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Stocks Plunge after Gains; Backlash over Trump's Iraq Trip; Government Shutdown Negotiations; Sixth Day of Shutdown; El Paso Groups Take in Migrants; CBP Asks for Funds. Aired 1-1:30p ET
Aired December 27, 2018 - 13:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[13:00:20] DANA BASH, CNN ANCHOR: Hey, everybody, I'm Dana Bash, in for Brianna Keilar.
After an historic super-sized gain on Wednesday, the stock market is back in the red today. The Dow plunging more than 500 points earlier. Right now, where is it, down 363 points.
I want to get straight to CNN business correspondent Alison Kosik, who is on the trading floor. Also with us is CNN business editor at large, Richard Quest.
Alison, you are there riding the roller coaster straight from the floor. What are you seeing?
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Well, I'm certainly wearing my seat belt for this one. You know, this pullback that we're seeing today, not unusual considering that epic rally that we saw the Dow have yesterday, jumping over 1,000 points. So this is sort of par for the course when you see something historic like that happen.
And if you look at December, it's really been a volatile month in general. There have been 18 trading sessions in December, 11 of those -- in 11 of those, the Dow has made a triple digit move. So it's really been a volatile session, you know, both up and down.
Now, these end of the year gyrations come after we've seen heavy stock losses in general over the past several months. We saw the S&P 500, the Nasdaq enter bear market territory. That's a 20 percent drop from a recent high. The Dow fell 4,500 points from its peak in October. So you see the kind of outsized moves that the indices have been making. And what you're seeing happen now are these investment houses trying to square their books before they close the books on 2018.
BASH: Very interesting.
Alison, thank you.
Richard, put this in perspective for us. Why are we seeing such volatility? RICHARD QUEST, CNN BUSINESS EDITOR AT LARGE: You're seeing such
volatility because of computers and algorithms and, what, 80 percent of trading is done this way and they respond to trends. They feed upon themselves. And what happens, of course, is that they see the market going down, the computers push it even further, and then other programs kick in and bring it back up again because they've spotted bargains.
Look, Dana, we can dispense with yesterday relatively briefly with a simple comment that it was probably an aberration. There is absolutely no reason why, on a random Wednesday in December the market should go up 1,000 points, other than some pension funds were squaring their books before the end of the year. The president's chief economic adviser made some comments. The market had been oversold on Christmas Eve so the -- so that was why.
But, you know, did it change the mood? Did it change the tone? Did it change the outlook? Not a bit.
BASH: Yes. And as you both have been reminding us for days, bear markets sometimes, before we get to them, they have some spikes and some rallies. Thank you both. Appreciate your insight and your expertise.
President Trump is back at the White House now after his unannounced trip to Iraq. There we heart a lot of different things from the president. Here's a sample.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I wanted to come and see Iraq. I wanted to come and pay my respects.
Nobody has a military like us. But we're all over the world. We're spread out all over the world. We're in countries that most people have never even heard about. And, frankly, it's ridiculous.
We don't want to take advantage anymore by countries that use us and use our incredible military to protect them. They don't pay for it. And they're going to have to.
I think that a lot of people are going to come around to my way of thinking. It's not fair when we burden the -- when the burden is all on us, the United States.
(END VIDEO CLIP)
BASH: That trip stirred some controversy among Iraqi leaders.
I want to go now to CNN global affairs correspondent Elise Labott, who is with me now.
Good to see you, Elise.
Put this in perspective. You know the regions. You know the players. The fact that today the news coming out of Iraq is criticism of the president --
ELISE LABOTT, CNN GLOBAL AFFAIRS CORRESPONDENT: That's right.
BASH: Even some threats saying, you know, this is a sovereign country, you can't come here without asking.
BASH: But he went to a joint base. He saw U.S. troops.
LABOTT: That's right.
BASH: Is this a lot of internal Iraqi politics or does he have a real problem?
LABOTT: I think it's a little bit of both. You know, the Iraqi government is really in shambles. There's a lot of political infighting. There was an election in May. They still haven't seated a government. You have parliamentary factions like Muqtada al-Sadr, you remember that fiery cleric who's always wanted U.S. troops out.
But the way that the White House did it, they gave the Iraqis about two hours' notice, which, you know, you could understand why the White House did that because they didn't want any leaks and presidential security very important. But right now this government is in such chaos. And --
[13:05:04] BASH: The Iraqi government.
LABOTT: The Iraqi government. Well, some might say this one, too, but, yes, the Iraqi government. And the message to the Iraqis was, he wasn't even thinking about them. And, you know, obviously the meeting didn't take place because the White House didn't give enough notice. I'm not -- I'm not sure, no, that this prime minister would have wanted to meet with President Trump anyway.
BASH: Well, that's what I was going to ask.
LABOTT: This is now a very popular thing to do.
BASH: Well, right. I mean in a way, diplomatically --
LABOTT: He did him a favor.
BASH: Didn't he give the Iraqi prime minister an out?
LABOTT: He definitely did --
LABOTT: Because it wouldn't be good for an Iraqi prime minister, given the time constraints, to come to a base with U.S. troops.
I think what the president doesn't really have an understanding about what's going on in Iraq. We've talked about this. The government there, the chaos there is really not going to help the situation with ISIS. If the U.S. pulls out of Syria and there's a lot of chaos there, ISIS could take the advantage of the chaos in Iraq to reconstitute, maybe get even bigger. There's not a lot of reinstruction there. So the Iraqis are dealing on their own political mess.
For President Trump, it was something else. I mean these visits are really about the troops. So the idea -- it's not unprecedented that a U.S. president would not meet with an Iraqi leader.
BASH: That's right.
LABOTT: You know, but I think the political message that President Trump gave to the troops a little bit unprecedented in his own way talking about the border wall, talking about -- you know, he gave a kind of -- misled them about military raises.
BASH: Yes, he said it was 10 percent (INAUDIBLE) percent.
LABOTT: Exactly. And so he's having a little bit of trouble with his political message here. The Iraqis are having a problem with their political message there. I don't think it's interrelated, but certainly it left a bad taste in the mouth of a lot of Iraqis today.
BASH: Yes. And I'm glad you put that in perspective because if the president's plan is to take troops out of -- U.S. troops out of Syria, use Iraq as kind of the bouncing off place, for lack of a better way to say it, if -- he needs the Iraqi government not to be upset.
LABOTT: Well, he needs the Iraqi government in order to do that, exactly.
BASH: Thank you so much, Elise. Good to see you.
And the president only spent a few hours in Iraq before heading to Germany to see U.S. troops there. Then it was back to Washington.
CNN White House reporter Sarah Westwood is at the White House.
So, Sarah, let's talk about the government shutdown, which is still happening. It's day six of the partial shutdown. What are you hearing at the White House about any negotiations? Are there any?
SARAH WESTWOOD, WHITE HOUSE REPORTER: Well, Dana, there's not a lot of clarity about where things stand from the White House's perspective. The president appears dug in on his demand for funding for his border wall. But exactly how much he'd settle for is really unclear. He dodged questions yesterday in Iraq about whether he'd be willing to come down from that $5 billion demand to a $2 billion sum that could perhaps be touted as a compromise.
Now, the president took to Twitter this morning to push Democrats to accept more funding for border security, claiming that most of the employees who are not getting paid as a result of the partial shutdown are Democrats. And a note that this came just a few days after the president also claimed that many of the federal employees who are furloughed are somehow imploring him to fight for funding for the border wall. But, nonetheless, the president of the American Federation of Government Employees, that's one of the largest unions for federal workers, responded by saying a government shutdown doesn't hurt any one political party or any one federal employee more than another, it hurts all of them. It hurts their families and it hurts all of our communities. Let's get back to the matter at hand and get our government open.
Now, recall that a few days before Christmas, Vice President Mike Pence offered White House support for a border security package worth $2.5 billion if it included funding for the wall. Senate Minority Leader Chuck Schumer rejected that. And Democrats have floated going back to their original offer of $1.3 billion for border security in general, not money for the wall. But, Dana, President Trump is insisting on money for the construction of a physical barrier along the southern border still, not just border security in general. So talks still at a standstill at the moment.
BASH: Sarah, thank you so much for that update. Appreciate it.
So, will the president budge on his $5 billion line in the sand for that border wall? I'll put that question to my next guest who used to work for President Trump and deal with these very issues.
Plus, a renewed call for help. The head of Customs and Border Protection is demanding Congress help with the migrant crisis. This after another child died in Border Patrol custody.
[13:13:49] BASH: There is no movement that we know of at all on negotiations to get the government back in business as the shutdown grinds into its sixth day. While visiting U.S. troops in Iraq, the president had plenty to say about the subject and on politics. Let's listen.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: We're doing well. The problem is we need 10 votes in the Senate. And they have to be Democrat votes. They can't be -- you know, people are -- don't understand it. They hear we have the majority. Well, we have right now the majority by one.
Here's the problem -- yes, here's the problem we have. We have a problem with the Democrats because Nancy Pelosi is calling the shots, not Chuck. And Chuck wants to have this done. I really believe that, he wants to have this done. But she's calling the shots.
(END VIDEO CLIP)
BASH: Joining me now is Marc Short, former director of legislative affairs in the Trump White House and now a CNN political commentator.
Thank you for coming on.
MARC SHORT, CNN POLITICAL COMMENTATOR: Of course.
BASH: Let me ask you the question that the president was asked I think about three times when he was in Iraq, didn't give an answer, would he accept less than the $5 billion he is now demanding for the border wall in order to reopen the government?
[13:15:00] SHORT: Well, Dana, I think it depends. I mean I think the administration doesn't want to negotiate against itself, right, so they're going to want to say, what are the Democrats willing to offer.
I think that the plan that Customs and Border Patrol put forward basically was an $18 billion plan funded over about 10 years. The president wants to see that expedited. He doesn't -- I don't think it's less -- I think it's less about the $5 billion. It's more about, OK, give me assurances that this is actually going to get built. And if he got that, then I think he'd be willing to negotiate.
BASH: You were in the White House when there was a deal on the table to give a $25 billion chunk of change for the wall with a lot of other immigration changes, it was a bigger package, including giving the so- called dreamers, the people who came to the United States with their undocumented parents when they were kids, giving them legal status. He left that on the table. You were there as part of that. Now, looking back, was that a mistake?
SHORT: I don't think it was a mistake because what happened was the details there, Dana. When the details came forward, what he realized is that the population the Democrats were asking for was not just the DACA population. It also was the parents of DACA. It also was people who maybe could have been eligible but didn't apply. And so that population began to mushroom.
But, the point being is what you said, is that Democrats were willing to put the money on the table. So we know that there is a possibility to get a deal. I don't see it happening in the short term, but if this deal gets bigger and you bring DACA back into the conversation, the president has said he wants a resolution on the DACA population. So I think there's a pathway forward to get a deal, but I don't see it happening in the next few days. I think this is going to be a longer term shutdown.
SHORT: Well, because I think right now Democrats want Nancy Pelosi to become speaker and then feel like that will strengthen their hand. I don't see how it really change the dynamics too much because she'll pass a CR that she says is clean and has no wall funding. There's no incentive for the Senate to take that up, no incentive for the president to sign that. So we'll just go through these machinations for a few more days and at some point people get frustrate and say, OK, how can we get to the point where we can actually get a deal, which I still think is a few weeks off.
BASH: A few weeks?
SHORT: Yes, I do. BASH: I mean we're talking about, you know, federal workers, not just
in the D.C. area, but all across the country, thousands of them, who are going to go without a paycheck or two maybe, which means a mortgage payment, which means food --
BASH: Which means really basic things.
SHORT: Which will puts pressure on both sides for sure. I do think what's different in this case is that -- to previous shutdowns is the men and women in uniform have been paid through the Pentagon. You also have entitlement checks going out. So it is a more narrow population. It doesn't mean it's any less significant for them or troublesome for them, but in each shutdown previously back pay has been provided and I assume that that will be the case when this is resolved too.
BASH: I just want to -- before we move on to the economy, you do think that Republicans, even the most hardline Republican that you dealt with in the House in particular would be ultimately OK with giving legal status to dreamers as part of a border wall deal?
SHORT: I think some will, Dana. I think the reality is that there's going to be some Republican who don't want a big spending bill regardless, who would vote for it on the spending position anyhow.
BASH: And will the president be willing to buck those Republicans?
SHORT: Yes, I think he is. But, again, the question is, is the population you're talking about, the narrow ones who applied and the president thinks should be protected, or does it quickly expand and Democrats throw in a whole bunch of other populations and say, this is part of a larger dreamer bill? That's the question that sits in front of, I think, Democrats and Republicans in the negotiation.
BASH: Let's talk about the economy. The -- it -- we've been talking about it this hour and all week, the gyrations in the stock market. It was not unnoticed that things went soaring yesterday when the president was on a plane not able to tweet going to Iraq. He also have been very actively going after the Fed chair, somebody who he picked when you were working for him. You helped him get him over the finish line. Is that part of the problem or do you think it's more than that?
SHORT: I think it's more than that. I do think the markets in part responded to Kevin Hassett's comments yesterday that was assuring that Chairman Powell is safe in his job. I think that the Fed, in many cases, is responding to, frankly, 10 years of quantitative easing during the Obama years. We had an unprecedented number of basically zero percent interest rates that afforded people who had great assets the ability to loan money at zero percent interest rates. And it kind of created the two economies that I think helped to elected Donald Trump.
BASH: Would you dare tell the president that, because he doesn't believe that at all?
SHORT: Oh, I'm not sure that he doesn't, Dana.
SHORT: I think he does believe that -- that the zero percent interest rates for so long created a problem. Bu I think he's concerned --
BASH: No, but my point is that changing it now that he's in the White House.
SHORT: So now he's concerned that it has basically gone up seven times since he was president.
SHORT: And it is accelerated (ph). But I think that Chairman Powell is trying to compensate for a lot of things that happened before.
But I also think that the market is responding to other things. It's not just the -- the interest rates. It's also concerned about the administration's trade policy. And I think where this president is right is on China. I think in many cases you've seen corporations, others say, you know, frankly, other administrations have ignored this problem for far too long and this president's right. But I think there's also other trade advisers in the administrations that sort of embrace a 14th century mercantilist trade policy that concerns people in Washington --
[13:20:03] BASH: So you think his trade policy is a mistake?
SHORT: I think there are people inside his administration who view often trade with other countries as a zero sum game in which basically there's a winner and a loser as opposed to the reality that both countries can benefit based on competitive advantages. And I think that concerns the markets as well.
BASH: I mean that is the core of Donald Trump's ideology, has been for decades since he was a business man. He's not going to change on that.
SHORT: Again, I think he's 100 percent -- I think he's right on China. I think that what he's done there is something that other administrations have failed to address and problems have been brewing for quite some time. But I think that there's some advisers on his team that I think give great concern to people on Wall Street.
BASH: I think that's an understatement.
Marc Short, thank you so much.
SHORT: Thank you.
BASH: Merry Christmas. Happy holidays.
SHORT: Merry Christmas. Thanks, Dana.
BASH: Thank you. And the secretary of Homeland Security said she's headed to the border to see the new measures put in place after a second child died in Border Patrol custody. Details ahead.
[13:25:34] BASH: Aide agencies and local officials in El Paso, Texas, are bracing for another huge influx of migrants today. Immigration officers dropped off more than 500 people yesterday alone. But unlike the last few days, ICE notified area shelters ahead of time. The agency came under fire when officers released hundreds of migrants at a bus station over the weekend without any plan to house them.
I want to get straight to CNN's Dan Simon, who is in El Paso at one of those bus stations.
Dan, what's happening now with the migrants?
DAN SIMON, CNN CORRESPONDENT: Well, Dana, to fully understand this situation, you have to look at the historical context in terms of the way this has been handled in the past. Now, we know that migrants have been dropped off at different border communities for the last several years spanning different administrations. And -- but usually it's been done in a very humane way and in coordination with area shelters.
What has made this situation in El Paso so extraordinary and so different is that the shelters essentially did not get a heads up. So you had hundreds of migrants just essentially being dropped off here in the middle of the night, very cold, with nowhere to go.
Now the ICE authorities certainly paid the consequences for that from a public relations point of view. But now that seems to be over.
And in terms of the broader context, in terms of why this has been happening, I want to read you a statement, this is from Kirstjen Nielsen, the DHS secretary. She says, to be clear, Border Patrol stations were never intend to be longer term holding facilities for any individuals. Under current law, non-Mexican unaccompanied children cannot be released or removed from the U.S. They must be turned over to Health and Human Services for placement pending bed space availability. Moreover, family units are almost always released into the interior. In any case, they cannot be held past 21 days.
So that's the bottom line. If you're talking about a family unit, they must be released within 21 days.
BASH: Yes, it's -- look, it's not easy and the fact that they are being released with nowhere to go is one thing but another interesting point that she made there, and that you and I believe Nick Valencia there saw yesterday is that undocumented families are being released. And that is, I guess, probably the catch and release that the president didn't want to do.
Dan, thank you very much. I want to discuss more of this with Art Del Cueto, who is the vice
president of the National Border Patrol Council.
Thank you so much for joining me.
Before we talk, I want you to listen to what the commission of the U.S. Customs and Border Protection says he thinks is needed to help with the influx of migrants.
(BEGIN VIDEO CLIP)
KEVIN MCALEENAN, COMMISSIONER, U.S. CUSTOMS AND BORDER PROTECTION: We need help from Congress. We need to budget for medical care and mental health care for children in our facilities. And I'm committed to improving our conditions, even as we work on the broader problems, border security and, of course, solving the issues in our legal framework that are inviting these families and children to make this dangerous journey.
(END VIDEO CLIP)
BASH: Do you agree with that assessment of what's needed?
ART DEL CUETO, VICE PRESIDENT, NATIONAL BORDER PATROL COUNCIL: No, I definitely agree. I mean there's obviously other things that we need. We need better enforcement. And as we've said before, and we've been going back and forth is, we need a better barrier to prevent these individuals from crossing certain areas.
BASH: A better barrier. Obviously you mean a border wall?
DEL CUETO: Correct.
BASH: OK., And why are you convinced that the border wall would drive down the number of illegal immigrants? And I ask that because there are reports that in places like El Paso, where there is a wall, you're still seeing undocumented immigrants get across the border.
DEL CUETO: Right. Well, you'll still see some of them come across. What the -- what the wall actually does is it acts as a deterrent and it helps slow down the flow to allow the agents to actually go to those areas and make the arrests. It's been proven that in the areas that we do have a better barrier, that has happened. Now, there's other areas where, you know, we have, for lack of a better word, not really much of a wall there and those areas are still high volume areas, specifically in the Tucson sector.
[13:29:58] BASH: Do you -- and I'm guessing you believe that what's going on right now in Washington, and now I guess around the country, that the -- parts of the federal government are shut down over this very issue, do you believe it's worth it?