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New Word That Treasury Secretary Steve Mnuchin's Job Could Be In Serious Jeopardy; Supreme Court Justice Ruth Bader Ginsburg Has Now Been Released From The Hospital; For The Second Time In A Month, A Young Child From Guatemala Has Died In The Custody Of U.S. Border Agents. Aired: 9:00-9:30a ET

Aired December 26, 2018 - 09:00   ET

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


JIM SCIUTTO, ANCHOR, CNN: That's when lawmakers come back to Capitol Hill for the last few days of the 115th Congress. In reality though, let's be honest. The funding impasse is almost sure to last well into the next Congress as neither side appears in a giving mood when it comes to the President desired wall.

And also this morning, new word that Treasury Secretary Steve Mnuchin's job could be in serious jeopardy. As source telling CNN that President Trump's frustration with Mnuchin is rising, this after the markets suffered their worst Christmas Eve drop ever. Boris Sanchez is outside the White House with more.

Boris, I mean, listen, the markets are falling for a whole host of them reasons, some of them global, some cyclical, some President Trump's own making. I mean, should we read this as the President looking for a scapegoat in his Treasury Secretary?

BORIS SANCHEZ, WHITE HOUSE CORRESPONDENT, CNN: That's certainly one way to look at it, Jim. A source close to the White House telling CNN that Mnuchin is now under the gun and as you said, in serious jeopardy.

We understand that aides close to Mnuchin recently have been gathering positive economic news, positive economic statistics so that Mnuchin could present that to the President in an effort to calm him down. But what we are hearing is that that is not working.

A source says that the President is not happy with what he has been seeing. And though publicly, the President has said that Mnuchin is very talented and very smart, we'll see just how long that lasts.

As you know, much of his public ire has been directed toward Fed Chair, Jay Powell. The President blaming the slumping stock market on rising interest rates. What we are hearing from sources is that aides have been working to potentially secure a face-to-face meeting between Jerome Powell and the President, sometime in January. No date has yet been set, but the idea is that that might ease tensions between them and potentially ease markets as well -- Jim.

SCIUTTO: So we are looking at a shutdown, still going, we heard the President yesterday, certainly did not seem to be relenting on his demand for a wall. Lawmakers return tomorrow. Is there any movement from the President on this? Because you did hear him yesterday shorten the wall from 2,000 miles, the length of the border to 550 miles, seeming to be his goal.

And that dollar figure, $5 billion, seems like there is some movement there. But is the White House showing a willingness to deal right now?

SANCHEZ: Well, yes, in the last few days you had the incoming acting Chief of Staff, Mick Mulvaney said the White House was prepared to back away from that $5 billion demand for border wall funding.

Yesterday, the President though said that this shutdown will continue until he gets funding for a border wall. He did suggest, though that it might be easier for Democrats to secure funding if he called it a fence. It was a bit of a joke the President was making there.

He did also say that some new border wall installations had been commissioned. However, he didn't give any details exactly has to who has won that bid, who is doing the construction, where that new border wall was going.

We have asked the White House. We have yet to get any clarity on that. One more thing the President said was that some of these Federal workers who were obviously suffering because of this shutdown, whether they are furloughed or simply not being paid, he believes that they are supportive of him in this effort to shut down the government for funding of his long promised border wall.

Again, unclear where the President is getting that. We heard from a Federal union force, some government workers yesterday saying that essentially, the shutdown is a travesty, especially coming during the holidays -- Jim.

SCIUTTO: Well, the President makes a lot of claims, often does not back up those claims. Boris Sanchez at the White House, thanks very much.

Joining me now, CNN senior congressional correspondent Manu Raju and CNN political analyst and White House reporter at the "Washington Post" Seung Min Kim. Thanks to both of you.

I thought I told you guys to go back to your families yesterday. You're still here. This is a problem. Listen, there is a lot of news. Look at the shutdown. Let's for a moment, if we can, Seung Min, talk about the President directing his ire at Steve Mnuchin.

I mean, the President was talking about firing the Chairman of the Fed. Apparently, he was told he can't do that without cause, cause usually defined as illegal activity, not just a disagreement over the direction of interest rates.

Now he's focusing on Mnuchin, one of his earliest supporters, fund raiser during the campaign. I mean, is he looking for a scapegoat here?

SEUNG MIN KIM, WHITE HOUSE REPORTER, "WASHINGTON POST": I mean, it just shows that no one in Trump's orbit can be safe depending on what happens around him. I mean, look, even though the President did publicly express confidence in Mnuchin yesterday, it is no doubt that what has been going on with the stock market has really robbed the President of one of his favorite talking points, which is talking about the strength of the stock market, and you see that frustration boiling over.

We'll see what happens at this meeting between the President and the Fed Chairman early the next year does occur and the markets do calm. But this is something that just really has created even more tensions in a political administration that's filled with crises at any given moment.

And think about the fact that if Mnuchin and the Fed Chairman seem to be in the political crosshairs of the President at this moment, there are so many other top level vacancies and acting positions in the administration right now which is going to keep the Senate very busy.

[09:05:07]

KIM: We have an Attorney General nominee coming soon, a UN Ambassador, Defense Secretary and Senate Republicans don't really want to add to that list of nominees they have to vet and confirm if they don't have to.

SCIUTTO: So Manu, we got the ongoing shutdown battle. You heard the President yesterday not relenting on these issues. I understand you spoke to Mark Meadows, who was one of those who pushed the President not to relent on the wall in the lead-up to the shutdown. What are you hearing?

MANU RAJU, SENIOR CONGRESSIONAL CORRESPONDENT, CNN: Yes, that's right. I just spoke to him this morning. He said that there has been little progress so far from what he understands and these talks that have occurred for the last several days.

He has placed the blame mainly on Democrats, of course in his view. He is a Republican. He is an ally of the President. He believes the Democrats have not shown any willingness to negotiate. He says the offers have been basically what we have been reporting about the White House has come back under that $5 billion number.

We understand that Vice President Mike Pence spoke with Chuck Schumer on Saturday, this proposed $2.5 billion in funding for border security measures. Of course, that's much less than the President has been saying publicly, $5 billion, but the Democrats have been insisting on $1.3 billion, which is far too low from the White House.

So from Mark Meadows' perspective, he says the President is under no illusion in his words - the President is under no illusion that the White House - the Democrats would accept the White House's counter offer. He says little progress so far. There will be more discussions between members on the Democratic side, Republican side.

But as members come back into town, tomorrow, some may come back for the session tomorrow and not much optimism as we head into the New Year, and the turn of the new Congress, when Democrats of course, will have more power to dictate the negotiations going forward in the House.

SCIUTTO: Seung Min, this is basically a political game of chicken here, right, because President Trump is clearly calculating that he will lose his core base supporters if he doesn't deliver on this wall promise.

The Democrats are calculating their fortunes are rising here and that they will lose, if they give the President a victory on this. I mean, that is not a formula for compromise. I mean, how is this resolved?

KIM: That is the $64,000.00 question. And the President has - I mean, in recent weeks, our reporting has shown that the President recognizes he is going to lose more leverage as soon as the Democratic House takes control in January, which is why he was so dug in right now and he still is very much dug in.

But the problem again with his level of support on Capitol Hill is that while he does have these ardent supporters, such as Mark Meadows who Manu talked to this morning. The vast majority of congressional Republicans think a shutdown is a bad idea. Even if it is to achieve a policy goal like the President wants to.

And Democrats know that they have the political leverage. They won 40 seats in the House, and they will take charge and they provide a check on the President that they say has been lacking for the last two years. So how it is resolved? We have seen the administration come down in numbers a little bit. How far they come down? We will continue to see. But right now, the two sides are incredibly dug in and we don't see yet how that is going to be resolved.

SCIUTTO: Manu, go.

RAJU: Jim, yes, it will be interesting to see if when the House comes back and the Democrats take control, they will probably pass something on a short-term basis at least to try to keep the government open for some time.

Well, the Senate Republicans who agreed to punt this issue to a short- term bill, to keep the government open until that bill is - February 8th, will they go along with the House Democrats at that point or will they side with the President? How much pressure will they feel after being at home for a week and as people start raising concerns, giving them an earful? Will they break from the President? That will be a dynamic to match in the weeks ahead.

SCIUTTO: And just to be clear, Manu, that short term bill still does not include money for the wall, right? I mean, that's something that the President and those Republicans would have to basically relent on.

RAJU: Yes, and that would be a way of undercutting the President. And will Mitch McConnell go there. He has not shown any willingness to do that, but of course, he himself was undercut by Trump when they thought they had that deal initially.

SCIUTTO: Yes, indeed. Manu, Seung Min, thanks very much. I hope you get some time off this week.

RAJU: Thanks, Jim.

SCIUTTO: This is just in CNN. Supreme Court Justice Ruth Bader Ginsburg has now been released from the hospital. This after having two cancerous nodules removed from her lung. She had surgery on her left lung on Friday. Doctors say there is no evidence of remaining cancer in her lung or elsewhere in her body. She is now recuperating at home.

Those cancerous nodules were found by chance after having a scan for broken ribs. You may remember, she suffered during a fall last month.

For the second time in a month, a young child from Guatemala has died in the custody of U.S. Border agents.

[09:10:04]

SCIUTTO: An eight-year-old boy who was picked up with his father in El Paso, Texas, eight days ago, he passed away moments before Christmas at a hospital in New Mexico. He had been suffering from cold symptoms and a high fever.

The child's death following that of a seven-year-old Guatemalan girl earlier this month has prompted U.S. Customs and border protection to revamp its policies for caring for small children.

The fact is, they are still caring for hundreds, thousands of them. CNN's Nick Valencia has much more now from El Paso. Nick, I mean, still reeling, many from the death of the seven-year-old girl, now an eight-year-old boy. Tell us what are you learning?

NICK VALENCIA, CORRESPONDENT, CNN: Well, it is all the more tragic, Jim when you consider just when this happened on Christmas Eve, just minutes before midnight on Christmas Day.

This eight-year-old, now the second child from Guatemala to die in the hands of the custody of Customs and Border Protection in less than three weeks. And as we understand it, this eight-year-old traveled to the United States from Guatemala with his father and was apprehended last week.

Taken into custody by Customs and Border Protection, and essentially shuffled around from processing center to processing center in the coming days or in the days after they were apprehended, I should say.

It was on Monday, according to the CBP statement, that one of their agents, they say, noticed that this young boy didn't look very well. He had glassy eyes. He looked like he was sick. He was taken to the hospital. He was diagnosed with a common cold. But then he was also diagnosed with 103-degree fever.

He was kept an hour longer than initially expected, but he was eventually allowed to leave. His condition only worsened though. He was given medication, but according to the facts as they have been laid out from that time line, from the CBP statement. It was around right 7:00 P.M. that he started becoming nauseous, he started vomiting. He eventually lost consciousness and he never regained consciousness. He died at the hospital. His second time he was going to that hospital.

This incident, as you mentioned Jim at the top of the report, is the second time a child has died in less than three weeks. You remember the seven-year-old, Jakelin Caal Maquin who was laid to rest in a very touching ceremony in her native country of Guatemala just yesterday. And it has led to some actions here according to CBP.

The Commissioner releasing a statement saying that this is an absolute tragedy and they are effectively going to take action here. Among those actions they are taking at CBP is focusing principally on children that are ten years and younger that are in their custody. They are going to do some secondary screenings, some secondary medical screenings or perhaps even get more help from the Department of Defense, maybe the CDC, as well as the Coast Guard to help with those medical screenings.

Also, they are going to work with ICE on transportation. You know, it is hours sometimes that these migrants spend in the field when they are apprehended before they are taken through the system and processed and perhaps if they are more efficient at that time, it could lead to limiting those types of tragedies -- Jim.

SCIUTTO: Fact is the CPB is now in the business of holding thousands of people. Why specifically are hundreds of migrants of those migrants being dropped off in El Paso?

VALENCIA: So here we are in front of the Greyhound Bus Station where this week on Christmas Day, or on Christmas Eve, I should say, hundreds were dropped off here essentially without warning, catching the community off guard.

We did get a statement earlier in the week from ICE. They didn't make specific reference to why they're dropping off and it wasn't very clear why they are doing it now. We want to be clear though, this isn't really anything new. This is sort of what has been happening, even under past administrations.

But it was earlier this week, 200 were dropped off here, I had mentioned without warning. Volunteers had to come in and give them food and give them water, and there was no plan on where they would be housed.

We understand according to some reports, those migrants were housed temporarily on busses, and there was an expectation at least initially earlier in the week that this could happen again today. The Congresswoman-elect in this district saying that hundreds more could be dropped off on Wednesday. We don't expect that to be the case. But I just came from inside there, Jim, and no doubt about it, it is packed inside. And it could be even worse if this continues to happen -- Jim.

SCIUTTO: Nick Valencia, we know you will stay on this story. Thanks very much. Still to come this hour, President Trump has ordered a big draw down of U.S. troops in a number of places around the world, but what will it mean for the ongoing war against terrorism.

Plus, all eyes on Robert Mueller and his Russia investigation as the New Year approaches. Will his long anticipated report ring in the New Year?

[09:15:00]

[09:15:00] JIM SCIUTTO, HOST, NEWSROOM: The Kremlin is now recommending that the Syrian government led by its close ally Bashar al-Assad take over territory soon to be vacated by U.S. forces there. As you know, President Trump has ordered a complete withdrawal of America's 2,000 troops in Syria, claiming that ISIS is defeated or largely defeated or decimated or perhaps someone else's problem.

David Rohde joins me now, he's the executive editor of "The New Yorker Online" and Cnn global affairs analysts. David, thanks for joining us this morning.

DAVID ROHDE, EXECUTIVE EDITOR, THE NEW YORKER: Thanks for having me.

SCIUTTO: So David, I suppose we shouldn't be surprised by this despite President Trump's claim that Russia is sad to see U.S. forces go. In fact, that serves their interests. So now, we have the Kremlin saying that Assad, their ally, should move in the territory that's being abandoned by U.S. forces there. We shouldn't be surprised, should we?

ROHDE: No, and this is essentially the victory that, you know, Vladimir Putin has pushed for decisively and successfully in Syria. This is the end of the American presence there, it's a complete reversal of the American policy that was outlined several months ago to keep American troops in Syria to counter Iran, to counter Russia and most importantly to battle what's left of ISIS.

SCIUTTO: Yes, and it's interesting. I spoke to a senior administration official yesterday who told me that just in the last weeks, John Bolton, the national security adviser for the president had instructed U.S. officials to go around the region, and said the U.S. would stay there until Iran left.

[09:20:00] So a flip even in the span of days and weeks. Just before Christmas, you posted a very sharp story about how Donald Trump -- and this is the headline, Donald Trump thinks the war on terror is over or does Donald Trump thinks the war on terror is over.

You say that he is betting that it is. Explain what you think.

ROHDE: So I think that since 2001, two presidents, President George H.W. Bush and Barack Obama very careful about being tough on terrorism. Aside from the horrible human cost for an American president, any major attack on the United States since 9/11 is a real political risk.

If another attack occurs, that president would be attacked by opponents for being weak on terrorism. And Donald Trump, I think by pulling his troops out of Syria with the Islamic State is still active, is taking a major risk. And then he's cut the number of troops in Afghanistan.

I think Afghanistan is less of a national security risk, but in both countries, Trump is betting that there will not be a subsequent attack here in the United States. And it's -- again, no president has done this for 17 years, so it's a major risk, I think, on President Trump's part.

SCIUTTO: And the fact is President Trump claimed ISIS -- wrongly claimed that it was defeated. ISIS is still present in Syria, al- Qaeda is still present in Afghanistan there. How does the president reconcile those facts with a policy of withdrawal here? Or is he just making a political judgment that he needs, quote, unquote, "a win by bringing the troops home?"

ROHDE: He has, you know, promised his supporters that he would bring, you know, our troops back and get us out of these foreign wars. He sort of, you know, I used the phrase "the have it all presidency in the story", we're going to have security without, you know, having to make any sacrifice, and that's the real question.

Intelligence officials, you know, tell me the president, when he hears information, he doesn't agree with such as --

SCIUTTO: Yes --

ROHDE: That Saudi Arabia's Crown Prince, you know, sanction the murder of the Saudi journalist or that North Korea is still building a nuclear weapon, he sort of dismisses it. So --

SCIUTTO: Yes --

ROHDE: It's unclear, you know, he's made this decision, and again, we'll see what happens over time, but there is a clear risk --

SCIUTTO: Yes --

ROHDE: Particularly of an Islamic State attack, I think on the United States.

SCIUTTO: Or when the president dismisses that Russia interfered in the election to his benefit, you know, repeatedly dismissing the best judgment of the U.S. Intelligence Committee. David Rohde, I wish you and your family the best during these holidays.

ROHDE: Thank you.

SCIUTTO: Well, the Dow opens in just minutes. What will investors do after that massive selloff on Christmas eve? Continuing to sell off through weeks and months, we're going to be right there on the floor.

[09:25:00] (COMMERCIAL BREAK)

SCIUTTO: The gifts have been open, the food has been eaten, now it's time to head back home. But for the millions of people traveling today, severe weather is making the commute treacherous. Last thing you want to hear. Meteorologist Jennifer Gray is here. Jennifer, we're talking about lots of snow for some parts of the

country, severe storms in others. Tell us what you're seeing out there and what parts of the country folks are traveling should they be most concerned?

JENNIFER GRAY, METEOROLOGIST: Well, Jim, this is mainly impacting the country's mid-section, but it is going to cause craziness across the airports from coast to coast with snow up to the north, rain to the south. We have that severe storm risk as you mentioned.

We could see blizzard conditions as well. And you can see those Winter storm warnings stretch all the way from southern Colorado all the way up to the northern plains, the upper Midwest.

We are talking about major snowfall totals anywhere to a foot to a foot and a half of snow across this entire area. So we're going to see big-time airport delays, and that's going to trickle across the rest of the country. Doesn't end there. Extending down to the south, we have a rain threat, the severe weather risk is very real across much of Texas, hail-damaging winds, the possibility of isolated tornadoes.

And you can see this rain getting its act together, there's that line of showers and storms is going to push through the east as we go through tomorrow. So airports aren't going to get any better tomorrow, especially across the south and we'll also have lingering snow showers in the north tomorrow as well.

So this is through Friday, you can see four to six inches of rain across much of east Texas, two to four across the deep south, one to two inches across much of the rest of the south. So it is going to be a big mess, unfortunately, Jim, for a lot of people trying to travel home, not only from the airports, but the roads as well.

SCIUTTO: Oh, goodness, that's rough news. Jennifer Gray, thanks very much, but always good to know where it's happening. We are just moments away from the opening bell on Wall Street, this after the worst Christmas eve drop ever. So far markets on track for the worst December since -- you're hearing this right, the "Great Depression".

And President Trump is now looking for someone to blame. A source tells Cnn, the Treasury Secretary Steve Mnuchin's job could now be in serious jeopardy, adding that Mnuchin is -- in the words of this source, "under the gun". Chief business correspondent Christine Romans is with us, as is business correspondent Alison Kosik at the New York Stock Exchange.

Alison, first, looking at the markets here, how are they responding to the president's attacks on his Treasury Secretary, et cetera?

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Well, the initial response is what we saw on Monday where we saw that massive plunge in the Dow. We saw that more than 2 percent move in the S&P 500 that helped it move into bear market territory.

That's a 20 percent or more drop that is certainly identified as a lot of pessimism in the market.

(BELL RINGING)