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Shanahan Takes Over For James Mattis Who Resigned Just Three Days Ago In Protest Of The President's Decision To Pull U.S. Troops Out Of Syria, Day Two of U.S. Government Shutdown; Treasury Secretary Steve Mnuchin Making Phone Calls This Holiday Weekend Trying To Calm Nervous Investors Before The Start Of Tomorrows Trading; Special Counsel Robert Mueller Is Facing A Unique Legal Challenge; Tsunami Hits Indonesia. Aired 3-4p ET

Aired December 23, 2018 - 15:00   ET

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


FREDRICKA WHITFIELD, ANCHOR, CNN: Shanahan takes over for James Mattis who resigned just three days ago in protest of the President's decision to pull U.S. troops out of Syria and CNN has learned that Mattis will leave now earlier than the February 28th date all because the President is reportedly upset with the extensive coverage of Mattis's resignation. All of this coming as the government shut down shows no signs of ending. The President's top negotiators now expect the standoff to go past Christmas and likely into the New Year.

We will begin with the President's new acting Defense Secretary. CNN Pentagon correspondent Barbara Starr joining us now. So Barbara, what do you know about the Deputy Defense Secretary and now soon to be acting Defense Secretary?

BARBARA STARR, PENTAGON CORRESPONDENT, CNN: Well, Patrick Shanahan, Fred, is the Deputy Secretary. He has been the inside guy, if you will, here at the Pentagon. A former Boeing executive for 30 years. As Deputy Secretary of Defense, he has the typical portfolio of handling bureaucratic matters, if you will, not foreign policy. The budget, acquisition reform, innovation, getting a new space command set up that the President wants; working on foreign military sales. These are the issues that are very close to Mr. Trump's heart. Patrick Shanahan hasn't had to tell the President no, but any of these, but now, he will move into the foreign policy arena, at least as acting Secretary dealing with America's allies with NATO and with America's adversaries as well as overseeing the withdrawal of troops from Syria and partial withdrawal from Afghanistan.

So it may all become very tough on him and it really remains to be seen whether he will be named or nominated to become the permanent Secretary of Defense with only two years to go in the Trump administration. He may be the one -- we don't know that the President decides to pick for some continuity -- Fred.

WHITFIELD: And then, Barbara, Mattis had said in his resignation letter that he wanted to stay until February 28th. This is in part what it said. "The end date for my tenure is February 28th, 2019. A date that should allow sufficient time for a successor to be nominated and confirmed, as well as to make sure the Department's interests are properly articulated and protected at upcoming events to include congressional posture hearings and the NATO Defense Ministerial Meeting in February. Further, that a full transition to a new Secretary of Defense occurs well in advance of the transition of Chairman of the Joint Chiefs Staff in September in order to ensure stability within the Department."

So, now the sequence changed a little bit. Would Mattis have been informed directly or would he have learned this kind of via tweet or publicly? What do you suppose the sequence of events had been?

STARR: Yes, we are hearing that he got a phone call from someone in the administration this morning, saying it's going to be January 1st. Essentially, he has to start packing his office up. I mean, look, this resignation letter did not go over well with the President. He may not have realized it right at first, but we're told when the President began to see the news coverage of the Mattis resignation and the kudos, if you will, that Mattis was getting even from Republicans in Congress, Mr. Trump became very unhappy and the view in the White House was that he simply couldn't stay on -- that Mattis couldn't stay on for two months. That they had to have him go and let someone else come in. That he couldn't sort of hang on as that kind of lame duck.

I think you are going to begin to see some of these digs at Mattis from the White House, from the administration as time goes on here as soon as this week. They are going to try and make the case that they can move on beyond James Mattis, get a new Secretary of Defense in and get an acting Secretary of Defense in and keep moving on their agenda -- Fred.

WHITFIELD: All right, Barbara Starr, thanks so much from the Pentagon.

STARR: Sure.

WHITFIELD: All right, joining me right now, Retired Rear Admiral John Kirby, who is a former Pentagon Press Secretary and a State Department spokesman. Also with me is Aaron David Miller Vice President and distinguished scholar at the Woodrow Wilson International Center. God see you both.

All right, so Admiral, you first. You know, your reaction to the President naming Patrick Shanahan as the acting Defense Secretary to start January 1 instead of you know, after February 28th when Mattis wanted his last day to be.

JOHN KIRBY, FORMER PENTAGON PRESS SECRETARY: Yes, look, I'm not totally surprised by this. I mean, clearly he was irked by the reaction of Mattis's letter and his resignation and this is a way of -- it's almost like a "Seinfeld" episode, you know, "You can't quit, I'm firing you."

And so he is trying to get ahead of all of that. But look, I am also not at all surprised and I think we should also take some comfort that Shanahan is now going to be acting Secretary for a while. He is familiar with the building. He has worked well inside all the services that are represented in the Pentagon. He has done a commendable job. [15:05:00]

KIRBY: I think it makes perfect sense for him to step up and be the acting until such time as a more formal process can take place. And look, I also commend Mattis and the letter for giving sort of two months' notice. I mean, I think that that was -- there was good will in that. I don't think he was trying to pull a fast one or be clever. He was really trying to give the President time and space to name a successor.

WHITFIELD: And so Aaron, even though Shanahan was you know, the deputy, he comes from a business background as a former Boeing executive and even though as a deputy, perhaps, he didn't have a whole lot of foreign policy experience, but should troops and should allies feel comfortable with him?

AARON DAVID MILLER, VICE PRESIDENT AND DISTINGUISHED SCHOLAR, WOODROW WILSON INTERNATIONAL CENTER I don't think they have much of a choice. And I suspect John is right given the fact that he represents some measure of continuity and presumably, will continue to see the importance of maintaining American relationships and alliances.

I mean, he is a smart guy. A couple of MIT degrees, a lot of experience with defense systems at Boeing, but the real question of course in the end, in the Trump administration is whether or not he is prepared to provide honest and sober counsel to the President and say no to the President. And it seems to me that, I think is very difficult.

And kind of to just add one point. You know, the way this was done, in fact the way Jeff Sessions was fired, the way that the Jim Mattis thing was handled really does, I think represent a first. I mean, I worked in the Carter -- from the Carter administration to Bush 43.

WHITFIELD: What do you mean by that?

MILLER: Well, I think our best Presidents, Fred, are the ones that had emotional intelligence. They had impulse control. They were able to keep their petty demons under control. Past -- you know, Bush 41, I think should give all pause to focus on the character and quality of a President. I think the real difficulty in this Presidency is that this President has a very hard time turning the "M" in "me" upside down so that it represents "W" in "we."

Jim Mattis didn't deserve this. Rex Tillerson didn't deserve it. Even Jeff Sessions didn't deserve the way he was handled as well. And that's I think a critically important point to bear in mind these days.

WHITFIELD: Yes, and Admiral, you know, apparently, Mattis did try to talk it out with the President reportedly for about 45 minutes when hearing of the whole U.S. troop pullout of Syria -- that didn't go well. So then he handed has resignation and he essentially was saying, "No, I don't like this idea."

Do you see that Shanahan has the capacity to challenge the President and say not a good idea or let's consult further because so far, the track record is the President doesn't always take the advice and in fact, seldom takes advice from advisors?

KIRBY: Well, Aaron is right. That is going to be the real question to watch going forward. I mean, I think -- I don't know Mr. Shanahan well enough to know whether he has that kind of moral courage to stand up to the boss and say, "Look, you are going down the wrong path." And so we are going to have to wait and see how this pans out.

Look, I mean, he is the Commander-in-Chief, and so you give him your best advice and counsel and if after giving that advice and counsel and it's not taken, you really only have two choices. You either smartly salute and execute it or you do what Mattis, which is you say, "Okay, you need to get yourself somebody else who can execute this policy." I think the jury is out and we're just going to have so see how Mr. Shanahan does.

I will add one more point though, a large part of running the Defense Department, I worked for two Secretaries of Defense, but a big chunk of that is the programmatic side. It is the business side. It's running the bureaucracy that is the Defense Department including setting the budget up for the next year or two or three years ahead in terms of what you are going to buy and what capabilities you are going to put in the field. He has a lot of experience coming from Boeing on that and he has -- clearly, he has got the educational background. I'm not too worried about his ability to step in those shoes.

WHITFIELD: Okay, and on the issue of the U.S. troop pullout of Syria. Lawmakers have expressed they are a little nervous about it. Allies have said they are unnerved. GOP Senator Rand Paul today actually came to Trump's defense, David, listen.

(BEGIN VIDEO CLIP)

RAND PAUL, U.S. SENATOR, KENTUCKY, REPUBLICAN: When the President declares victory over ISIS, he is exactly right. We took back 99 percent of their land? Aren't these people going to stand up and now fight for themselves? Can they not do anything? And it doesn't work to have Americans there policing Muslim lands. It just engenders more terrorism.

(END VIDEO CLIP)

WHITFIELD: Aaron David Miller, what do you think about that?

MILLER: You know, the way this decision was handled was abysmal. No consultation, no conditions for withdrawal, negotiating with the Russians or the Turks with respect to the Kurds, and clearly, no consultation with Congress.

And it will to a certain degree degrade our capacity to fight the Islamic state. But I think we also have to get a grip and understand that Syria is a broken, angry, and dysfunctional place and is being dominated by powers -- Russia, Turkey and Iran in particular -- they frankly have much more will and skill than we do and much more determination to make the ultimate sacrifice. [15:10:03]

MILLER: And as a consequence, Fred, I think we've really never grappled with the reality and try to find a serious policy there between being nodding on one hand and all in on the other. The Obama administration couldn't do it, the Trump administration couldn't do it and as a consequence, we are headed for the exits.

WHITFIELD: All right, Aaron David Miller, retired Rear Admiral John Kirby, good to see you both. Thank you. Happy holidays.

MILLER: Same to you, Fred.

WHITFIELD: All right, still ahead, a mystery unfolding in Washington. An unnamed company subpoenaed by the Special Counsel, fighting an appearance before a grand jury, so what's really going on behind closed doors?

But first, a U.S. government shut down day two. Why some in the White House believe an agreement might not be reached until sometime next year.

[15:15:00]

WHITFIELD: All right, welcome back. It's day two of the shutdown standoff in Washington and there is no end in sight. Negotiations are still apparently at a standstill with neither the President nor Democrats willing to budge on border wall funding.

While thousands of Federal workers are dealing with the holiday nightmare, finding out just days before Christmas that they won't be getting paid until Washington reaches a deal. Now lawmakers are heading home for the holidays and no official action is expected on Capitol Hill until they get back to work on Thursday.

Let's check in with CNN's Sarah Westwood live at the White House. So how is or is the President working the phones trying to negotiate with those who do not want border wall funding?

SARAH WESTWOOD, WHITE HOUSE REPORTER, CNN: Well, Fred, it appears that President Trump and the White House are bracing for a lengthy shutdown that could last beyond the holidays as President Trump is holding out for funding for his border wall and Democrats are continuing their refusal to fund it.

Now, recall that the President initially demanded $5 billion in funding and the border wall, his signature campaign promise and he said that money had to go to the construction of a physical barrier along the southern border. He says, it can't just go to general border security. Now, sources say Vice President Mike Pence offered support for a border security package worth $2.5 billion if it included money for the wall.

It's a long way down from $5 billion, and that offer came in a meeting yesterday on Capitol Hill with Senate Minority Leader Chuck Schumer. But Schumer, according to those sources rejected that offer, so the talks do still appear to be deadlocked at the moment. Now, Budget Director Mick Mulvaney predicted this morning that the shutdown could last until the next session of Congress that starts on January 3rd when House Democrats take over and Mulvaney also suggested that House Minority Leader Nancy Pelosi may be limited in her ability to make a deal with this administration because of her looming Speakership race. Take a listen.

(BEGIN VIDEO CLIP)

MICK MULVANEY, U.S. BUDGET DIRECTOR: Here's a problem of course is that, as recently as two weeks ago, they had offered us $1.6 billion for that same thing. So they are moving in the wrong direction. I think there's a really good question here as to whether or not this deal can be cut before the new Congress comes in. I think there's an implication here for Nancy Pelosi's election for the Speakership. I think she is now in that unfortunate position of being beholden to her left wing to where she cannot be seen as agreeing with the President on anything until after she is speaker. If that's the case, again, I think there's a chance we'd go in to the next Congress.

(END VIDEO CLIP)

WESTWOODD: That was Mulvaney on Fox News Sunday this morning. Note that he is also the incoming Chief of Staff. Now, Trump has been all over the map when it comes to this funding fight. He has gone from saying he would be proud to accept responsibility for it, to trying to blame it on Democrats. But at the moment, it's still unclear just how much less than $5 billion Trump might be willing to support in the end and it is unclear what, if anything, Democrats might be willing to give him because remember, Fred, the democrats have very little incentive to negotiate on Trump's terms right now, given that they will take control of the House in just a little less than two weeks now.

WHITFIELD: All right, Sarah Westwood, thanks so much at the White House, appreciate it. So one Republican senator is now calling out the President saying the whole shutdown is just a political act. Listen to what Senator Bob Corker said on CNN earlier today.

(BEGIN VIDEO CLIP)

BOB CORKER, U.S. SENATOR, TENNESSEE, REPUBLICAN: This is a purposefully contrived fight over -- at the end of the day, even -- no matter who wins, our borders are still going to be insecure. Just a few months ago, the President could have received $25 billion in border security just by dealing with the Dreamers, which by the way, most Republicans want to deal with the Dreamers' issue.

So we had $25 billion that could have been spent on border security, now, the government is shut down over what ultimately is that's going to $2 billion. This is a made up fight so that the President can look like he is fighting, but even if he wins, our borders are going to be insecure.

JAKE TAPPER, ANCHOR, CNN: I just want to -- just to understand this. You are saying that President Trump, if he wants that money for the border wall for border security, he can get it, but he needs to make a deal, but doesn't want to make a deal. He just wants a campaign issue. Am I hearing you correctly?

CORKER: It has to be that because this is like falling off a table. The Democrats easily would support more border funding, border security. They've said that. Twenty five of them came to the floor and voted for something that provided $25 billion worth of border security in exchange for dealing with the Dreamers. And Republicans want to deal with the Dreamers.

(END VIDEO CLIP)

WHITFIELD: All right, let's talk about all of this. Joining me right now, CNN political commentator, Ben Ferguson and Democratic strategist and CNN political commentator, Hillary Rosen. All right, good to see you both.

HILLARY ROSEN, DEMOCRATIC STRATEGIST AND POLITICAL COMMENTATOR, CNN: Hi, Fred.

WHITFIELD: All right, so Ben ...

BEN FERGUSON, POLITICAL COMMENTATOR: Good to be here.

WHITFIELD: ... you first. I mean, the President didn't get it done in two years. Republican controlling both Houses. Is Corker right that this is really just a show and he just wants to look like a fighter?

[15:20:04]

FERGUSON: Yes, and honestly, that whole clip, I was laughing because I'm from Tennessee, from Memphis and Bob Corker pretty much has surrendered his entire political career ...

WHITFIELD: I thought you were from Texas?

FERGUSON: Well, I am from Memphis, and I know Corker, know his staff. I still have family there. Lived there part of the time and I laugh because it is totally encompassing of Bob Corker's political career. He is a guy that doesn't fight for very much and that's the reason why he wouldn't run for reelection and the poll numbers are so against him and so for him to criticize the President ...

WHITFIELD: But in this case, he's talking about the President and is that a pretty good argument that he is making? That he could have -- if he could have gotten this done already, why didn't it happen when you've got Republicans controlling both Houses. And now, in a last ditch effort just weeks before the House is taken over by Democrats, you're going to try and get this in?

FERGUSON: Look, I understand what you are saying, but the bottom line is, the President of the United States of America heard from a lot of constituents and a lot of people that voted for him that said, "Mr. President, we are willing to defend you to a certain point and if you don't fight hard for this border wall which was your core campaign promise, we may not continue to defend you and support you the way that we have." And that's the reason why the President, I think, made the right decision here to go all in on this because it is something that many Americans feel very strongly about and especially his supporters.

And so for Corker to come out and say, "Well, he could have gotten this done," I would say to Bob Corker, "Why didn't you lead on this issue more than you did? You've always been criticizing the President, but you haven't actually led on this issue."

WHITFIELD: Except he's really saying this is just for show -- so Hillary is this just a show? You know, or is this the President making a really good effort on trying to fulfill a campaign promise?

ROSEN: It's the right question, and you know, unfortunately like too many Republicans, Bob Corker got caught telling the truth just as he has quit the Senate. And if we had a little bit more leadership, and among the Republicans in Congress, this would have been a nonissue and President Trump would not get sort of his, in my view, racist campaign issue.

The Democrats offered a lot more money last year for the wall and for more border security in exchange for something that everybody knows this country needs which is real immigration reform. Just the wall doesn't do any good, and that's the biggest problem here.

WHITFIELD: Chuck Schumer made the argument yesterday that the President did get more money for border security but didn't even use it last year and here, now, the President is asking one more time at the risk of shutting down government, and it means, 800,000 Federal workers are not going to get paychecks.

ROSEN: Fred, it's really important that people understand that there are huge portions of the border you can't build a wall. A wall itself is not an answer. Technology is an answer, more personnel is an answer. Finding other ways. And you know, as many have said like until Mexico outlaws 100-feet ladders and shovels, a wall itself is not going to do it. What we need is smart policy and what we have instead is a President and too many Republicans unwilling to be realistic about this.

FERGUSON: So, Hillary, what would you be in favor of? Would you be in favor of more border security? Would you be --

WHITFIELD: So Ben, those constituents that you talk about who want a wall, don't they also want Mexico to pay for it? Because Mick Mulvaney put it this way that somehow, any kind of money that would be allocated in the spending bill would essentially be Mexico paying for it. Listen to how he explained it.

(BEGIN VIDEO CLIP)

MULVANEY: And if you ask the President, he will point you immediately to something else that didn't get a lot of news in the last couple of weeks, which is this new U.S.-Mexico-Canada agreement, the USMCA, which is so much better for us than the NAFTA deal that American workers are going to do better. The government is going to be better and you could make the argument that Mexico is paying for it in that fashion.

UNIDENTIFIED MALE: But none of that is Mexico paying for the wall, let's just be clear.

MULVANEY: Technically, you and I both know that it cannot work exactly like that. I can't spend any money at the office of management and budget, that the Department of Homeland Security can't actually spend money from Mexico. We have to get it from the treasury.

(END VIDEO CLIP)

WHITFIELD: So Ben ...

ROSEN: It's offensive.

WHITFIELD: How do you push that? How does anyone believe that?

FERGUSON: Look, I think anyone that is in favor ...

ROSEN: Come on, it's just offensive, just admit it, Ben.

FERGUSON: Let me finish what I am was saying before you criticize it, okay. What I was about to say was, a lot of people would love for Mexico to pay for the wall. The reality is though, the majority of the supporters that support the wall, at this point really don't mind our tax dollars going to pay for it, and proof of that is the GoFundMe page which has blown from up a veteran who put it together and millions and millions of dollars coming in. People want border security.

And I would say to Hillary and I mean this sincerely. Democrats and maybe you can lead the way on this. Get together and talk to them about all the things that you said you are in favor of, of more personnel at the border because overall, we haven't seen that. I would talk to Chuck Schumer and remind Chuck Schumer ...

ROSEN: Democrats have offered that for two years.

FERGUSON: ... of what he said at Georgetown Law. When he was at Georgetown Law, he said we need border security and we needed a wall. That was what he said at Georgetown Law several years ago, and now, all of a sudden he has abandoned that for politics. So tell me what you really want. Put it together with the Republicans. I'm not saying a wall fixes everything, but it's a huge step forward ...

ROSEN: There actually was a deal.

[15:25:07]

FERGUSON: .,. in the security. I'm in favor of more personnel as well, but again, Chuck Schumer is a guy that said it at Georgetown Law, go look at the tape, and now he has abandoned that. I want the old Chuck Schumer back. ROSEN: He has been quite clear. Chuck Schumer and Nancy Pelosi made

it clear.

FERGUSON: He didn't want the wall.

ROSEN: In fact, in a deal they thought they had last year with the President where they were going to deal with the Dreamers, fund a significant portion of a wall along parts of the border that can handle a wall and increase technology which is probably the most important thing they need to do on the border, then they thought they had a deal.

And two days later, the President backed away from the deal and hasn't gone back to it since. So don't say for a second that this is about the Democrats. This is about Donald Trump saying that the only he wants to do is make guys like you and Ann Coulter happy. It's just not going to happen that way. That's not even realistic and good policy.

WHITFIELD: Ben last word.

FERGUSON: It's not about -- I'm sitting here in Houston, Texas. If you think this is about making me happy, I would invite you to come down and talk to men and women who have lost their kids, who have been murdered by people ...

ROSEN: Don't do that. That's bull.

FERGUSON: ... that have come across the border illegally. Don't do that -- what do you mean don't do that? If you sat down with these people and you see what their life is like because of an open border ...

ROSEN: Don't you dare accuse Democrats of being for open borders.

FERGUSON: I am not accusing Democrats -- I am saying a fact.

WHITFIELD: Okay, but the argument is not about making the nation safer. This is how to do that.

FERGUSON: You're not in favor of a wall, that's -- we're not going to rewrite history here. You're not in favor of a wall.

ROSEN: The wall is not an answer to open borders.

FERGUSON: The wall is not an answer to opens borders -- that makes no sense at all.

ROSEN: Because the wall is a part of a comprehensive plan and when President Trump and guy like you make this be a simplistic construction problem, you are doing a disservice to the American people and the those people on the border worried about that.

FERGUSON: It's not simplistic, everybody knows it's a complex issue, but I will say this ...

ROSEN: You are not treating it like one.

FERGUSON: You are telling me that you truly believe that we cannot have a wall and somehow fix the problem which including -- I'll go back to Chuck Schumer, look at the tape when he was at Georgetown Law ...

ROSEN: We can do a wall --

FERGUSON: He said it's impossible to have border security without having some sort of border construction and we need to have that for immigration ...

ROSEN: You can do that partially.

FERGUSION: ... reform in this country. It is impossible to do it without having a wall. It's impossible.

WHITFIELD: That are is central to when government might be reopened. Already, we are hearing from Mick Mulvaney and others that it is not likely that there is going to be a deal over the holiday season, but instead possibly in January.

ROSEN: Because they want a campaign point.

WHITFIELD: Hillary Rosen, Ben Ferguson, thanks so much to both of you.

FERGUSON: No, we want a secure border. Thanks.

WHITFIELD: All right, up next, Treasury Secretary Steve Mnuchin making phone calls this holiday weekend trying to calm nervous investors before the start of tomorrows trading. So who is he talking to? What is being said? Next.

[15:30:00]

WHITFIELD: All right, U.S. stocks are closing out their worst year in a decade. So on to the next to last weekend of 2018, Treasury Secretary Steve Mnuchin is working the phones. CNN has learned that Mnuchin has been calling around to big banks promoting economic vital signs and squelching reports that the President might try to fire the head of the Federal Reserve. His calls happening less than five hours before Asia markets open.

I want to bring in David Dodson. He is a lecturer at Stanford University Graduate School of Business. This year, he also ran for the GOP Senate nomination from his home state of Wyoming. Good to see you.

DAVID DODSON, LECTURER, STANFORD UNIVERSITY GRADUATE SCHOOL OF BUSINESS: Good. Nice to be here.

WHITFIELD: Okay, so what could the Treasury Secretary Mnuchin be saying to banks to reassure them?

DODSON: Well, look, we have to remember that it's every President's God-given right to complain about the Fed when they raise interest rates or they contract their balance sheet. So what's happening is not unprecedented.

I think what the Secretary is doing which is great as he is sort of taking Trump's flamboyant language in his tweets and reinterpreting it to say, "No, Powell will not be fired and there is a lot of good things happening in the economy so everybody just sort of relax."

You know, we forget that back in for example, in the Johnson administration when the Fed raised rates on Johnson, he actually called the Fed chairman to his ranch and among other things called him despicable. Now, we haven't gotten there yet, although, we have got a couple of years to go here yet, so Trump's frustration with the Fed is nothing new. We see it all the time in administrations.

WHITFIELD: Okay, but there are contributing factors, right, to the unease in the economy even though the President has boasted, has taken credit for a booming economy as of late. So what went wrong here?

DODSON: I don't think necessarily anything has gone wrong. Remember that the Fed -- one of the beauties of the Fed is it is about the only institution we have today that is independent from politics, and can think about the long term.

Right now, we've got a political system now where everybody is thinking about the next election or the next approval rating that comes up. The Fed gets to think about the long term and the Fed is saying for the long term benefit of the United States and dour economy, we need to restore interest rates back to their natural level. That's all they are trying to do.

And there was all of these quantitative easing since 2009, and it's time to unwind that and we need to unwind it. We really should have been unwinding it years ago when we became so addicted to these low interest rates that we didn't want to do it, but it's time to do it.

And let's keep in in mind one other thing. The President has been saying for months and months and months how great everything is.

[15:35:02]

DODSON: That unemployment is down, that GDP growth is up. It's probably going to be about three and a quarter to three and a half percent, the stock market is up. If we are not going to unwind what we did in 2009 in these good times, when are we supposed to do that?

WHITFIELD: All right, and if you are Jerome Powell, I mean, you have seen this movie before. The President has been very critical of somebody and then suddenly, he takes it back, but then, you know, the demise is kind of spelled out in other ways. Do you believe that Jerome Powell's job is on the line? If not now, then later?

DODSON: No, I think Jerome Powell is having a very nice Christmas with his family and he is not worried about it because the Fed is structurally independent from the President. So the President can tweet all he wants and he can have all the quotes he wants and then the Treasury Secretary can more or less try to massage those words. He doesn't care because he is interested in the long-term health of the economy.

He is not going to lose his job and that's the beauty of the Fed and that's why in '51, after World War II, we set the Fed up to be exact -- for exactly this situation. So the Fed Chairman can enjoy Christmas with his family and ignore what the President is saying.

WHITFIELD: All right, David Dodson, thank you so much. Good to see you. Happy holidays.

DODSON: Okay, you, too.

WHITFIELD: Up next, Special Counsel Robert Mueller is facing a unique legal challenge. A mystery company involved in the probe is fighting a subpoena all the way to the US. Supreme Court. We will discuss that, next.

[15:40:00]

WHITFIELD: A new mystery is swirling around the Mueller investigation. A secret unnamed foreign government-owned company is appealing to the U.S. Supreme Court. That company wants the court to pause a grand jury subpoena it received related to the investigation.

Joining me right now is CNN legal analyst and former Federal prosecutor Shan Wu. Shan, good to see you. So we understand and happy holidays. We understand that a lower court did order the company to comply with the subpoena and handed over information about its activity in a criminal investigation, but now to have appealed to the U.S. Supreme Court to say, you know, take a pause, and don't honor this subpoena. How likely would it be that the court would entertain that request?

SHAN WU, FORMER FEDERAL PROSECUTOR: Well, it's been appealed to Chief Justice Roberts probably in his capacity in terms of overseeing the D.C. Circuit. A little hard to know what the outcome will be without really knowing the specific legal arguments. It has been reported that one of the arguments is the notion that if it's a foreign country that owns the bank and causes us to speculate, which country it might be, that that is an argument saying that perhaps the U.S. lacks the jurisdiction over it.

It sounds like the D.C. Circuit rejected that argument and I would venture to say it's likely that the Supreme Court would probably reject that as well. I think what's important to know is it's not unusual that it is a secret though because it's the Grand Jury Secrecy Rules that's forcing that to be in secret.

WHITFIELD: So it's not unusual that the name of the company or entity or even the country of its origin would remain secret even in a grand jury setting?

WU: Exactly, Fred. I think there has been a lot of speculation over the secrecy of it, but any grand jury proceeding is kept secret under Rule 6-C. Now, the government court and everyone is bound by that. The people subpoenaed or the company subpoenaed is not bound by that. But they may have reasons for not wanting to publicize that, so this in and of itself being secret is not unusual.

I think, if we speculate as to where the Mueller investigation is going with it, rather intriguing, they obviously have been interested in foreign influences and they could be following that path. But one thing that one has to wonder about is if they end up looking under the wrong rock, that perhaps the President doesn't want them to look under it whether or not he will be putting pressure on acting Attorney General Whitaker to put the kibosh on that.

WHITFIELD: So there could be consequences maybe not just for the grand jury or rules in place but perhaps even for the Mueller team if indeed the Supreme Court were to order this company or entity to reveal itself or comply with the subpoena?

WU: Yes, absolutely. The investigation has its own secret reasons for wanting this information. And if the court were to say that no, you lack jurisdiction over it, then they would be stymied in terms of getting that. And again, there are better National Security experts than me and foreign banking experts that could narrow down which countries it might be. But it would definitely affect the investigation.

WHITFIELD: Okay, and then let's switch gears just a little bit because the President's lawyers now have said that they might try to block Mueller's report from becoming public. There are reports that it's right around the corner. It soon could be coming down the pipeline, but on today's State of the Union, incoming Chair of the House Intelligence Committee, Representative Adam Schiff told Jake Tapper that he is prepared to use subpoena power to force the report's release if it comes to that. Take a listen.

(BEGIN VIDEO CLIP)

ADAM SCHIFF, RANKING MEMBER, INTELLIGENCE COMMITTEE: We ought to make sure this report is public. Now, there may be parts of the report that have to be redacted because they involve classified information or they involve grand jury material, but here's the thing.

For the last two years, I have been warning the Justice Department as they have been turning over tens of thousands, hundreds of thousands of pages of investigative files in the Clinton e-mail investigation that whatever precedent they were going to set, they were going to have to live by.

[15:45:10]

SCHIFF: Which means that when the Mueller investigation is over, they are not going to be in a position to say, "We are not going to provide information to Congress about this investigation." So they have already decided that's the precedent they are going to live by.

And at the end of the day, this case is just too important to keep from the American people what it's really about.

(END VIDEO CLIP)

WHITFIELD: All right, Shan, what's your response to that?

WU: Well, I agree with that sentiment. It's certainly too important to the American people to keep it. Whether or not legally that's going to work out in terms of public disclosure, that's a big question and it kind of takes us right back to who is the AG and who is in charge of it.

The Justice Department with a pro-Trump Attorney General who does not want any damaging information to come out could easily try to suppress that report and unlike older statutes, which talked about the independent counsel reports, this is very hazy in terms of specifically requiring any kind of foreign report. So that would probably be litigated. I mean, if the House tried to subpoena it, and Justice refused, we would be right at the D.C. Circuit and right at the Supreme Court.

WHITFIELD: All right, Shan Wu, thank you so much. Good to see you and happy holidays.

WU: You, too, Fred.

WHITFIELD: We'll be right back.

[15:50:00]

WHITFIELD: Right there, that's the moment that a tsunami hit Indonesia. The destruction striking without warning at a concert right there causing the stage to collapse. At least 222 people in the area are dead, hundreds are injured and dozens of others are still missing. CNN's Ivan Watson has been tracking all the developments.

(BEGIN VIDEO TAPE)

IVAN WATSON, SENIOR INTERNATIONAL CORRESPONDENT, CNN: Indonesian authorities say the tsunami struck around 9:37 p.m. on Saturday night. That's in the middle of a holiday weekend in Indonesia for the Christmas holiday when many of the resorts along the coast were full of Indonesian tourists.

The damage seems to have been done on both sides of the Sunda Strait. And it seems to have been triggered, Indonesian authorities say, not by an earthquake, as we saw in September, another deadly tsunami that killed several thousand people, but in this case they think that it is due to volcanic activity arising from Ana Krakatau, now that's a volcanic island in the middle of the strait that translates in English to "Child of Krakatoa."

Some of our viewers may know Krakatoa erupted in the 19th Century, 1883, killed more than 30,000 people, and is believed to have sent global temperatures plummeting as a result of its massive ash cloud and it resulted in this island that formed some 50 years later, and that has been very active in recent months. But authorities in Indonesia say the tsunami may have been worse Saturday night as a result of a full moon and also the fact that it had been high tide. So we saw images like the terrifying one of a wall of water breaking

through a stage while the Indonesian pop band "Seventeen" was performing.

The next morning, the lead singer made this statement on his Instagram account.

(BEGIN VIDEO CLIP)

RIEFIAN FAJARSYAH, LEAD SINGER, SEVENTEEN: (Through a translator). I just want to say that our bass player, Bani, and our manager, Oki Wijaya passed away. Also my dear wife is still missing. The rest of us have broken bones, minor injuries, including me, but we are fine. Please pray.

(END VIDEO CLIP)

WATSON: The Indonesian President has issued a statement of condolences for the victims of this disaster and has appealed for emergency services to rush to the area. Some of the work has been complicated by the fact that a major road there has been partially blocked by this tsunami and people are quite naturally quite nervous about the possibility of another tsunami, especially since there were no advance warnings ahead of this deadly wave.

Authorities say that is because this was not triggered by an earthquake and some are calling for new multi-hazard, early warning systems for scenarios like a possible underwater landslide caused by a volcano. Ivan Watson, CNN, Hong Kong.

(END VIDEO TAPE)

WHITFIELD: In our next hour, President Trump makes a surprise Twitter announcement, naming the person who will replace outgoing Defense Secretary James Mattis. Details coming up.

[15:55:00]

WHITFIELD: The man who introduced President Trump to Twitter has offered up a fierce metaphor for the President's penchant for tweets. CNN's Jake Tapper has that in this week's "State of the Cartoonion."

(BEGIN VIDEO TAPE)

TAPPER: President Trump and Twitter.

TRUMP: I might that maybe I wouldn't be here if it wasn't for Twitter.

TAPPER: Did you ever wonder how @realDonaldTrump actually came to be?

TRUMP: You know who says don't use Twitter, your enemies.

TAPPER: Trump's former social media manager, Justin McConney used to tweet for the mogul, who then started playing with his new android smart phone. One day a tweet was sent that McConney had not sent, quote, "The moment I found out Trump could tweet himself was comparable to the moment in Jurassic Park when Dr. Grant realized that velociraptors could open doors." McConney told "POLITICO." "I was like, oh no."

UNIDENTIFIED MALE: Don't you see the danger?

TAPPER: And quickly, Mr. Trump broke free.

TRUMP: When somebody says something about me, I am able to go bing, bing, bing and I take care of it.

TAPPER: And things started to get out of hand. Some of the President's advisers such as outgoing Chief of Staff John Kelly, have tried and failed to tame the Twitter beast.

UNIDENTIFIED MALE: Hold on to your butts.

TAPPER: Others have just tried to explain it.

UNIDENTIFIED FEMALE: These are aggressive living things that have no idea what century they're in and they'll defend themselves violently if necessary.

TAPPER: The President has fired top officials on Twitter, made destabilizing foreign policy announcements on Twitter, he has even potentially obstructed justice on Twitter.

UNIDENTIFIED MALE: You crazy son of a [bleep]. You're dead.

TAPPER: But with his 56 million Twitter followers, 40,000 tweets and counting, it seems the creature cannot be stopped.

(END VIDEO TAPE)

WHITFIELD: All right. Thank you for a good laugh on that one, Jake Tapper. Don't forget to join CNN to experience the incredible story of comedy legend, Gilda Radner in her own words, "Love, Gilda," a CNN film airs New Year's Day at 9:00 Eastern right here on CNN.

[16:00:29]