Return to Transcripts main page

New Day

Wall Street Braces for Another Wild Day After Steep Losses; Another Migrant Child Dies While in U.S. Government Custody; Government Shutdown Continues over Border Wall Funding; President Trump Comments on Contracting the Building of Part of Border Wall. Aired 8-8:30a ET

Aired December 26, 2018 - 8:00   ET

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

[08:00:00] UNIDENTIFIED FEMALE: -- has died while in their custody.

UNIDENTIFIED FEMALE: These tragedies are happening because Congress and the administration have not adequately provided resources.

UNIDENTIFIED FEMALE: To have it happen in U.S. custody twice, it's beyond words.

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

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

UNIDENTIFIED MALE: For him I think it's about pleasing his base. Where does that end, I don't know.

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

TRUMP: They are raising interest rates too fast but I think it will straighten.

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

(END VIDEO CLIP)

UNIDENTIFIED MALE: This is NEW DAY with Alisyn Camerota on John Berman.

ERICA HILL, CNN ANCHOR: Good morning and welcome to your NEW DAY. It is Wednesday, December 26th, 8:00 in the east. John and Alisyn are off this morning, so you get me and John Avlon. Good to have you with us this morning.

HILL: We do begin on this Wednesday morning with breaking news. The U.S. Customs and Border Protection ordering medical checks on every child in its custody after an eight-year-old Guatemalan boy died while in U.S. government custody. That happened Christmas Eve. His is the second death of an immigrant death while in the agency's care in the last month.

JOHN AVLON, CNN ANCHOR: This tragedy highlights the stalemate between lawmakers and President Trump over his demand that they approve $5 billion to construct a border wall. The president isn't budging, vowing a government shutdown will continue until he gets the money he wants. We're now at day five of the shutdown with no apparent end in sight, and all of this comes as CNN has learned the president's treasury secretary may be in, quote, serious jeopardy after failing to calm the markets.

HILL: Joining us now to discuss, CNN political analyst and senior political correspondent for "The Washington Examiners" David Drucker, CNN political commentator and former White House director of legislative affairs Marc Short, and CNN political analyst and "Washington Post" Congressional reporter Karoun Demirjian. Good to have all of you with us this morning.

I want to go back to this breaking news that we have. The Customs and Border Patrol is now saying there needs to be medical checks for every single child in its care. Here's the issue. CPD says they don't know, telling the A.P. they don't know exactly how many children are in their care. And as we learned last week, Secretary Nielsen also wasn't clear on the number of deaths. Take a listen.

(BEGIN VIDEO CLIP)

REP. HANK JOHNSON, (D) GEORGIA: How many children 17-years-old or younger have died in DHS, ICE, or CPB custody since you took office?

KIRSTJEN NIELSEN, HOMELAND SECURITY SECRETARY: I will get back to you on that figure. What I can tell you is that we have saved 4,200 migrants who were --

JOHNSON: Approximately how many have died?

NIELSEN: I understand your question, sir. I will get back to you.

JOHNSON: Can you give me an approximate figure?

NIELSEN: I will get back to you. I'm not going to guess under oath.

(END VIDEO CLIP)

JOHNSON: Marc, on the one hand, you understand not wanting to guess under oath. But I would find it surprising that Secretary Nielsen would not anticipate that type of questioning based on what we had seen in the months prior. Are you surprised at all that those numbers were not readily available and that even today CPB can't tell how many children are actually in their custody?

MARC SHORT, FORMER WHITE HOUSE DIRECTOR OF LEGISLATIVE AFFAIRS: Erica, I think that the secretary is in a tough spot there because obviously there's going to be questions that follow up on that. And so I think it is right for her to come back and say let me give you a specific answer. But I think it also underscores a problem we have in which the laws we have tried to articulate, we have created this problem where human traffickers and coyotes encourage people to bring young children across the border with them because they know they will be granted asylum. They'll be put into a system that makes it much more difficult to remove that family from the United States. And so we do have problems that need to be fixed with the laws here in the United States of America.

HILL: But none of what you're saying accounts for, in all honesty, not knowing exactly how many children are in custody, which has been an issue now for months. There is something surprising, or perhaps not, that it still hasn't been addressed, and we are faced with this question even as Customs and Border Protection is saying we need a medical check for every child in our custody.

SHORT: Right. I think one of the challenges that we've faced so far with some of the tragic incidents we've seen over the last couple of months is that agents, the experience is you ask the parents if their child needs medical care, and you can imagine the parents in that situation being intimidated and often say no. And so then the children are denied medical care when perhaps they should have been getting it. So now it seems that what CPD is issuing is a change of policy to say we're simply going to do a medical check regardless -- without asking whether the child needs the care or not. So I think that's probably a step forward.

AVLON: Certainly the status quo is not working. Two dead children on the U.S. government's hands is a terrible thing for our country.

Karoun, let me turn to you because, we are still in the midst of this shutdown, of course, and there seems to be a stalemate on Capitol Hill. With Congress coming back tomorrow, what are you hearing about any deal that could be made, or are folks basically resigned to kicking the can to after January 3st when Nancy Pelosi takes over as Democrat leader -- as speaker of the House, rather?

[08:05:07] KAROUN DEMIRJIAN, CNN POLITICAL ANALYST: If there is a deal to be made in the short term or in the immediate term, it's not been publicized yet. At this point the two sides seem to be stuck. Everybody kind of put their hands, gave up, and went home for Christmas over the last few days. And now they're coming back and they're facing the same reality they were over the weekend, which is that they are stuck kind of stuck.

The president is making this demand to have wall funding be part of this deal. Democrats do not want to shake hands on the deal. Senate Republicans wish they weren't in this situation. They are completely happy just passing a more clean extension of the budget, and House Republicans don't really have an incentive to make any sort of a deal before they exit in just a few more days, and House Democrats, same deal, because they're taking over in just a few more days.

And so you are basically heading back into what is just things that have been ground to a halt. I don't think that absent some sort of major breakthrough between Trump and the Democratic leaders in Congress you are going to see any sort of dramatic movement in the next few days, unless they can come up with some sort of short term agreement to actually pass a budget that would keep the government open for a few more days, but that would require all these lawmakers coming back to D.C. which they are not inclined to do, especially if they are basically heading towards retirement.

So you are probably looking at a situation in which in the very opening hours probably of the new Congress, you've got Democrats trying to pass a cleaner budget and hoping that the Republicans in the Senate pick that up and putting that just in front of President Trump and making him make the call to continue this sort of a shutdown, because at this point right now, it is a blame game, pointing the fingers across the aisle, not really a solutions game trying to make a deal where there is very little trust between both sides.

HILL: Very little trust and very little incentive on either side, frankly, to make a deal, as we know. Lots of incentives to continue digging in their heels. David, as we watch all of this play out, it was also remarkable to watch the president yesterday with a captive audience as he was doing some of these calls, basically airing his grievances. I want to play that and then just get your take.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I can't tell you when the government will be open. I can tell you it is not 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, 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.

(END VIDEO CLIP)

HILL: The president offering up a lot there on Christmas in addition to his Christmas wishes. David, when we look at all of that, what's remarkable, too, I found, was the president phrasing, saying, we'll call it a wall, we'll call it a fence, we'll call it whatever you want, which is fascinating because the president was very clear in the past, this is not a fence. This will be a wall. Is that a sign that there could be maybe a little bit of wiggle room, even if it is just semantics for the president?

DAVID DRUCKER, CNN POLITICAL ANALYST: I don't think so. It doesn't mean that we're not going to have a deal of some sort at some point. But I think that the president has to figure out exactly what kind of deal he wants to make, and then he has to try and negotiate a deal in a way in which his negotiating partners are able to make the deal.

So much of this has become, Erica, about Trump, and politically right now that is not healthy for the president because Democrats especially coming out of the election but because they are taking over the House of Representatives don't have an incentive and don't have the political wherewithal with the Democratic base to deliver a wall that is Trump's wall.

And all of the talk about what Democrats approved some years ago was a part of an amnesty deal. So I'm sure if the president wants to offer a path to legalization or citizenship for 11 to 12 million illegal immigrants in the country, I'm sure that's a deal that the Democrats can make. I don't think it's a deal the president wants to make. And when you look at how he backed away from his deal to keep the government open through the holidays, I don't think it's a deal that his base would stand for, which would put him in a really tough spot.

So the president I think needs to get away from personality driven politics and try and work a legislative system in which he has a large degree of influence if he chooses to use it. And what's really remarkable to me when you look back on the past year, but especially the past two years, is how he never really worked the system and tried to get a major legislative overhaul of U.S. immigration law, never mind the wall. If you were to go ahead in 2019, because Democrats actually control part of one branch of government now, in some ways there may be a better dynamic for negotiating.

But as long as the president insists on playing electoral politics in the middle of legislating, it's going to be harder to do because there's going to be, number one, no trust between Democrats and him to get something done. But also, if you are beating up on your negotiating partner personally, it is harder for them to cut a deal and feel good about it.

[08:10:05] That is just the way Congress works. And I think that's one of the things that's going to stand in the way, not only of reopening the government, but of the president getting anything he wants on immigration.

AVLON: Speaking of that dynamic, Marc, I'd like to play a clip from the president's comments yesterday and ask you to clarify something for us. Let's take a listen.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Yesterday I gave out 115 miles worth of wall, 115 miles in Texas. That's a big stretch, because we're talking about 500 to 550 miles. 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 VIDEO CLIP)

AVLON: Marc, the president there saying that he signed off contract apparently for 115 miles of wall yesterday, seems to indicate he does so unilaterally. Just clarify for us, does the president have the power to do that?

SHORT: John, he doesn't. But Congress has given him the ability -- has put down money to allow him to begin negotiations on eminent domain issues. And so I know he had a meeting with Secretary Nielsen. I'm guessing here, but I'm assuming there are conversations that went along where they could possibly build the wall, where the property would be. But I think that David's previous comments are 100 percent right. The reality is as long as this is personalized, it becomes difficult to get a deal. As we discussed with Erica just a couple days ago, if this wall was more what Customs and Border Patrol was asking for as opposed to being perceived as Trump's wall, it would take some of the politics out of this.

AVLON: Sure.

HILL: It would be remarkable to take some of the politics out of it.

The other part of it that's interesting, too, though, is the president putting out, and maybe Marc, maybe his misunderstood in that meeting, but putting out things like saying, I just approved this 115 miles. The White House can't answer our questions on where that is. As you say and as we all know, the president can't do that. Congress has to approve the funding, which they did approve some funding, but not for 115 miles back in March. The contracts have to be branded. Part of that goes to the CPB with the Army Corps of Engineers. Part of that has been done.

Karoun, as we look at all of this, when the president continues to throw out inaccuracies or make things up, it also takes away from not only are we injecting the political, but also it makes it hard to do a compromise or some back to someone who is not using facts.

DEMIRJIAN: It definitely is. The president is prone to inflating numbers and to bluster about how much he has done, even in situations where he can't. And this is definitely one of those. But this just of goes -- it is a parallel to what has been going on for the last few weeks, frankly, which just the general deal making attempts to keep the government open, which is the president changes his mind and says whatever is on his mind. And that can alter from day-to-day.

So if you are actually talking about hard numbers that the president is having to agree to, that becomes more difficult to be somebody who just fudges them all the time. Also, if he is going to take whatever you actually do and run with that on a political message which does not actually reflect reality, that makes it more difficult for the Democrats to even give him what they might give him under the circumstances if he was going to actually got to the cameras, go to his base and be honest about what that was. And so there's less incentive for them to give him anything if he's just going to take whatever he gets and inflate it for the purposes, he said it himself, of wanting to get this done before the election. And the election is really what matters to him in terms of being able to extend his stay in the White House.

AVLON: Well, there is no question he's ended the second year on a rough note.

Marc, I want to get your quick reaction to a comment Senator Claire McCaskill made over this weekend. Let's take a listen.

(BEGIN VIDEO CLIP)

SEN. CLAIRE MCCASKILL, (D) MISSOURI: They're keeping their head down. And here's what they're rationalizing in their heads. They will tell you, if it is just the two of you, the guy is nuts. He doesn't have a grasp of the issues. He's making rash decisions. He's not listening to the people who know the subject matter. But in public, if they go after him, they know they get a primary. And they know that's tough.

(END VIDEO CLIP)

AVLON: Marc, you represented the administration on Capitol Hill. Does that ring true to you? Have you ever heard a Senator of the Republican Party say such a thing in private about the president?

SHORT: No, I'm not sure we should be listening to Claire McCaskill as the subject matter expert on Republicans. But I do think there is a reality that this president was an outsider, and that he's somebody who is not accustomed to this system, and there's plenty of people here who have been here for, frankly, decades, who are probably uncomfortable with the way the president manages the White House, and that is, I think, one of the tensions. But I don't think that probably Senator McCaskill viewpoints maybe reflect Senator Corker or Senator Flake's perspective, and I don't think it's a broad swap of the Republican Party.

HILL: Marc, David, Karoun, good to have you all with us this morning. Thank you.

U.S. market set to reopen for trading in just a little over an hour from now, following the worst Christmas Eve ever. Could we be headed toward a recession? Our economic experts weigh in next.

(COMMERCIAL BREAK)

[08:18:07] ERICA HILL, CNN ANCHOR: Will Wall Street bounce back following the Dow's Christmas Eve plunge? Investors watching President Trump's repeated attack on the Fed and concerns the president has about his treasury secretary.

Joining us now, Rana Foroohar, global business columnist and associate editor for "The Financial Times," and Richard Quest, CNN business editor-at-large and the host of "QUEST MEANS BUSINESS".

As we move into this new trading day, obviously, we're going to be following very closely these markets after that massive drop on Christmas Eve.

But, Richard, as we look at all of this and with the president tweeting about Jerome Powell, the Fed chair and how unhappy he is, it raises questions about, yes, there is a strong economy. We keep seeing all of this. Yes, there's dips in the market, yes, it's tough.

Is there a sense the president gets the difference on all of these things?

RICHARD QUEST, CNN BUSINES EDITOR-AT-LARGE: He should do, but he probably doesn't. The reality is that live by the Dow, die by the Dow. This is a president that is never tired of reminding everyone how much the Dow is up since both the election and his inauguration. Well, most of those gains have just about evaporated. Although he is

not to blame per se, he is pouring gasoline on to the embers.

You have a market that is fragile. It's uncertain. It is worried. It is fearful that the 10-year bull market is over.

And quite literally into this last week, you had the true bull in the china top of Mnuchin at secretary and the president on the fed. What we saw last week was entirely avoidable and they made a bad situation worse.

HILL: It's fascinating that making that bad situation worse, is that the reporting that the president said Mnuchin, you have to do something here. Steve Mnuchin makes all of these calls from his vacation in Mexico on Sunday which did the exact opposite.

[08:20:05] We had this horrible day on Monday. But it's not just what is happening here.

Rana, you and I talked briefly about this earlier. But it's the global impact as well in terms of leadership in the U.S. and around the country. All of these things coming together are sort of the perfect storm. It gives people pause.

RANA FOROOHAR, CNN GLOBAL ECONOMIC ANALYST: No. There is two or three different baskets of problems right now. I mean, there is the stuff we knew was coming down the pipe. Corporate debt is at record levels. The markets are disconnected with the real economy.

I mean, as our stocks are really higher, stocks are doing well, but a lot of people haven't felt the recovery in their wallets. Jobs are -- you know, unemployment is low, but the quality of jobs being created is not so great. There's also the global conflict.

There's the U.S.-China trade conflict. There is what's going on in France, new worries about the eurozone. So, there is a big concern that we're headed to a global slowdown. And because global growth really represents most growth, non-U.S. growth, that could affect us. It's going to affect companies that sell into those markets.

And then you've got, as Richard says, the president creating all these other problems that we didn't really have to have. I mean, calling the independence of the Fed into question right now is the worst thing I can imagine him doing. And that's something that needs to stop or we will see a lot of volatility.

HILL: You know, what's fascinating is, we're getting reporting this morning that in fact the president could meet with the Fed chair in early days of 2019. And while they should be traditionally, it wouldn't be the first time that a president has met with the Fed chair, but it has happened less because it is supposed to be an apolitical position.

Richard, what do you think would come out of that?

QUEST: Oh, nothing, frankly. I mean, let's call it for what it is. I mean, if you look back to the 1970s, President Nixon -- if you listen to the tapes of President Nixon trying to pressure the then Fed Chairman Burns into moving the discount rate, and he's quite successful in the end. Burns does move.

Now we have social media. Powell is new in the job. He's caught between this incredible rock and a hard place. And, you know, let's take this last hike and rate. They have no choice after being beaten up publicly by the president. To fail to move would have looked like they were acquiescing to political pressure.

The president got exactly the opposite of what he decides, probably part because of his own actions.

FOROOAR: I love you flexing on that Fed history, by the way, Richard. That's pretty impressive, 1970s, Arthur Burns, wow.

You know, but I have to say, the Fed is between a rock and a hard place for a couple of reasons. Even if the president had done nothing right now, even if we didn't have all these issues with the shutdown, or with him criticizing Powell, there's really a robust and legitimate debate about whether the Fed should or shouldn't be raising interest rates.

But some metrics, the economy looks great. But by others, it is blinking red. There is a lot of froth in the stock market right now. We've known that for many years. We've been through a decade of low rates, easy money, record levels of corporate debt, that always precedes financial crisis and often precedes recession.

HILL: Richard, if you want to jump in on that.

QUEST: Yes. But the Fed, the Fed, could have been a little bit more sympathetic in their last statement. That weird thing about we'll look at data coming in followed by, well, we'll only do two, not three. The market was looking for a soothing balm, and what they got was don't worry, don't worry.

HILL: Well, for people looking for a soothing balm moving into today or even just through the end of the year, is there one out there?

FOROOHAR: Oh, boy. You know, I think that -- I'll tell you something. In the year ahead, I think that you are going to see companies doing more stock buy backs, right? Going into the market, buying back their own shares.

That always has the effect of bolstering the market. It is a little bit of a sugar high. But you could, once we get past the shutdown, fingers crossed, you should see a little bit of bounce back. It will be one of many ups and downs in the year ahead. But you could see the upside there.

HILL: The sense is really buckle up.

But when we look at these numbers, we're looking at not only the biggest New Years Eve -- I'm getting ahead of myself. Christmas Eve declines which we saw on Monday for the Dow and S&P, but the Nasdaq is already in a bear market, approaching territory there for your indices. So, there's a lot there that when you look at it, you say, I'm a little concerned.

QUEST: And you should be. You should be on several grounds. But, yes, to all intents and purposes, the S&P is in a bear market, the Nasdaq is in the bear market, and I have little doubt that before long they will be joined by the Dow. The issue now becomes how long and how deep.

[08:25:01] There seems to be a capitulation of professional investors, the market has collapsed in the sense of there is no interest in buying just at the moment. But as Rana was suggesting, there will come a time it will turn. Assets, good assets, strong companies are now at 20 percent, 30 percent cheaper than they were. And that when it happens, when it happens, and I'm not going to sit here and pretend I got any idea, because I did have an idea, I won't be sitting here and talking to you.

When it happens, when it happens, then there will be some good bargains to pick up liking the boxing day sales here in London.

HILL: So, we know exactly where you're headed after the segment is over then, Richard.

QUEST: Absolutely.

HILL: All right. I will send you my list. Always good to talk with you. Thank you both, Rana and Richard.

FOROOHAR: Thank you.

HILL: John?

JOHN AVLON, CNN ANCHOR: All right. Well, Democrats vowing to investigate the Trump administration when they take control of the House in New Year. President Trump calls that presidential harassment. We'll discuss, next.

(COMMERCIAL BREAK)

AVLON: When Democrats take over control of the House in the New Year, they say they plan to carry out their oversight duties and investigate the Trump administration vigorously. Here is how the president sees it.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Well, then it's probably presidential harassment, and we know how to handle that. I think I handle that better than anybody. There's been no collusion.