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Senate Adjourns Until Thursday, No Budget Deal in Sight; Pentagon Chief Quits After Trump Orders Syria Pullout; Trump Vented to Acting Attorney General about Cohen Revelations; Rocky Week on Wall Street; Trump Discusses Firing Fed Chairman over Rate Hikes. Aired 8- 9a ET
Aired December 23, 2018 - 08:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[08:00:20] JOHN KING, CNN HOST: Welcome to INSIDE POLITICS. I'm John King. To our viewers in the United States and around the world, thank you for sharing your Sunday.
It's day two of a partial government shutdown and there's no end in sight. The Senate now adjourned until Thursday. Tens of thousands of federal workers face uncertainty this Christmas as the president digs in even though it is clear he lacks the votes for his border wall.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: We're totally prepared for a very long shutdown and this is our only chance that we'll ever have in our opinion because of the world and the way it breaks out to get great border security.
(END VIDEO CLIP)
KING: Plus, new world disorder. The defense secretary quits as the president ignores his generals and the Republican establishment and makes abrupt calls to bring home half the troops in Afghanistan and all us forces in Syria.
(BEGIN VIDEO CLIP)
TRUMP: We have won against ISIS. We've beaten them and we've beaten them badly. So, our boys, our young women, our men, they're all coming back and they're coming back now. We won.
SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: To say they're defeated is an overstatement and it's fake news. It is not true. They have been severely damaged but they will come back.
(END VIDEO CLIP)
KING: And in this packed week, even more turmoil, lashing out at his acting attorney general over the investigations threatening his presidency and asking aides if he can fire the chairman of the Federal Reserve for raising interest rates.
(BEGIN VIDEO CLIP) SEN. CHUCK SCHUMER (D-NY), MINORITY LEADER: This may have been the most chaotic week of what's undoubtedly the most chaotic presidency ever in the history of the United States. All of this turmoil is causing chaos in the markets, chaos abroad and it's making the United States less prosperous and less secure.
(END VIDEO CLIP)
KING: With us this Sunday to share their reporting and their insights, CNN's Manu Raju, Jonathan Martin of "The New York Times", Michael Shear of "The New York Times", Elana Schor of "The Associated Press".
We begin with a partial government shutdown borne of a last-minute about-face by the president and that adds Christmas week stress to the lives of some 800,000 federal workers, about 380,000 of those workers will stay home as long as the shutdown continues. The other 420,000 or so are deemed essential, so they will work without pay until the politicians make a deal.
Talk Saturday got nowhere. The vice president did stop by to see the Senate's top Democrat but there was no breakthrough.
(BEGIN VIDEO CLIP)
SCHUMER: President Trump, if you want to open the government, you must abandon the wall, plain and simple.
(END VIDEO CLIP)
KING: The Majority Leader Mitch McConnell sent the Senate home until Thursday and said he won't bring anything to the floor that isn't first blessed by both the Democrats and the president.
(BEGIN VIDEO CLIP)
SEN. MITCH MCCONNELL (R-KY), MAJORITY LEADER: That's how we make a law in this situation. Sixty votes in the Senate, majority in the House and President Trump's signature. That's what's needed. That's what will end this regrettable episode.
(END VIDEO CLIP)
KING: Now, it's the third shutdown in two years of full Republican control of Washington and if it continues another 11 days, the Democrats will take control of the house and make it even harder for the president to get what he wants. And we are here because the president stayed silent all week as GOP lawmakers urged him to make clear his bottom line, his aides sent word president understood the math and would take a deal with no border wall money.
But when his conservative base took to Twitter and Fox News to call the president weak and worse, at the last minute, he demanded five billion dollars for the wall, knowing full well he does not have the votes. So, where are we this Sunday morning? The vice president came to see Chuck Schumer, who has to make the deal. Essentially, am I right offered to split the difference, can you give me two and a half billion dollars, so I can take that offer to the president, Chuck Schumer said no?
MANU RAJU, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Yes, I mean, they didn't really make much progress. Both sides are pretty far apart. Both sides are waiting and assuming that this is going to be a prolonged shutdown.
We're not talking about days. We're talking about potentially weeks and you talk to Republicans, I can't over emphasize enough how much they believe this was a strategic blunder by this president. One, you look at what happened in the Oval Office a week and a half or so ago when Chuck Schumer and Nancy Pelosi got into that argument with Donald Trump, there were no conversations in the aftermath of that, where they could have perhaps sorted some of this stuff out, when the Senate moved forward on the short-term measure to punt this play into the new Congress.
The president didn't raise any concerns at the moment he signaled he was supportive. The vice president told Republican senators privately that he'd be open to support he would sign it into law they went home thinking he would.
[08:05:02] Now, that he changed his mind, the Republicans don't believe that they have a negotiating partner in this president. And on top of that, they're not going to be back in 27th. They have to give days notice before someone comes back into town.
So the earliest vote is on 28th. John, that's five days away from Democrats retaking control of the House. Why would they have any incentive to get the president anything? So, it's unclear what he's actually going to get.
JONATHAN MARTIN, NATIONAL POLITICAL CORRESPONDENT, THE NEW YORK TIMES: Yes. I mean, two things, first of all, on Manu said, the Republicans have already lost the fight because Democrats take control of power on January 3rd. So, if you're a Democrat why do you want to cut a deal here at the end of the month for any additional border security money when you're going to be able to hold one chamber of Congress here in a matter of really hours?
And so, I think it's remarkable that the president wouldn't take some kind of a deal and call it a victory. But secondly, what is so striking and I think telling is to watch McConnell's body language and his language on the Senate floor, and just walking around the Capitol on Friday. He is plainly frustrated by the president and you can see him doing this kind of one on one -- actually, it's not even one on one. It's more like remedial level political science, explaining how a bill becomes a law.
When he does that, he's speaking to one person on the floor he's talking to the president and doing that. He is obviously simmering over this because his members have had to stay here fly back and it's very frustrating.
MICHAEL SHEAR, WHITE HOUSE CORRESPONDENT, THE NEW YORK TIMES: But, look, this is -- part of what's going on here is the increasing isolation of the president, which I'm sure will talk about more in the show as we go on. But the problem is everybody in Washington is describing for this president the dilemma that he faces, the math that he faces, the fact that the leverage will change in the Democrats' favor.
But President Trump is only listening to one kind of input and that's the Fox News sort of hard core part of his base, and he is increasingly shutting out all of the other kind of parts of the -- of the system that normally advise a president. Your legislative team, your chief of staff, your allies on the Hill -- all of the people that normally sort of feed into how a president makes a decision. He's shutting them out.
KING: But it's -- to me, it's just does he not get this two years in, in the sense that is it really this, all week long, that Senate passes its version under the impression from top White House officials the president gets it he'll sign it, he doesn't like it, but he'll sign it.
And then what Mark Meadows and Jim Jordan go on Fox News and say, Mr. President, you can't do this; Ann Coulter writes this for "Breitbart": Gutless president in wall-less country, President Trump unfollowed her on Twitter after -- is that what it takes? I mean, what signal does it send that if you so if you disagree with this president, go on Fox News and scream, it will change his mind?
ELANA SCHOR, NATIONAL POLITICAL REPORTER, ASSOCIATED PRESS: And it frankly sends a signal that those pundits opinions may be more important to him than the lawmakers who need to pass his agenda for the next two years in the Republican side of the aisle.
It really can't be overstated how distressing this is going to be to Senate Republicans who voted for something to 100-0, and unanimously passed something they thought he would sign only to see him spurn it, it's embarrassing. And I think it's going to have lasting consequences for his relationship.
KING: It is why they did it by voice vote though, not a roll role. In the back of his mind, Mitch McConnell was thinking, I see rug being pulled out from under me. But let's -- look, the president proudly said in that meeting you talked about with Chuck and Nancy as he puts it. He said, I will proudly own this for border security and then he came that's where he ended up after a period in the middle.
Are there any risks for the Democrats in that context? Listen to Chuck Schumer here saying, Mr. President, we're not going to budge and, Mr. President, we're not going to agree? You can send a vice president all you want, you can send Jared Kushner up the Hill all you want, until I hear you say it, I'm not taking any deal?
(BEGIN VIDEO CLIP) TRUMP: The president must publicly support and say he'll sign an agreement before it gets a vote in either chamber. Repeatedly, the president has privately agreed to a deal with congressional leaders only to reverse himself when criticized by the far right. We can't have another situation when the president signals support at first but then reverses himself, which is precisely what caused this shutdown in the first place.
(END VIDEO CLIP)
KING: He's right on the facts. My question is, is the trust deficit that low that essentially, you know, OK, Mr. Vice President, I just don't believe you know that you speak to the president?
RAJU: Yes, you never going to have to see a tweet from the president saying that you would support this deal and that's why that they would they would get behind something.
But just think about just how divided they're right now. Schumer made that remark, you must abandon the wall, that is a significant red line that Schumer is drawing here and if they move off of that, he's going to get hammered by his left. So this is a -- it's hard to see that that being reconciled.
But at the end of the day, this may come down to what is the meaning of wall? And you know there is going to probably be some money for border security people Schumer's office says the one point six billion dollars it was agreed to by the Senate Appropriations Committee for border security, doesn't go for the wall, goes for fencing, border security --
KING: The president's tweet here in the middle of this conversation.
[08:10:01] The president tweeted this and again because the president won't publicly lay out clearly or changes his mind clearly people are looking at this tweet and saying, is this somehow an indication from the president that he's willing to take steel slats, not a concrete wall, is that significant?
SHEAR: Look, I mean one of them one of the -- one of the things that the Democratic control of the House means once it happens is that they will not only have votes, but they'll have control of drafting whatever they want to put on the floor. And you'll -- it'll be interesting to see if Nancy Pelosi can get something that's put on the -- to put on the floor that does have border security which Democrats have in the past supported, but doesn't have construction of a wall and says, OK, Mr. President, here's three billion, five billion, whatever but for -- specifically for other things and not including the wall, is that something that then puts a lot of pressure on the president?
MARTIN: And the president I so clearly wanted to declare a victory over whatever he got from Congress. That was obviously the plan in the weeks leading up to this. He was you know starting to call it steel slats instead of a wall, he was talking more about border security, broadly his staff was echoing the same thing, and it wasn't until they push back that obviously --
SHEAR: Fox News --
MARTIN: Correct. He's fine, that was always the plan, was to sort of take the $1.6 billion and declare victory.
What's so striking about this John is that this president the ultimate deal maker not only is sort of not doing the deal here in the final days of this of this negotiation, it's that he had a deal months ago, right? You could have traded legalizing the Dreamers for something approximating a wall. That would have been like the Trumpian grand bargain.
KING: But he walked away from that, for the very same reasons he walked away here. There was
KING: -- right that he was weak, that he had gotten soft on immigration.
SCHOR: There's another victory, criminal justice reform, which we were talking about here that no one's talking about anymore. He actually scored on something that we're not talking about because of the blunder he made, he's into this.
KING: He's different. He's different.
Up next, we're going to continue the conversation. Turmoil in the world stage, too. The defense secretary quits as the president ignores his advisers and orders troops brought home from Syria and Afghanistan.
And often we do politicians say the darndest things -- today, politicians do historic things. For the first time in American history, a state legislature will be majority female. This week, Nevada broke the glass ceiling with the appointment of two women to recently vacated seats bringing the average of females in both chambers in Nevada to 51 percent. Congratulations.
[08:16:16] KING: The president testing the limits of his power is a common theme of our Sunday conversation, this week perhaps more than ever, as we watch a midterm reset that appears more impulse than strategy. His power and its limits is central in the just discussed fight over the government shutdown and will be a bit later when we get to the growing cloud of investigations and troubling signs in the economy.
Not in debate though as the broad power America gives its commander- in-chief. The new debate here is this president's judgment in exercising that power. Ignoring the advice of his generals and national security team, the president this past week said he will rapidly withdraw all U.S. forces fighting ISIS in Syria and says he also is bringing home half of the U.S. troops still fighting America's longest war in Afghanistan.
His defense secretary quit and remarkably made crystal clear his disagreements. Quote: My views on treating allies with respect and also being clear-eyed about both malign actors and strategic competitors are strongly held. Because you have the right to have a secretary of defense whose views are better aligned with yours on these and other subjects, I believe it is right for me to step down from my position.
There's anger at the Pentagon. The ISIS point man at the State Department also quit. Plus, anxious questions across the globe about what might be next, whether the question is NATO and Russian aggression, or troop levels in Japan and South Korea.
The president says we should not be surprised, and true, he did make clear as a candidate his dim view of America's role in Syria and Afghanistan. Once in office though, he took more establishment positions. No more.
We end here too with his own party openly at odds with the president's worldview, protesting for example his coddling of Saudi Arabia and now what it views as a dangerous retreat.
(BEGIN VIDEO CLIP)
SEN. MARCO RUBIO (R-FL), FOREIGN RELATIONS COMMITTEE: It's a terrible mistake and unfortunately I think we're going to pay a price for it if it's not reverse.
SEN. BOB CORKER (R-TN), CHAIRMAN, FOREIGN RELATIONS COMMITTEE: It's hard to imagine that any president would wake up and make this kind of decision with this little communication, with this little preparation.
GRAHAM: The only reason they're not dancing in Tehran and ISIS camps is they just don't believe in dancing.
(END VIDEO CLIP)
KING: I mean, it's -- this is fascinating and potentially very consequential, both from a policy standpoint, pulling U.S. troops out and just about everybody telling the president, sir, that's premature and politically in the sense, we were just talking about how he's running back to his more America first nativist base on domestic policy, he's completely abandoning the Republican establishment here on foreign policy.
MANU: Yes. I mean, because, look, the Republican Party for the most part on Capitol Hill, they've stuck with him because they believed that on policy, they've been on the same page with him for the most part. He's been pushing going after regulations putting forward facts for these tax cuts foreign policy has generally been in line with their thinking, they could put up with his behavior and his tweets and try to ignore it and all the scandals and the investigation say, well, at least we're getting things on policy.
When they start breaking from them on their core values particularly on foreign policies, we saw this pact week last week that's when you see a revolt increasingly within this party. And, yes, again, that's not to mention the very significant consequences of pulling out and the stark warnings about how this could affect this country and the world order. So that's -- you know, this is a risk for this president.
KING: And there's the how -- the how, the chaotic process. Normally, if you're going to do this and the president has the right to do this -- normally, you'd bring your own team in first and get consensus there. They all disagree with him and you bring in your own party and hopefully a bipartisan.
You're talking about troops overseas, potential of war and peace, bring everybody in and have a conversation about it. This president sends a tweet.
MARTIN: I think what's so rattled lawmakers on Capitol Hill this week was the combination of the policy decisions and how they will or achieved, and I think the two of them together has gotten folks scared because yes, on policy they that they do part ways, but it's not just that.
[08:20:02] It's the fact that he did it impulsively, without looping in the joint chiefs of staff, ignoring all of his civilian advisors and making this decision on Syria. And talking to folks in the capital at the end of the week, I can't recall a time where there was that much open contempt for this president and his conduct.
And not just among folks like Senator Corker who's obviously been a critic of, I don't know, for a while now, but from members like Pat Roberts, Jim Inhofe, Shelley Moore Capito, Bill Cassidy -- these are all sort of mainstream conservative senators but were openly saying, we don't like the behavior and the policy. That's worrisome.
KING: And so, I wanted a little flashback here. What some Republicans are warning. They're saying, Mr. President, remember we and you were very critical of say President Obama when he in their view pulled troops prematurely out of Iraq.
(BEGIN VIDEO CLIP)
TRUMP: See the way ISIS was created in the vacuum left by Hillary Clinton and Barack Obama out of Iraq.
Obama took us out with Hillary Clinton, created this incredible vacuum. ISIS was formed.
She and Obama created it through the vacuum.
We should have never been in Iraq, but once we were there we should have never got out the way they wanted to get out.
(END VIDEO CLIP) KING: A lot of his members of his own party saying, you're going to be having that conversation with yourself pretty soon. That's their fear, that's their fear. Let's hope they're not right, but that's their fear.
SHEAR: Well, look, part of part of the problem is that the President Trump has learned this lesson that when he does try to engage the rest of kind of his government and his allies in Capitol Hill, they talk him out of it, right? He would say about the Syria decision that he wanted to get out of Syria months ago tried to express that and then got pushback from his administration sort of fell back for a while.
And so, the lesson that he's learning now is that, no, I don't want to follow the process that every other president has followed because that I get talked out of things and so rather I'm just going to wake up one morning and pull the switch.
KING: OK, if he doesn't want to follow the process, the normal process, have his own process. But -- and the "A.P." has some fascinating reporting on this later matched by others. The process here seems to be, he's on a phone call at the president of Turkey who says, you know, we can handle this, sir, and there are a lot of complications there about the Kurds and you know, the Turks think that people the United States been working with terrorists. There's, you know, a lot of local politics, but the president's on the phone, OK.
SCHOR: Yes, I mean, he's reporting, like as you said matched by others, indicates that even Bolton even his own national security adviser was shocked by the haste with which the president listened to Erdogan and said, OK, sure why not? I mean, underscoring Jonathan's point about like there wasn't really much consultation.
SHEAR: That doesn't happen on those calls. I mean, it just doesn't happen that those calls to world leaders traditionally -- I mean, they're scripted, their plan they've got aides and advisers sitting around the president in the Oval Office talking and knowing exactly what every question is going to be and what every answer is going to be. It doesn't happen that way.
RAJU: It's not even really clear Mike Pence named himself when he came to the Capitol to brief lawmakers. After this was announced, he got an earful from Republican senators who tried to get him to explain this. He said, this is the commander-in-chief's position.
And they were very frustrated because it was clear that Pence didn't know much about this and he simply just said this was Trump's decision so he didn't even seem to loop in his vice president on this.
KING: He's president. They're not.
Up next, deja vu at the Justice Department. Jeff Sessions long gone, but the president's still mad about the investigations and now lashing out at his hand-picked acting attorney general.
(COMMERCIAL BREAK) [08:27:46] KING: The headlines of recent days are both damning and disturbing. Look here, talk of a tailspin, siege, chaos, engine finds a new gear, a president without guardrails.
If you don't think this past week was extraordinary, even by the Trump chaos standard, consider this -- he even called Fox fake news.
Among the many developments driving those headlines and talk of turmoil, this one stands out. CNN reporting that the president at least twice has lashed out at his acting attorney general because he is unhappy about how the case involving his longtime lawyer and fixer Michael Cohen is being handled.
In the Cohen filings remember, the Trump Justice Department alleges the president had a direct role in hush money payments and felony campaign finance violations. In lashing out, the president again makes clear his view of power and his belief the attorney general or the acting attorney general in this case should protect him whatever the evidence shows.
Just one of the many examples in a week again that this has been a chaotic and a different presidency from the beginning. He clearly likes that to a degree but the fact that yet again he's yelling at his attorney general essentially saying you know your job is to protect me, that's not the attorney general's job.
RAJU: Yes, I mean, remember how much outrage there was when Bill Clinton met on the tarmac with Loretta Lynch in 2016 during the Hillary Clinton email investigation, the former president talked to Loretta Lynch. Republicans were furious about that.
KING: They still call her up to Capitol Hill.
RAJU: He's took the fact that was --
KING: And all the Republicans criticizing the president for doing this, listen, listen --
RAJU: In fact, on the Hill last week answering questions about this very topic and there have been virtually you silence since this, and this is much different. This is a president who is directly implicated in crimes, and he's being calling out as attorney general for not stopping this investigation or at least calling him out on that privately. Whitaker is going to face a lot of scrutiny in this new House Democratic majority, Jerry Nadler, the incoming chairman, wants to bring him to the Hill.
In a private phone call, Whitaker said he would come and talk but they have not agreed on a date and Nadler is getting very frustrated. So that could be one of the first subpoenas we can see calling him up to the Hill to answer these questions. KING: And it's proxy if you will because they can't -- the question is more for the president than for Mr. Whitaker. There are legitimate questions for Mr. Whitaker, but the questions are more for the president of, don't you understand the split here.
Sally Yates, the former deputy attorney general tweeting this, "This shouldn't get lost in the avalanche of crazy. The wall we need is between the DOJ and the White House, the foundation of our democracy. The rule of law depends on it."
But two years in, this president doesn't believe in those rules.
ELANA SCHOR, NATIONAL POLITICS REPORTER, ASSOCIATED PRESS: And it appears that Bill Barr, his attorney general nominee, is also going to have to face stark questions about this because he's going to come in to the Senate for confirmation hearings pretty fast.
And here's where all the themes we're talking about in this show end up tying together because Lindsey Graham, who's furious with the President's Syria policy, is going to be chairman of the Judiciary Committee and now has sway over his attorney general.
So, of course, it's good that we have a 53-seat majority for the President -- that's a cushion he needs in the Senate to get this new AG confirmed but this is going to be difficult because of stories like this.
KING: Yes. And you make a good point about connecting, you know, whether it's the shutdown. Whether it's foreign policy. Whether it's here, this call it chaotic, call it different, call it what you will depending on your political perspective, I guess.
Dan Balz from the "Washington Post" writing this. "There's no longer any escaping from the reality of what the past two years have produced -- a president who is facing multiple investigations by special counsel Robert Mueller and by others; a president who has further divided an already divided country; a president who has not sought in any serious way to reach beyond his base; a president whose policies have left allies overseas worried about the absence of U.S. leadership. The country is heading into a year in which many of these could come to a head and at a time when the House will be in Democratic hands."
That to me, that last part --
JONATHAN MARTIN, NATIONAL POLITICAL CORRESPONDENT, "THE NEW YORK TIMES": Yes.
KING: I'm still not sure the President fully comprehends how difficult his life is about to become.
MARTIN: Right. And Dan is as sage as ever and I think to Manu's point on this latest story about the President complaining to Whitaker about the Cohen investigation, yes, it's well established that the President sort of blows past norms and has no grounding in the sort of traditions of the country's governance and obviously the rule of law. But you would think he would get politics by now and you would think that he will understand that when you do that kind of thing in this new environment, it's going to have consequences. And look, that story six months ago, nine months ago would have been a heck of a story but like a lot of good reporting, it would have probably been gone the next week or perhaps even the next day.
This is a different moment now because that's the kind of story that doesn't go away when you've got Democrats controlling a Chamber of Congress because they're going to hold this president to account and they're going to do oversight in a way the Ryan House never did.
KING: The flip side of that is he likes an enemy. And I think he sees the Democrats in power, giving him a foil, giving him somebody to fight against.
But I want to read you this --
MARTIN: -- which is why Pelosi is so careful about telling her folks to be prudent and judicious about oversight, yes.
KING: Right. Let him go first and let the investigations run their course. This is -- now Bob Corker we've talked about him a lot. He's the chairman of the Foreign Relations Committee. He's leaving. He didn't run for re-election, in part because of his differences between the President and the President will run a primary challenge, a heavy run.
But listen to this closely. "People are becoming significantly concerned. It's one thing to have issues on the domestic side. When you start willy-nilly foreign policy moves that are against U.S. interests, that is a wakeup call for people in the Senate.
I question whether he runs again. He's having difficulty handling the situation. I don't think he understands the seriousness of what he just did in Syria."
Now, is this just a critic who has often said, you know, he said that Mattis and Kelly and Tillerson, now all gone, were the adults and it was a child daycare center. He has grievances against the President.
MARTIN: Adult daycare center.
KING: You have to run it through the filter of his grievances against the President. But I question whether he runs again. There are some Republicans who think the President is just going to get frustrated with all the investigations. There are other Republicans who think the investigation are going to disable him to the point that he can't run again. Most don't say that publicly.
MICHAEL SHEAR, WHITE HOUSE CORRESPONDENT, "NEW YORK TIMES": Well look, I think the politics are interesting that somebody like that, in the President's party would say something like that. But -- and whether or not he runs again, I don't know.
But I do think that what this gets to is and sort of connecting the dots like we were talking said before, the President either doesn't understand the consequences of his actions or he decides willingly to ignore them. That's obviously in the Syrian case where and he's made this decision, however he made it and is just living with the consequences.
And I think with the -- with the Justice Department and the Mueller investigation, we're increasingly seeing that, too where for the first year there were people all around the President telling -- pulling him back from the brink when he would want to fire somebody or when he would want to take more aggressive action against the investigation.
And now we're seeing a president who, if he's getting that advice from folks, is more and more willing to simply live with the consequences of what, you know, could be in the end, really dramatic consequences -- the quote you put about shattering the wall that has stood for a long time at least since the Nixon years, between the Justice Department and the President.
KING: He, above all else, trusts his instincts. And he's -- look, everyone told him he couldn't win the Republican nomination, he couldn't win the presidency.
MARTIN: That's right.
[08:35:00] KING: He trusts his instincts.
The question is, does he understand the page that's about to turn when the Democrats take power?
Up next, a painful week on Wall Street and another Fed interest rate hike has the President angry. This was supposed to be his 2020 script.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Nobody has ever been president that has the greatest economy in the history of our country. This is the greatest economy in the history of our country.
(END VIDEO CLIP)
[08:39:57] KING: A president approaching the two-year mark is a president gearing up for a re-election campaign where the economy is almost always issue number one. And so the President, like most of us, paid attention to a tumultuous week on Wall Street.
But first, the good news. The President has a lot to brag about. Consumer confidence, way up. Growth in the economy, on its highest pace since 2005. Wage growth, starting to go up -- that's been a persistent problem in the economy. Unemployment the lowest since 1969. So there is a lot for the President to brag about when it comes to the economy. But people are starting to get a tad nervous about what they see. Look at this. This is the NBC/Wall Street Journal poll about economic pessimism. The percentage of Americans who think the economy is going to get worse over the next 12 months, over the next year now up to 33 percent. You have to go back to 2014 to see it higher than that.
A third of Americans now nervous the economy is about to get worse. That's not good for a president heading into a re-election campaign.
Nor are these headlines: "Recession might be coming", "Stock market on pace for its worst December since the great depression", FedEx worried about trade and the global economy", Surveys of CEOs - recession could come sometime next year".
This played out in recent weeks. The Dow now on pace for the worst year since the financial crisis of 2008. You see up, up, up, up, up, down this year here.
This the President got mad about this week and in the middle of this, the Fed raised interest rates. The President was mad about that.
Listen, one of his top economic advisers says what the Fed did is actually a good sign.
(BEGIN VIDEO CLIP)
KEVIN HASSETT, WHITE HOUSE CHIEF ECONOMIST: The Fed just lifted rates because they believe like we do that the economy is strong, that inflation pressures are low. They've signaled a couple of more things that they're going to do next year but it's based on the fact that they believe the economy is strong.
And so the flip from that to oh my gosh we're going to have a recession that the world is falling apart I think is really a jump too far.
(END VIDEO CLIP)
KING: So there's a smart White House adviser going out and saying calm down. Little turbulence. All is good. Smiling.
Then why is the President asking friends and advisers, can I fire the Fed chairman?
SHEAR: Good question.
SCHOR: Great question.
RAJU: He's looking for someone to blame for the market turmoil.
RAJU: I mean this is a president who does not ever take blame. He is the one who's taking credit for when the market was doing well. But now we're seeing real concerns about where things are headed and he needs something to point the finger at. But you know, a lot of people who are on that -- who believe that the last Fed chairman was too interventionist in the economy, like what the current Fed chairman is doing, but the President needs someone to blame.
KING: And so here's what you do if you work for the President and you're his loyal treasury secretary, you have to go out and say "I've spoken with the President and he said I totally disagree with Fed policy. I think increasing interest rates, shrinking the Fed portfolio is an absolutely terrible thing to do." But he says "I didn't suggest firing him nor do I believe the right to do."
Trust the reporting on this one, the President has asked people do I have this right? Should I do this? But the secretary of the treasury trying to keep the markets from tanking on Monday.
SCHOR: Absolutely. And it's conspicuous, of course, that the President isn't the one tweeting this, right. I mean he's got to get Mnuchin to come out and put the words in his mouth.
But going back to this theme we've talked about in this show. It's the Republican senators rebelling, multiple Republican senators who are publicly sending the message, no, no, no. The Fed's independence is real. This is not just one more norm that it's ok to trample.
And that makes a difference for this president's agenda. We keep doing it on issue after issue, right. We're using the fact that he needs these guys and they are not happy.
KING: And his campaign organization, this I find funny, how do you spend your money on campaign ads. This is the Trump re-election campaign.
They know the President is upset, so they do this.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: President Trump has achieved more during his time in office than any president in history. And that is why he needs every Trump supporter to pick up the phone right now and deliver a personal thank you to your president.
We have a booming economy, historic low unemployment including the lowest unemployment rate for minorities in history. We're bringing jobs back to America through new trade deals and the world is a safer place.
(END VIDEO CLIP)
KING: His re-election campaign thinks two years out from the re- election campaign they need to prop him up, boost his mood?
MARTIN: It's not really -- I don't know if they're trying to get him votes in November 2020. I think that's more to kind of placate the President and try and --
KING: And so he sees that on TV and says people say --
KING: -- I'm doing great.
MARTIN: We're doing something. We're out there. But I think -- a recurring theme that this president has is that nobody's defending (ph) him, right? That he has lost his allies.
And if you read our colleagues' story today, Peter and Maggie's today, it sort of gets to that. Where have my friends and defenders gone? I think that's very frustrating for him.
Just real fast as to this question about firing the Fed chairman, I think it's pretty easily explained in the kind of credo that Maggie Haberman has devised.
The key to understanding President Trump is he lives life in ten- minute increments. He wants to figure out a way to get through to the next 10 minutes. And so what he says and does is all about that.
And so the idea of like you can't actually fire the Fed chairman because you just can't, that's not how it works in this country. That doesn't occur to him. What he's thinking is I've been touting the market for a long time. I'm running on this great economy. It's now looking a little bit shaky --
MARTIN: How do I get out of that, right, for the next ten minutes?
[08:44:55] And you do that by finding a fall guy and the Fed and Powell are the fall guys for the moment. And the fact he can't actually fire him is beside the point, he's just looking for somebody to blame for this issue.
KING: But to that point that he lives ten minutes to ten minutes to ten minutes, it's like he's keeping score all the time. That's destructive.
SHEAR: Well, and part of the problem with living that way is that you do exactly what former presidents, former White Houses have always tried not to do which is when the market is up, you don't take credit --
SHEAR: -- you don't take sole credit for being the one that, you know, this is my stock market because most administrations know that it goes up and down. And if you take credit for one moment, you're going to get blamed for the next.
KING: He has giant decisions though on these economic questions -- giant decisions in the year ahead on trade and other big issues.
MARTIN: Right. But just real fast -- having the Dems now control the House does give him the opportunity to find -- speaking of fall guys -- a new fall guy. He could say the economy was doing great, the Dems took over.
SCHOR: I agree. I think --
MARTIN: He's already started saying that.
SCHOR: He's already saying that.
KING: He's already starting. He's getting ready. Eleven days from now the world changes.
Our reporters share from their notebooks next, including the latest buzz about Beto O'Rourke. He couldn't beat Ted Cruz in a senate race. So can he beat President Trump?
[08:46:12] (COMMERCIAL BREAK)
KING: Let's head one last time around the INSIDE POLITICS table and ask our reporters to share a little something from their notebooks, help get you out ahead of the big political news just around the corner.
RAJU: John -- it was just ten days ago when the Senate passed a resolution overwhelmingly, to condemn the Saudi Crown Prince Mohammed bin Salman, for his role in the murder of the journalist Jamal Khashoggi in October. But in the House there's been silence over whether or not the Republican leaders who will move forward with this measure in the final days of this Congress.
Now this resolution that was passed was a joint resolution which means if the Senate and House were to pass this, it would land on President Trump's desk. And may give him a decision. Sign it, he sides with Congress or veto it and side with the Saudis. And the President, of course as we know, has sided with the Saudis and Mohammed bin Salman in the aftermath of this murder.
And so far the Republican leaders -- Paul Ryan in his final days in Congress, has not said that he'd put it up for a vote. We've asked multiple times. They keep saying they have no update about this.
So it appears that perhaps the Republican leadership could be shielding the President from a very awkward decision of signing this into law in the final days.
And Bob Corker, the Senate Foreign Relations Committee chairman, told me that he's talked with the Speaker's. He's not gotten a commitment. And he is leaving office so he may not be there to push it in the next Congress. So this could quietly go away as the outrage over this murder continues.
KING: One last House Republican favor for the President before they leave -- lose power.
MARTIN: John -- beyond what Joe Biden does, the biggest question hanging over the 2020 race right now on the Dems side is what does Congressman Beto O'Rourke do? Now he issued a statement yesterday that was withering in his critique of President Trump and sort of last few days sort of chaotic behavior.
And my understanding is that this last week has gotten his attention. He is thinking now more seriously about the country and this moment and perhaps may be looking at a race more seriously.
And I can say this. The buzz about O'Rourke is real. You talk from Democratic operatives to senior Democratic office holders. There's a lot of chatter about him. I talked to one senator last week, a Democrat who said flatly Beto is going to be our nominee.
And John, as you know it is not every day that a senator speaks so warmly of a member of the House especially on all things presidential like that.
KING: That is a world turned upside down right there.
SHEAR: So as we finish out this chaotic year, one of the thing we should all be focused on is what President Trump will face next year when the new Democratic Congress comes to town, the Democratic House.
One of those things will be a lot of investigations and one of the topics the Democrats are itching to investigate him on, in addition to the Mueller probe, is immigration. He will face questions and hearings about the travel ban, about his decision to end DACA, about his decision revamp the asylum system.
And already you've seen Jerry Nadler, the congressman who is likely to take over the Judiciary Committee, has already made -- sent a letter for 15 demands for information from the administration about the zero tolerance policy that led to all of those family separations at the border.
I think you'll see that. You'll see all of the other immigration topics be a real thorn in President Trump's side as he deals with this new Democratic majority.
KING: Eleven days away until the Democratic majority.
SCHOR: Well, speaking of Beto O'Rourke -- he, Joe Biden and Bernie Sanders are leading the field in early polls and frankly leading the field in early buzz for the Democratic 2020 nomination. What's on my mind and what we talk to a lot of women about is what happens to the credible women candidates two years after the, you know, the failure of Hillary Clinton to seek the presidency successfully. And just months after this year of the woman.
And what we found is that yes -- Warren, Klobuchar, Gillibrand, Harris -- these are big names, they're also starting from behind. So there's a sense among Democratic women of there has to be a woman on the ticket, probably even the nominee. But there's also a huge amount of problems with the media double standard that a woman will face, trouble raising money and boosting name recognition against these three men. It's a real problem.
KING: It could be fun. It will be fun. I think at least one of them will challenge the boys at some point. Don't hold your breath for that, but it will happen. It will happen.
I'll close with this. Mick Mulvaney hasn't officially started yet as the new White House chief of staff but already some important members of Team Trump are voicing worries, he isn't up to the job.
Senior members of the President's campaign and political team now floating the idea of a new White House position -- counselor to the President and chief strategist.
[08:54:59] Their thought is that Mulvaney, a former House member, is not up to the challenge of dealing with all the investigations, including that newly Democratic House, while also integrating the White House with the President's re-election campaign.
One veteran Republican aware of this conversation, a potential search, joked he had forged his own death certificate. Trump 2016 campaign hand David Bossie's name gets mentioned as a possibility as does, this would be an outside pick, veteran Republican strategist Ward Baker.
Here's one big question, does the President agree he needs both a new chief of staff and a new chief strategist? That's unclear although the President is already complaining to friends about Mulvaney.
That's it for INSIDE POLITICS.
Again, thanks for sharing your Sunday morning. Hope you can catch us weekdays as well, a big week ahead, here at noon eastern.
Up next "STATE OF THE UNION" with Jake Tapper. His guests -- don't go anywhere -- Republican Senators Bob Corker and Rand Paul; plus the Democratic Congressman Adam Schiff.
Again, thanks for joining us. Enjoy your Sunday.
[08:55:53] (COMMERCIAL BREAK)