.

The former attorney general under President George H.W. Bush, writing in an unsolicited memo this past June, calling the special counsel's obstruction of justice investigation "fatally misconceived with potentially disastrous implications for the presidency," saying Trump's firing of former FBI James Comey was squarely within the power of the president.

SEN. MARK WARNER (D), VIRGINIA: I find that very troubling as well. But we see this constant pattern.

JARRETT: Democrats now crying foul on the president's choices.

WARNER: It appears that the number one qualification Donald Trump is looking for in an attorney general is someone that will try to undermine the Mueller investigation.

JARRETT: Laura Jarrett, CNN, Washington.

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ALLEN: Well, coming up, the incoming White House chief of staff went to Capitol Hill on Friday.

HOWELL: He's trying to avert the government shutdown. But Mick Mulvaney hasn't always supported the issue at the center of this impasse.

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ALLEN: Our top story, the U.S. government in a partial shutdown. President Trump's incoming acting chief of staff, Mick Mulvaney, spent hours on Capitol Hill Friday, trying to prevent it.

HOWELL: It all boiled down to funding for Donald Trump's proposed border wall, the same wall that Mulvaney trashed just a few years ago. Our Jason Carroll has the details for you.

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JASON CARROLL, CNN CORRESPONDENT (voice-over): As Mick Mulvaney prepares to take on a chaotic White House and headstrong president, he may first have to explain his critical comments about one of Donald Trump's key campaign promises, building the border wall. Listen to Mulvaney's taped radio interview in 2015, uncovered by CNN's KFILE.

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UNIDENTIFIED FEMALE: Immigration: Donald Trump says build a wall, deport all illegal immigrants, rules are rules.

MICK MULVANEY, DIRECTOR OF THE OFFICE OF BUDGET AND MANAGEMENT AND ACTING WHITE HOUSE CHIEF OF STAFF: I've never been in the boxcar caucus, you know, ship them home in boxcars and let the Lord sort them out.

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 the fence.

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CARROLL (voice-over): Mulvaney made the comments to WRHI radio station in South Carolina. And his criticism of then candidate Donald Trump's border wall didn't stop there.

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MULVANEY: The fence doesn't solve the problem.

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. And, by the way, the bottom line is the fence doesn't stop anybody who really wants to get across.

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CARROLL (voice-over): Mulvaney's current role is director of the White House Office of Management and Budget and publicly he's defending Trump's border wall.

MULVANEY: This stuff is going up now.

Why?

Because the president wants to make the country more safe.

CARROLL (voice-over): Mulvaney is said to have lobbied hard for the job as chief of staff, Mulvaney tweeting, "This is a tremendous honor. I look forward to working with the president and the entire team."

That's a far cry from how Mulvaney once described Trump, as "a terrible human being." In 2016, when asked about the two candidates for president, Hillary Clinton or Donald Trump, Mulvaney voiced his support for Trump but offered this.

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MULVANEY: Should either of these people be a role model for my 16- year-old triplets?

No. (END AUDIO CLIP)

CARROLL (voice-over): Also in 2016, Mulvaney criticized Trump during a congressional debate when explaining why he was reluctantly supporting the then GOP candidate.

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MULVANEY: Yes, I am supporting Donald Trump. I'm doing so as enthusiastically as I can, given the fact that I think he's a terrible human being. But the choice on the other side is just as bad.

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CARROLL (voice-over): And Office of Management and Budget spokeswoman, Megan Burrow (ph), said in reaction to that video, "This is old news. This comments were made in 2016 --

[05:50:00]

CARROLL (voice-over): -- "when he was a congressman and had yet to meet the president."

Congressman Mulvaney continued to support then candidate Trump throughout the election and his support for President Trump has never wavered while serving within the administration.

CARROLL: As to what Mulvaney said on that radio show, well, we did reach out to him as well as the White House to get some sort of reaction. But no one responded to our request -- Jason Carroll, CNN, New York.

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HOWELL: Jason, thank you.

When words come back to haunt.

ALLEN: I know. Those were stinging words about Donald Trump, weren't they.

Well, a U.S. Supreme Court justice is recovering. I think you know her. Recovering after her latest medical scare. Ruth Bader Ginsburg's health report. She's a tough one. That's just ahead.

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ALLEN: Well, the rock star Supreme Court justice, RBG, Ruth Bader Ginsburg, is recovering from surgery. Doctors removed two cancerous nodules from her left lung Friday. They were discovered after a fall last month. She fractured three ribs then.

HOWELL: Rock star based on her resilience. Our chief medical correspondent, Dr. Sanjay Gupta, has more on her treatment.

[05:55:00]

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: They took this cancer out. They don't see any other evidence of cancer within the lungs. So they're treating this as it's the only treatment she will need.

Now it is a big operation I think for -- at any age, certainly if you're 85 years old. The recovery is going to be the most significant part over the next several days. We don't know if she had what's known as a standard thoracotomy, where it's an opening of the chest, or if she had something done less invasively, which would shorten the operation and recovery time as well.

What's likely to happen next, we won't know for sure exactly what type of malignant cells these were that were found in the nodule. And that will give us a better idea of what it means for Justice Ginsburg going forward.

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HOWELL: Before the surgery, Justice Ginsburg had said that she will serve on the Supreme Court as long as she's able to do so.

ALLEN: We wish her well.

HOWELL: Now to outer space we go and a large asteroid zooming past Earth as we speak. This is a far cry from Santa over the holidays. This thing is shaped like a sweet potato and it is making its way past Earth right now.

ALLEN: The object is about a mile long or 1.5 kilometers. It would make quite a dent if it hit Earth but we're happy to say that won't happen. The asteroid won't be back again until the year 2070, so, sweet potato, thanks for stopping by.

HOWELL: All right. Recapping our top story this day, Americans waking up to part of the government shut down. What it means, hundreds of thousands of federal employees are in limbo, not sure when they'll be paid next for the work they do.

ALLEN: Lawmakers left Washington Friday without a bill to fund the government by midnight. They're deadlocked over the president's demand to fund a border wall. Democrats oppose it. We'll have more on these developments on CNN throughout the coming hours. Thanks for watching. I'm Natalie Allen.

HOWELL: I'm George Howell. For our viewers here in the United States, "NEW DAY" is ahead. For viewers around the world, "AFRICAN VOICES" is ahead. You're watching CNN, the world's news leader.

ALLEN: See you later.