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Financial Markets Struggling After A Dismal December; Customs and Border Protection Ordering Medical Checks On Every Child In Its Custody; Trump Vowing Government Shutdown Will Go On Until Wall Is Funded. Aired 7-7:30a ET

Aired December 26, 2018 - 07:00   ET

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

[07:00:00]

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: The government's not going to be open until we have a wall.

UNIDENTIFIED FEMALE: The American people, they are all caught up in this political brinkmanship and frankly the president throwing a temper tantrum.

UNIDENTIFIED MALE: For him I think it's about pleasing his bates (ph). Where does that end? I don't know.

UNIDENTIFIED MALE: Financial markets are struggling after a dismal December.

TRUMP: They're raising interest rates too fast, but I think it'll straighten.

UNIDENTIFIED MALE: The independence of the Fed is a plead with the president to reconsider what is a very dangerous course.

ANNOUNCER: This is New Day with Alison Camerota and John Berman.

ERICA HILL, NEW DAY HOST: Good morning and welcome to your New Day. Alison and John are off this morning. I'm Erica Hill along with John Avlon, and a lot going on on this Wednesday morning. We do begin with breaking news. U.S. Customs and Border Protection now ordering medical checks on every child in its custody after an eight-year-old boy from Guatemala died on Christmas Eve. This is the second death of an immigrant child while in the agency's care in just the last month.

JOHN AVLON, NEW DAY HOST: This tragedy highlights the standoff between Congress and the President Trump over his demand for billions of dollars to construct a wall along the border with Mexico. The president doubling down, vowing the government shutdown will go on until his wall is funded. We're now in day five of this shutdown with no sign of any agreement, and all this comes as CNN has learned the president's Treasury Secretary may be in, quote, "serious jeopardy," after failing to calm the markets. We've got it all covered.

Let's begin with CNN's Nick Valencia live in El Paso, Texas. Nick - NICK VALENCIA, CNN CORRESONDENT: Good morning, John. Here we are less than three weeks in a (ph) seven-year-old Guatemalan girl died in Customs and Border Protection custody. Now, this time it happened to an eight-year-old boy. That eight-year-old migrating from Central America from Guatemala as well with his father and had been in Customs and Border Protection custody since December 18.

Along with his father, he was shuffled through a variety of processing centers, including one that was overcrowded. And according to a release sent out yesterday by CBP, it was one of their agents that initially noticed that this boy was having health problems. He was taken to the hospital, diagnosed with the common cold, but then he was kept an hour longer for observation because he had a fever.

Even though he had that fever, he was allowed to be released, and it was just a few hours later that night, in fact, on Christmas Eve that his condition deteriorated even through he was being given medication. He started being nauseous, was vomiting, and eventually lost consciousness and died at the hospital 14 hours since his symptoms were first noticed.

Now, this is the second time a child has died in less than a month. As I mentioned at the start of this report, and has lead to some action by the Commissioner of Customers and Border Protection. He released some of those action items yesterday in his statement. They include focusing on conducting secondary medical checks for all children, with a focus particularly on children under the age of 10. They're also considering federal help with medical care, bringing in the Coast Guard, more help from the Department of Defense, perhaps even custom - I'm sorry - perhaps even the CDC.

And one of the other actions items, they're working with ICE on transportation. Often times these migrants, when they're apprehended in the field, have to take - have to wait hours before they're put through the system or transferred to a processing center.

I mentioned that this was the second death in less than a month. It was just yesterday day that seven-year-old, Jakelin Caal who died in Customs and Border Protection custody, was laid to rest in her native country of Guatemala. Just and absolutely tragic scene there yesterday with the government of Guatemala now demanding answers to their questions here as what happened this time with an eight-year- old. They demanded the medical records for this eight-year-old boy and, as we understand it, have also interviewed the father to hear his version of facts. All of this, John and Erica, happening against the backdrop of what CBP calls a dramatic increase of unaccompanied minors and family units. Meanwhile, they're also dealing with the furlough which is stretching them thin. Erica -

HILL: Nick Valencia in El Paso this morning. Nick, thank you. Joining us now to discuss, Matt Gorman, former Communications Director for the National Republican Congressional Committee; Toluse Olorunnipa, White House Reporter for Bloomberg News; and Karoun Demirjian, The Washington Post Congressional Reporter. Good to have all of you with us. Toluse, I want to start with you because when we look at what is happening there along the border, what Nick has laid out for us, which, of course, we can't deny the connection with the shutdown there that Nick just referred to at the end. Any word at all from the White House on the death of this eight-year-old boy on Christmas Eve? The president has been rather vocal in the last few hours, certainly on Christmas day, but I haven't heard any mention of this.

TOLUSE OLORUNNIPA, BLOOMBERG NEWS WHITE HOSUE REPORTER: Yes, the president had a prime opportunity to weigh in and talk about this tragic death of a chilled in U.S. custody yesterday when he was speaking with reporters in the Oval Office and trying to give a Christmas message, but instead he talked about the wall. He talked about the disgrace that's happening in our country due to James Comey and the investigations that he calls presidential harassment. The White House has said nothing about the death of this young boy or the death of Jakelin Caal just a couple of weeks ago. And the fact that Treasury - or Department of Homeland Security Secretary, Christian Nielsen, went before Congress just a few days ago and could not tell members of Congress how many children had died in U.S. custody.

[07:05:00]

LORUNNIPA: This is becoming a major, significant problem for this administration after the separation of children from their parents earlier this year, and now there seems to be this sense of disarray within U.S. Customs and Border Protection that they aren't protecting the children that are coming across the border and that they're getting caught up in the politics and the president's much more willing to talk about the wall and the government shutdown and not so much about the tragic death of a child who came here and died in U.S. custody.

AVALON: Yes, and when he was focusing yesterday on the wall, Karoun, he mentioned that he'd signed off on a segment on the wall - contract for the wall. This raises a number of questions because the president didn't seem to go through any the processes nor have any deals - details on said deal. What's the reaction among members of Congress or what are you hearing about that alleged deal?

KAROUN DEMIRJIAN, THE WASHINGTON POST CONGRESSIONAL REPORTER: I mean, Congress has been divided about this wall within the GOP, across party lines for a very long time, and I think the president is trying to push ahead as much as he possibly can whether or not he has all the members of Congress that needs to have behind him to fund such a thing actually in line.

At this point you've got a stalemate on Capitol Hill because of all that tension over the wall, because there's just - there is no incentive for anybody to make a deal until the powers that be in 2019 actually enter the positions they're going to be in. Democrats are going to take over the House. Republicans in the Senate are frustrated with the president, but they seem to be not willing to publically - well, the leaders and the - who are returning next year seem to be not willing to publically break with him over this. So the president basically has this open space in which to try to set the message, and for him the winning message is the wall. It's not acknowledging the deaths of children because that would be detracting from his message and start to raise more questions about what's really going on at the border. So there are members that are very frustrated by that, but for - by in large, they are not - the ones who are speaking out are not in his party, or if they are in his party, they're not coming back next year. And so, he doesn't really have to worry about them in terms of what sort of political wrangling he's really going to be facing when we get to the point at which this shutdown deal is addressed in a more long-term way.

HILL: The president really had a captive audience, of course, yesterday when he was making those calls and went off on a number of tangents. It was sort of - it was more Festivus-esque than Christmas, which he had missed Festivus by a couple of days.

AVLON: (inaudible)

HILL: But even - let's listen to a little bit more of what he had to say because in that as well I just want to point out some facts that we're missing. So let's take a listen first.

(BEGIN VIDEOCLIP)

TRUMP: I can't tell you when the government's going to be open. I can tell you it's not going to be open until we have a wall, a fence, whatever they'd like to call it. I'll call it whatever they want.

Every one of those Democrats approved the wall or a fence or very, very substantial barriers. As soon as I said I want to build a wall, they were all against it. Take Comey. Everybody hated Comey. They thought he did a horrible job. The Democrats hated him. And once I fired him, everybody said, "oh, why did you fire him? Why did you fire him?" It's a disgrace what's happening in our country. But other than that, I wish everybody a very Merry Christmas.

Yesterday I gave 115 miles worth of wall. 115 miles in Texas. That's a big stretch because we're talking about 500 to 550 miles total. It's my hope to have this done, completed all 500 to 550 miles to have it either renovated or brand new by election time.

(END VIDEOCLIP)

HILL: So there is a lot that just happened in all of that sound that we -

AVLON: Yes.

HILL: - played, but the point that the president made at the end saying that he gave out 115 miles, just to be clear, the president can't grant contracts. Congress did approve some funding back in March. In November, some contracts were ordered (ph) for parts of that, but only about 33 miles of wall. And again, no answers from the White House on where this area is that the president is talking about. So all those questions remain and there are those facts that can sometimes be pesky and get in the way. Matt, as you look at all of this, this in many ways, though, is classic President Trump. Again, he has this captive audience. He can say whatever he wants in those moments, and whatever he feels, Matt, will make him look good.

MATT GORMAN, FORMER NATIONAL REPUBLICAN CONGRESSIONAL COMMITTEE COMMUNICATIONS DIRECTOR: Yes. I think what we're seeing is just how isolating the presidency really is. Bill Clinton once called the crown jewel of the federal penal system, meaning the White House. So I think what we're seeing is President Trump isolated from the rest of his family and friends down in Mar-a-Lago here at the White House stewing over these perceived slights and making public statements. But I think also it's a start of, quite frankly, his reelect. He needs and enemy and the other folks talked about, too, Nancy Pelosi and Chuck Schumer are taking that role that we saw Hillary Clinton fill in 2016. President Trump is at his best when he has an antagonist, and I think those folks will play the roll until a Democratic frontrunner emerges in Iowa and New Hampshire.

[07:10:00]

GORMAN: But make no mistake, neither party has any incentive to back down from this, the shutdown. I mean, I think it's - they're in every incentive to stand their ground, play their bases, and I think that's why there's no end in sight.

AVLON: So Toluse, given that what Matt just descried as essentially a Christmas kabuki around the shutdown of 800,000 people currently not receiving paychecks, what is the endgame you are hearing from White House aids or is it simply trust the president's gut and we'll deal with this when we have to?

OLORUNNIPA: Yes, it really is the president leading the train on this. Several White House aids do not know where the president's going to be from one moment to another. You have to remember that just a few days ago the presdient seemed to have signed off on the Senate deal that kept the government open. Mike Pence went over to the Senate and let the senators that they can vote on a deal to keep the government open, a continuing resolution through February 8, and then the next morning the president changed his mind. So a lot of White House aids are just waiting for the president to decide and decide how much he wants to dig in his heels.

We're getting closer and closer to Nancy Pelosi taking the gavel, which will give the Democrats a lot more leverage in this battle over whether to keep the government open. If she holds out until January 3 when Democrats take over, they could just pass a very clean funding bill to keep the government open and then force the Senate and the president to decide whether or not they want to continue to fight and keep the government shuddered even though there are hundreds of thousands of employees, many of who should be going back from their Christmas holiday today who are either going to be on furlough or working without pay. And I think as time continues to move forward, more people are going to feel the impact of this government shutdown, which so far hasn't had as much of an impact because of the holiday, because people were already off during the weekend. This is going to become much more of an issue if this drags on for days and days and days.

HILL: Karoun, there's also the fact that this could have been avoided, right? The president actually could have gotten - could have had a lot more money when it came to border security and the wall less than a year ago when this was up for debate, but that didn't happen. So as we move further and further along, I mean, how much more is there left to give at this point?

DEMIRJIAN: Right. I mean, back before he could have had $25 billion (ph) in exchange for making the deal on the DACA the - and he chose not to. At this point, I mean, the tradeoff is unclear, right? We're talking about a few billion dollars in an over $4 trillion economy. It's not a huge, huge, huge part of the country that they are stuck on right now, and yet they can't figure out actually how to trade around this one. There has to be something that Democrats are going to see if they can get for actually giving Trump more money towards his wall because otherwise he's just going to try to, you know, drip, drip, drip, get all the money that he needs to actually build this project and never have a full tradeoff the way that they started hoping that there could be some sort of - around the immigration issue each side gets something that they've wanted for a long time. But right now the two sides don't trust each other and it doesn't really seem clear where they're going to find and gain that trust. If they're able to make some sort of just meet in the middle money deal, OK, that's one thing. But again, there's no real incentive for them to do that until Democrats -

HILL: No.

DEMIRJIAN: - can say, "we decided to make this deal because we are in power now." But at this point where they're going to find that special thing that they can trade for probably about $3 billion, not clear.

HILL: It's also interesting that just a couple of days ago - we were talking about this on Monday - Mick Mulvaney had said actually the president is open to talking about other immigration solutions.

AVLON: Yes.

HILL: Not sure that's still the case.

AVLON: It's very unclear what's operative. And so, in the spirit of solutions, something vanishingly rare in Washington. Matt, I ask you if you were advising the president and Republicans, what would you say is a way out of this that could et the goveremnt open again?

GORMAN: I would say the only way - the only way out of this is to negotiate directly with Chuck Schumer. That's the only way this will end. You need Democratic votes in the Senate. Your leverage is rapidly decreasing. As many folks have said once January 3 hits, Nancy Pelosi becomes speaker at the other end of Pennsylvania Avenue. You have the new Democratic House Majority, and your leverage goes away very quickly. And if you couldn't get wall funding done with two years of complete GOP control of Congress, you're certainly not going to get it under Speaker Pelosi. That longer you wait, the less leverage you have. And so, you need to take it directly to Chuck Schumer, and whatever you two come up with, that's the deal.

AVLON: All right, Matt Gorman making the case for the fierce urgency of now. Thank you all for joining us on New Day. All right, now the president is going all in to get funding for his border wall. On day five, some are asking if it's worth the political cost. A former Republican senator who thinks the president is right joins us next.

[07:15:00]

AVLON: Its day five of a partial government shutdown, and President Trump says he's digging in on his demand for billions of dollars for his border wall, but it is worth shutting down the government to fulfill a campaign promise? Joining me now, CNN political commentator, Rick Santorum. Rick, welcome back, Merry Christmas

RICK SANTORUM, CNN POLITICAL COMMENTATOR: Thank you John, Merry Christmas to you and everybody out there.

AVLON: So senator, here's my question to you. If you were advising the president, what specific deal would you advise him to cut to presumably get his wall and get the government open again?

SANTORUM: It's just, to me, it's a little counterintuitive. The Democrats are opposing more money. I mean, I don't know. I can't remember the last time we had a budget battle where the Democrats fought and said we want to control spending. I mean, the Democrats are always asking for money for everything. The president doesn't seem to be concerned about that, which is counter to again, the traditional Republican ideas.

AVLON: Sure.

SANTORUM: So I guess the deal is, I mean, what money do the Democrats want. I mean, there's -- obviously they want border -- hey want DACA and a whole bunch of other immigration things, well, that's not going to be done in an appropriation bill. So what in the appropriation process you know, do the Democrats as far as more money, and try to -- try to do what's always done in Washington, which is to buy each other off, and see what their priorities are.

AVLON: Buy each other off. Wall right, so while the deficit and debt is being exploded by a Republican president, double down, that's the path to getting a deal you advocate?

[07:20:00]

SANTORUM: No look, I think the president has put himself in a position where he can't really back down. I mean, he has to come home with something to improve the security of our country at the southern border and part of that has to be some sort of physical barrier. And these are things that the president has legitimately campaigned for, talked about as president. And look, if I -- one of the things the president has not been very

good at is (inaudible) discipline, and this is an opportunity to sort of try out the 2020 campaign and see whether you can actually focus and -- he says he is going down to the wall, going down to the border in January, good idea. I would do a series of events leading up to that and continue to talk about the problems at the border and what it means to ordinary Americans.

AVLON: All right, so you're talking campaign style. Let's switch to substance, because senator, you've been a long-time hawk on the issue of Iran, but with the president's announced = withdrawal from Syria, a lot of experts say that puts Iran in the pole (ph) position in the region; increases their leverage. So, do you support the president's plan?

SANTORUM: Not at all. I really encourage the president -- as you heard, I'm a strong supporter of this president and believe the vast majority of his policies are sound. This one is not, this is not a good idea. As you mentioned, this will strengthen the hand of Iran at a time when Iran, you know, its economy is crumbling. We have an opportunity to, again, deliver a real blow to Iran here in Syria, which will hurt the regime at home. If that the president, which I believe he does, is to like to see a regime change in Iran. Doing what he's doing in Syria is not going to help that; this will embolden and give the Iranian government something to crow about back home.

Secondly, the way he did it in the face of the president of Turkey, basically abandoning our allies who the Turks see as terrorists, is just a horrible piece of foreign policy. And I just -- I'm very disappointed in the president, that he would do this in this fashion. I encourage him -- you know, look, the president has done a lot of things where he is -- where he followed his gut and done something and then thought better of it afterwards and said, OK, you know, look, I've listened.

And I think it's really important in this case for the president to listen. His base is not solidly behind him on this, there are a lot of populist-like -- I consider myself, you know, who don't want to be running around and engaging in all sorts of foreign activities, but do believe we need to stand by our allies, particularly allies who have fought and bled with us, as they have -- the Kurds have in Syria and the Syrian resistance. And for us to abandon them in such a fashion, is really going to hurt him politically. And I would encourage him to take a step back, listen to some of the wise people that he has around him and who were talking around the country and do a more gradual exit from Syria than what he anticipated.

AVLON: Now, you have been a criticism -- a critic of the so-called imperial presidency in the past, and so I'm wondering what you would say if a Democratic president called for the firing of his own Fed chair like President Trump reportedly did last week?

SANTORUM: I don't like the way the president deals with, frankly a lot of the independent agencies that he has to deal with. And I think the president has a right, and I think he's correct in saying what the Fed has done has been harmful to the markets, and I don't think helpful to the economy. I mean, it's just frustrating.

I know it's frustrating to him to see the Fed prop up the Obama economy, for eight years at zero interest rates as Barak Obama's tax and regulatory policies strangled the American economy, and as soon as Trump comes in and unstrangles the economy, the Fed comes in and tries to tighten it.

And I think the president would do better if he didn't just talk about rate increases, but talked about the quantitative tightening. I mean, you had all -- in combination with the rate decreases under Obama, you also had quantitative easing which further allowed more money to be out there. So the Fed is doing both, raising interest rates and tightening, both of which have a negative impact on the economy.

So it looks like -- I understand the president's perspective; it looked like under Obama the Fed was all for propping up this big socialist game that Obama was pushing, and now that we have a strong market-based president, it seems like the Fed is doing everything it can to constrain growth.

[07:25:00]

AVLON: Or you could say that it's within the context of larger economic saddles (pg) and it's trying to calm down the overheated market because of tax cuts.

SANTORUM: No, the president's policies have worked to loosen the economy, and I think he just wants the Fed to play a more neutral role than what I think is a little on the aggressive side. So I don't criticize him for criticizing the policies, but I think, you know, he's probably gone a little too much overboard on some of the specifics.

AVLON: Too overboard. OK, well that certainly was the conclusion of Tom Friedman over the weekend. I want to read you an excerpt part from a column he wrote and get your reaction. Here's what Tome Friedman wrote in the New York Times. Quote, "If the CEO of any public company in America behaved like Trump has over the past two years, constantly lying tossing out aides like they were Kleenex and tweeting endlessly like a teenager, ignoring the advice of experts, he or she would have been fired by the board of directors long ago. Should we expect less for our president?" So senator, my question to you, senator, is should we?

SANTORUM: We elected this man knowing full well what we were getting. I mean, this is what everybody seems to ignore. I understand Tom Friedman didn't vote for Donald Trump, I did, and when I voted for Donald Trump, I knew I was getting someone who was going to be a disruptive figure. Not just in doing some of the things that I really strongly support, but be a disruptive figure from his own management style or the way he deals with the press and the like.

We all knew that and it was a gambit we were willing to take; we thought Washington was so dysfunctional in its response to the American public. It's now dysfunctional in a different way but at least what we're seeing is policies, and this is why conservatives stand behind the president. We're seeing policies that are making America work better.

AVLON: Well presumably when you made that calculation, you didn't know he paid off accusers, for example, and can anticipate the number of aides going to jail, but that does raise this specific question. What could Donald Trump do to make you stop supporting him? Is there anything?

SANTORUM: Well, look, you gave an example. I mean his policy decision in Syria. Look, conservatives support the president because of the policies that he's enacted, because of the appointments that he's made, both in the judicial and the executive branch, that have executed policies that have made this country strong, both internationally and here at home. If those policies began to change, then he begins to alienate that very base.

It's not -- there's not a cult of personality around the president, there may be some. But I think the vast majority of conservatives like myself who support the president, support him on policy. And when he starts to makes radical policy decisions that depart from what he said he was -- what he was all about -- now this is one here -- he was going to leave Syria, and I want to leave Syria, too, but you do it in a way that is consistent with making sure that our national interests are being pursued, and in this case, they are not.

AVLON: Senator Rick Santorum, thank you for joining us on New Day.

SANTORUM: Thank you.

HILL: Incredible insider access to this White House, which he wrote about in fear. So what does Bob Woodward think now about how things are going now inside the west wing? Bob Woodward is with us, next.

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