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Shutdown Looks Certain To Stretch Into Next Week As House And Senate Adjourn After Short Sessions; Giuliani Sends Conflicting Signals On Possibility Of Trump Answering More Questions From Mueller; Putin: "Invulnerable" Nuclear Missile Ready To Deploy; Shutdown to Continue as GOP Leaders Say No House Votes This Week; Stocks Remain Volatile as Late-Afternoon Surge Erase Point Loss; Giuliani Sends Conflicting Signals on Possible of Trump Answering Further Mueller Questions. Aired 5-6p ET

Aired December 27, 2018 - 17:00   ET




[17:00:04] I'm Dana Bash, in for Jake Tapper. You can follow me on Twitter, @DanaBashCNN or tweet the show, @TheLeadCNN. Our coverage on CNN continues right now.

JIM ACOSTA, CNN CHIEF WHITE HOUSE CORRESPONDENT/ANCHOR: Happening now, breaking news. Failure to launch. Congress reconvenes but only for minutes as lawmakers signal the government shutdown will stretch into next week, with the blame game in full swing on Capitol Hill and at the White House. Is anyone looking for a solution?

Market madness. After plunging hundreds of points, the Dow Industrials stage a dramatic late afternoon comeback. What's behind the gut-wrenching ups and downs? And what will it take to ease the volatility and get the markets back on track?

Closing the loop. In a head-scratching pair of new interviews, President Trump's personal attorney, Rudy Giuliani, suggests the president is not answering any more questions from Special Counsel Robert Mueller, and that negotiations are still open. So which is it?

And Putin's punch. The Russian leader claims he's ready to deploy an invulnerable super-fast missile capable of evading U.S. defenses. How big a threat does it really pose?

Wolf Blitzer is off. I'm Jim Acosta, and you're in THE SITUATION ROOM.

ANNOUNCER: This is CNN breaking news.

ACOSTA: And we are following breaking news on both ends of Pennsylvania Avenue, where Congress and the White House seem able to agree only on one thing: the government shutdown is not ending any time soon. Within the past hour, Congress formally reconvened but only for a few

minutes and then adjourned until next week. Meanwhile, President Trump is back from his whirlwind trip to Iraq and tweeting excuses and taunts at Democrats.

We'll talk things over with Democratic Congressman Gerry Connolly, a member of the House Foreign Affairs and Oversight Committees. And our correspondents, analysts and specialists have full coverage of the day's top stories.

Let begin at the White House and our correspondent Abby Phillip.

Abby, even though he's returned from Iraq, it did not take long for the president to dig in his heels about this continuing government shutdown.

ABBY PHILLIP, CNN WHITE HOUSE CORRESPONDENT: That's right, Jim. It's business as usual now for President Trump, who's back here at the White House and already blaming Democrats for this government shutdown that's going into its sixth and seventh day soon.

Now President Trump said on Twitter that Democrats are responsible for the shutdown, and he claimed that their opposition to the wall is really Democratic obstruction.

But we're getting signs from the president's closest allies, including Mark Meadows, the House Freedom Caucus chairman, in just the last hour, saying that he sees signs that this shutdown could go on for quite some time.


PHILLIP (voice-over): With the government still partially shut down and no end in sight, President Trump was back at the White House and tweeting after his surprise trip to Iraq. After claiming this week that federal employees supported the shutdown --

DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: Many of those workers have said to me and communicated, "Stay out until you get the funding for the wall." These federal workers want the wall.

PHILLIP: -- the president is now taunting Democrats in a tweet by claiming, without evidence, that most of the 800,000 federal workers affected by the shutdown are Democrats.

That comment prompted backlash from one of the largest unions representing federal employees. The head of the American Federation of Government Employees writing in a statement, "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."

The president doesn't appear to be budging from his starting position.

TRUMP: Whatever it takes. I mean, we're going to have a wall. We're going to have safety. PHILLIP: Today White House press secretary Sarah Sanders doubled

down, saying in a statement, "The president does not want the government to remain shut down, but he will not sign a proposal that does not first prioritize our country's safety and security."

Yet while in Iraq Trump repeatedly refused to say if he'll compromise and accept less than $5 billion in wall funding.

UNIDENTIFIED MALE: Mr. President, will you come down from 5 billion to 2 billion for border security in the conversations with Democrats?

TRUMP: Well, as you know, we've already built a lot of wall. We're building a lot more.

UNIDENTIFIED MALE: But as a matter of negotiations, sir, have you come down from the 5 billion ask to 2 billion?

TRUMP: Here's the problem. Here's the problem we have. We have a problem with the Democrats, because Nancy Pelosi is calling the shots, not Chuck.

UNIDENTIFIED MALE: Will you accept 2 billion instead of 5 billion?

TRUMP: I'm not going to talk about it now, but I will say this. We have been building a lot of wall.

PHILLIP: Even on his first trip as president to a U.S. combat zone, Trump's penchant for politicizing events with the military continued. As soldiers looked on, he once again attacked Democrats and pitched his border wall.

TRUMP: We want to have strong borders in the United States. The Democrats don't want to let us have strong borders. Only for one reason. You know why? Because I want it.

PHILLIP: The president also drawing criticism for rallying troops with a lie about their salaries.

TRUMP: You just got one of the biggest pay raises you've ever received.

They said, you know, "We could make it smaller. We could make it 3 percent. We could make it 2 percent. We could make it 4 percent."

[17:05:05] I said, "No. Make it 10 percent. Make it more than 10 percent," because it's been a long time. It's been more than ten years.

PHILLIP: The facts: military pay has increased every year for three decades, and the Trump-era pay raises have each been less than 3 percent, not anywhere near the 10 percent he claims. Still, the president keeps repeating it, over --

TRUMP: In 2019 we want to give you your largest pay raise in over a decade.

PHILLIP: -- and over.

TRUMP: That also includes raises for our military, so --

First time in ten years.


PHILLIP: And the White House accused Democrats of leaving town while the government was shut down, but it should be noted that both parties have actually left town, including one of the president's top negotiators, his son-in-law, Jared Kushner.

Now the president does remain here, and there are no signs at the moment that he plans to resume his plans to go down to Florida at Mar- a-Lago, where the rest his family is for the holidays -- Jim.

ACOSTA: But we're still here tonight.

All right. Abby Phillip, thank you very much. We appreciate it.

Let's see if there's any progress up on Capitol Hill, where the House and Senate formally reconvened about an hour ago. CNN's congressional correspondent, Phil Mattingly, has been talking to party leaders.

It does not look very crowded from where you're standing right now, Phil. What can you tell us? What's the latest?

PHIL MATTINGLY, CNN CONGRESSIONAL CORRESPONDENT: Yes, it's mostly empty. The House and Senate did reconvene, and they stayed in session for about a total of, combined, eight minutes. It was something that underscored, at least on both the House and Senate floor, that there's not a quick resolution in sight, something that was also made clear if you just walked the hallways of Capitol Hill or the Capitol building. Nobody was here. Lawmakers had gone home. They had been told that there would not be any votes any time soon. In fact, the House has already made clear there will not be any votes this week. The Senate adjourned and is not scheduled to come back until next week.

Now, the caveat here, Jim, is both parties in both chambers have said if a deal is reached, they will come back and vote on it within 24 hours. But the behind-the-scenes reality here is what I'm being told from aides in both parties, in both chambers, is there is no progress. Things are frozen.

One person who's involved in these negotiations said you need to start viewing this shutdown in terms of days; you need to start viewing it in weeks.

Now, Nancy Pelosi's spokesperson, the Democratic leader of the House, did respond to the statement that Abby read off from Sarah Sanders earlier today, and they made clear that, while the vice president and Jared Kushner, Mick Mulvaney, the incoming chief of staff, did put an offer on the table of about $2.5 billion in border security last week, and they hadn't gotten an official response to that, Democrats have not moved off their negotiating position. Those are three different stop-gap bills, about $1.3 billion in border security. And Leader Pelosi's spokesman made it clear that when Democrats take the majority on January 3, they will move quickly to pass a clean stop-gap bill and send it over to the Senate.

I will note, though, in talking to people in the Senate, it is very clear that that does not mean this is going to end any time soon. Senate Republicans are very wary to move forward on anything the president hasn't signed off on. They tried that before. It didn't work. Anything he would veto, they will not move forward on.

And so for now, with negotiations frozen, there's just very clearly, Jim, no end in sight on Capitol Hill.

ACOSTA: It's going to be a very cold January here in Washington. All right, Phil Mattingly, thank you very much.

The uncertainty here in Washington appears to be at least partly to blame for today's wild swings on Wall Street. The Dow Industrials followed up on yesterday's record point gain by plummeting some 600 points before a late afternoon surge wiped away the losses with the Dow ending in positive territory.

CNN's Alison Kosik is at the New York Stock Exchange. That was some wild day that you had to cover there today on Wall Street.

ALISON KOSIK, CNN CORRESPONDENT: A wild session it was, Jim. Stocks staging a huge comeback, the Dow erasing that 600-point decline, closing up 260 points. That's an almost 900-point swing a day after the Dow made history jumping more than 1,000 points.

The trading session marked by heavy volatility, as has been the month of December. The Dow has actually made triple-digit moves in 12 of the month's 18 trading sessions. The year-end gyrations come after heavy stock losses in the market overall.

The Dow is down thousands of points from its October peak. The NASDAQ not far from a bear market. That's a 20 percent drop from a recent high.

Year-end positioning, repositioning is responsible for a lot of volatility we're seeing, as investors are squaring their books as they close out the year.

But once the calendar changes from 2018 to 2019, investors are going to be look for clarity and certainty on a number of issues, including how many times the Federal Reserve is expected to raise rates, whether the trade situation between the U.S. and China will be resolved, and if there's going to be any stability coming out of the White House when it comes to Wall Street -- Jim.

ACOSTA: And Alison, should we expect more of the same tomorrow? Is this volatility just going to continue for a while? I know you can't make any hard predictions here, but it sure seems like that is the environment we're in right now.

KOSIK: Two days to go, two more days of trading I'm talking about, and, yes, expect more volatility as we get to the final trading day of 2018 -- Jim.

ACOSTA: OK. Alison Kosik, thank you very much.

KOSIK: Sure.

[17:10:07] ACOSTA: Joining us in THE SITUATION ROOM is Virginia Democratic Congressman Gerry Connolly. He is a member of the Foreign Affairs and Oversight Committees.

Congressman, thanks for joining us. Happy holidays.

REP. GERRY CONNOLLY (D), VIRGINIA: Good to be with you, Jim. Thank you.

ACOSTA: Good to be with you.

As the government shutdown continues, and we just saw Phil Mattingly talk about this a few moments ago, there aren't any lawmakers up on Capitol Hill. We'll take responsibility for you, since you're here in the studio with us. But it doesn't seem like there's any end in sight to all of this.

And the president was tweeting earlier today -- we can show some of this on the screen. I'm not going to read the whole thing, but he did blame Democrats and their "obstruction of the desperately needed wall," as he calls it for what's happening right now. Your response?

CONNOLLY: The president and his acolytes, Mark Meadows, who was on the previous program, are engaged actively in revisionist history.

Remember, a little over a week ago, a clean funding bill for the government passed the Senate unanimously without any fuss about a wall, and -- and we were told the White House would sign it. And what happened? A couple of talking heads, right-wing talking heads -- Laura Ingraham, Sean Hannity, Rush Limbaugh and the Freedom Caucus, led by my friend Mark Meadows -- went, you know, basically threatened to revolt, that he would lose support, he Trump, if he signed anything without a wall. And the White House did a complete about-face based on that, because that's what he watches consistently, FOX News. And -- and so he said, "I won't sign anything without $5 billion for my wall," a wall, by the way, that Mexico was supposed to pay for we all kind of forget.

So the burden is hardly on Democrats to produce something. What happened? Why did the president change his mind? What -- and what did he have in mind in doing that? And what is it the wall is supposed to accomplish?

And to hold the entire federal government hostage, because all he wants for Christmas is $5 billion wall Mexico is to pay for, is reckless and irresponsible.

ACOSTA: And how long could this shutdown last, do you think? Mark Meadows was saying in the last hour, it could -- there may be no end in sight. This could last a while. Is that -- is that something the American people should be bracing for at this point? CONNOLLY: I believe the first crack in this -- in this situation will

be when the Democrats come into the majority status on January 3, and I believe that one of the first orders of business will be to pass a funding bill and send it over to the Senate.

ACOSTA: Will it be something the president wants to sign, though?

CONNOLLY: That will be up to him, but he created this crisis, and now now wants, as is his wont, to blame somebody else for it.

ACOSTA: Doesn't -- don't Democrats, though, have some responsibility in all of this? If you come back next week, if you put out a bill that you know the president is not going to sign, might you at that point be open to some blame here that you're perpetuating this shutdown?

CONNOLLY: I think that's -- sadly, I think that's feeding the false narrative coming out of White House and the Republican enablers in the United States Congress.

Democrats didn't create this crisis. We had a responsible bill that was bipartisan that passed the Senate unanimously a week ago. And with respect to the shutdown, have we all collectively developed amnesia? I watched on television, as did you, Jim, the president of the United States say to Chuck Schumer and Nancy Pelosi, "I will take responsibility for the shutdown. Blame it on mem" he said. "You won't have to take responsibility." Now all of a sudden --

ACOSTA: But don't you have to take responsibility, to some extent, to find a solution?

CONNOLLY: Well, of course. We think we have a solution which is responsible border security but not some symbolic multi-billion-dollar wall that isn't going to work.

ACOSTA: So when Chuck Schumer says, "Mr. President, you're not getting your wall; you're never going to get your wall," that's the Democratic Party position at this point?

CONNOLLY: I can't speak for Chuck Schumer. He does not speak for the Democrats in the House of Representatives. But I think he -- his sentiment reflects enormous skepticism, well-deserved, on the parts of Democrats that this is nothing --

ACOSTA: You're in no mood to give the president a wall at this point?

CONNOLLY: Well, we're in no mood to play his political games. The wall is a symbol for him and his base. It's not a serious proposal to deal with border security, and we don't want to play that game.

ACOSTA: Let me ask you this. The president made several claims about federal workers during the shutdown. You probably saw this other tweet where he tweeted, without any proof, that most of the people not getting paid are Democrats.

You hail from Northern Virginia. You represent a lot of federal workers in your district: 55,000 federal employees, something like that. What are you hearing from your constituents, and is he right that all -- that most federal employees are Democrats?

CONNOLLY: You know, what an outrageous thing for a president of the United States to say. I have no earthly idea whether a federal employee is a Republican or a Democrat or an independent. And what is the relevance of that to a shutdown to an individual federal public servant not getting paid?

[17:15:11] And the idea that, well, there are Democratic federal employees and apparently, they deserve a good shutdown; and Republican federal employees, they deserve to get paid, is just outrageous.

And it's another kind of the divisive rhetoric and wedge posture by this president that doesn't serve the White House well at all. And I think once again brings this president to a new low when it comes to governing and federal operations.

ACOSTA: Let me ask you quickly about these wild swings in the market. We had the worst Christmas Eve on record just a short while ago, recovered yesterday; recovered some more today. But you heard Alison Kosik there say that we might be heading into a stretch here where you see just sort of wild swings, a lot of volatility in the stock market. How concerning is that to you?

CONNOLLY: It's very concerning, Jim, and I think it's another example of the president shooting himself in the foot.

So you've got low unemployment, strong GDP. You've got productivity and wage growth, and what does he do? He starts a trade war with some of our trading partners and then imposes big tariffs with one of our most important suppliers, China. He creates uncertainty in international markets, and then, of course, the government shutdown. The precipitous pullout of Syria upsetting allies and causing questions about our posture overseas.

Then, of course, he threatens to fire the Federal Reserve chairman, which really rattled the market. And then he sends in Mnuchin, his treasury secretary, as if he's sort of the Canadian Mountie to save the day, and what he does --

ACOSTA: Secretary Mnuchin. Yes.

CONNOLLY: He, Mnuchin, he actually plants more doubts, because all of a sudden, he brings up liquidity in banks, which nobody was worried about until he brought it up. All of that was a recipe for disaster this week on Wall Street, and it's created the volatility that, frankly, could undermine this economy if this is sustained.

ACOSTA: OK. Congressman Gerry Connolly, good to talk to you and happy new year. Thanks very much for coming in.

CONNOLLY: Great to see you, Jim.

ACOSTA: We appreciate it. Thank you. Coming up next, conflicting answers about the president's willingness to answer more questions in the special counsel's Russia probe. Will he or won't he?

Plus, an ominous development in the new arms race between the U.S. and Russia. Vladimir Putin says he's ready to deploy an invulnerable nuclear missile.


[17:22:00] ACOSTA: Tonight, there are conflicting signals about whether President Trump will take any more questions from Special Counsel Robert Mueller. In a new series of interviews, the president's personal attorney,, Rudy Giuliani seems to have said both no and maybe.

Let's bring in our senior justice correspondent Evan Perez.

Two different answers from Giuliani within 24 hours. What is Rudy Giuliani up to, Evan?

EVAN PEREZ, CNN SENIOR JUSTICE CORRESPONDENT: Well, look, I think part of this is a P.R. strategy, more so than a legal strategy. Rudy Giuliani is more on the P.R. side, public relations side rather than the lawyering, which is being done by the real lawyers behind the scenes.

But look, here, as you pointed out, is the different versions of Rudy Giuliani; and -- and he has different answers depending on who he talks to.

First, is an interview with "The Hill." Listen to what he had to say about whether or not the president would be answering any more questions.


RUDY GIULIANI, LAWYER FOR DONALD TRUMP (via phone): He's not answering any more questions from these people. Their outrageous activity. We did enough.


PEREZ: And as you pointed out, Jim, just probably within 24 hours of that, he spoke to "The Daily Beast" and he said, quote, "Negotiations haven't formally ended yet. They haven't ended because it's not -- it's not just my opinion that matters. There are other lawyers involved, and the president of the United States, of course, my opinion is I don't trust them."

And Jim, I think that's the answer, is that the lawyers aren't closing any doors, partly because it doesn't -- it makes no sense for you to close the doors --

ACOSTA: Right.

PEREZ: -- as long as the investigation is still going on.

ACOSTA: He said something about "not over my dead body" or something like that earlier.

PEREZ: He did say that. That was one of the -- one of the flavors of Rudy.

ACOSTA: Yes. Now something else interesting that he said. He said he hasn't stopped sharing his opinion on what's a crime in terms of the Russia investigation, telling "The Hill" it's only hacking that's a crime. What is he trying to set the stage for? Why is he talking about, well, the hacking could be a crime, but all these other things are not?

PEREZ: Look, I think this is -- this is a preview of what we're going to see. Now that the Democrats are coming in and they're going to start doing their own versions of this investigation, I think what you're going to hear from the president and his legal team and his supporters is that, you know, the whole idea of obstruction being a crime, that the president could be guilty of obstruction, is one of their talking points, is going to be a legal position that they're going to go for.

Here is Rudy also talking -- Rudy Giuliani also talking to "The Hill" newspaper about just this.


GIULIANI (via phone): If a campaign gets that material from them, either indirectly, which they did through the media, or directly even, as long as they're not involved in the hacking, I don't see where those people would be liable.


PEREZ: So I think you can expect to hear a lot more of that in the coming weeks and months as this -- as the Democrats sort of try to drive home the point that there was a crime here beyond the hacking, you know, that the president was guilty of obstructing this investigation.

We don't know what Robert Mueller and his investigators are going to find out, by the way, are going to return on this question, so I guess we're going to find out.

ACOSTA: Yes. Either he's telegraphing where this thing is headed or it's more of the fog machine.

All right. Evan Perez, thank you very much.

Coming up, the government shutdown blame game continues, with Democrats and the president blaming each other. What will it take to reopen the government?

[17:25:06] And later a new Russian threat in the revitalized arms race between the U.S. and Russia. Does Vladimir Putin have an invulnerable nuclear missile?


ACOSTA: And this hour's breaking news: today's much anticipated sessions of the House and Senate came and went within minutes this afternoon. It now appears the government shutdown will stretch into at least next week with no end in sight.

[17:30:00] Let's ask our analysts and experts about this blame game on both ends of Pennsylvania Avenue. And April Ryan, I'll go to you first. You've covered a number of these shutdowns over the years. What are the dangers of a shutdown like this where it seems both sides are in no mood to compromise. We had Gerry Connolly on here earlier, and he suggested that they may send a bill to the President that he may, in fact, want to veto. I mean --


ACOSTA: -- we're talking about a long protracted shutdown here.

RYAN: Yes. Well, the average shutdown typically lasts three days, but we saw back in 2013 in modern times where the longest shutdown was 13 days. I talked to incoming Whip, like I said yesterday, James Clyburn, who says that the Democrats are going to let the President stew in his juices, that's what, quote, unquote, what he said -- until they get back to work next week, where they're going to try to vote on something to stop the stalemate on the -- on the funding issue for a fence or what have you, not what he wants, $5 billion. But when you look at the impact of a shutdown, think about this, it's not about government ease. This is about common sense.

You know, the government shutdown happened before Christmas. Federal employees received their pay, most of them received their pay before Christmas. So -- but consumer confidence is not after Christmas and going into the New Year. Then you also have issues of those who are supported by government employees, small businesses who may have shops around these federal facilities that are closed. It just -- it's a trickle effect and it ripples into so many different areas, but the President talks about the economy. This is one area that left to his own devices. He's pulling down the economy with.

ACOSTA: And Sam Vinograd, I mean, the President, he's sort of throwing things at the wall so to speak and trying to see what sticks, this afternoon, he put up a new tweet saying this isn't about the wall. Everyone knows that a wall will work perfectly. He says, "This is only about the Democrats not letting President Trump and the Republicans have a win. They may have the 10 Senate votes, but we have the issue, border security. 2020!" What do you make of that? I mean, it sounds as though -- he says it's not about the wall when, really, it is about the wall, I guess.

SAMANTHA VINOGRAD, CNN NATIONAL SECURITY ANALYST: What wall are we even talking about at this point, Jim? Are we talking about "The Game of Thrones" season one tweet that he issued last week? Are we talking about a continuation of the existing 700 miles or so of fence, and funding for that, or are we talking about the beaded curtain that Speaker Pelosi referenced just yesterday? It's unclear what version of the wall the President is going for.

And it's worth noting, Jim, this is not just about Democrats. There are members of the Republican Party that do not agree with allocating $5 billion or so towards this border wall. We had eight members of the House, I believe, including Will Hurd who vote against the current allocation that the President wants, and the President is going to have to do some work within his own party while he's making comments about the Democratic Party to try to again define what wall he is trying to get funding for and to gather support.

ACOSTA: And Jeffrey Toobin, I mean, he has billed himself as the best dealmaker, the best negotiator. There's not a whole lot of negotiating going on in Washington this week.

JEFFREY TOOBIN, CNN CHIEF LEGAL ANALYST: There certainly doesn't appear to be. And the question is who will feel political heat here? You know, Donald Trump's strength is in the center of the country in states that don't have large numbers of federal employees or at least federal employees in places where they feel -- where they will have broad political impact. I mean, I think the President feels, you know, this shutdown is not hurting my people. It's not affecting them. Everything he does is geared towards his base, that's the way he's run his entire presidency. The base as far as I can tell is pretty pro shutdown, so it doesn't seem to me like he's in any hurry to get the -- to get the government back up and running.

ACOSTA: And Shawn Turner, the President thought his base was in Iraq yesterday, it seemed, if you listened to his speech. And going back to it, because we only saw it in dribs and drabs who was coming in yesterday afternoon, but he was attacking Democrats on this issue of border security, on this issue of the wall to a military crowd, to a crowd of troops in a combat zone. Looking back at that, given your national security experience, was that -- was that appropriate?

SHAWN TURNER, CNN NATIONAL SECURITY ANALYST: Yes. You know, with regard to this trip, Jim, the President had to do two things in order to get this right. The first thing was to actually make the trip. His decision to make this trip and to go, and to stand in front of the troops, and to reassure them that the American people supported their effort and supported what had they're doing there was the right thing to do, and I give him credit for that.

[17:34:51] The second thing that really mattered is what he said to the troops, because when you go there and you stand in front of troops, and it's the holiday season and they are away from their families, and they're dealing with the challenges and the danger that they're put in on the ground, then the President needs to strike the right tone, he needs to reassure them that it's not just their families back home that are thinking about them, but he's thinking about them, and that all the American people are thinking about them.

So, when he makes this decision to get political, when he makes this decision to talk about the wall, and talk about other issues of politics, you know, look, I served 21 years in the Marine Corps, and if I was standing there in front of the President, I think that that message for me would have been the wrong message to send. I would have wanted the President to come and to assure me that he had my best interests in heart, and that what I was doing really mattered, and I just don't think that that's the right -- the message that he said yesterday.

ACOSTA: And instead, the President, as we heard yesterday, was also making some false claims, saying that he gave the troops their first pay raise in more than 10 years and so, and that was just blatantly false. And why you would mislead members of the Armed Services as they're serving in a combat zone in a -- in a warzone, it just strikes me as just being a way off base. All right. Well, much more to talk about on the other side of the break. Stick with us. We'll have more on all of this when we come right back.


[17:40:35] ACOSTA: And we're back with our political, legal, and national security experts. And April Ryan, just when you thought things were a little quiet in the Russia investigation, Rudy Giuliani starts talking. He said earlier that he would allow the President to answer more of Mueller's questions over his dead body. But now, he told The Daily Beast earlier today that those talks might still be open. What do you think is going on here?

RYAN: Well, number one, just this back and forth vacillating or saying one thing and then another, it shows that they should stay and remain quiet and not continue to talk, but now that they're saying is they're leaving all options open just in case, there's so much that they don't know that the Mueller group has, you know, there are tapes, there are tapes, audio tapes with the President. And they know that people are talking, and they have to leave it open in case they want to clear themselves of what they may be hearing could be going on. This is not good but they're trying to leave an avenue open for themselves, but once again, they need to stop talking.

ACOSTA: And Jeffrey Toobin, I mean, one thing we also heard from Rudy Giuliani is he's also expanding on this argument that it wouldn't be a crime to get a heads up about the hacked e-mails from WikiLeaks. I don't know if you saw that, but let's listen to what he told The Hill and talk about it on the other side.


RUDY GIULIANI, ATTORNEY TO DONALD TRUMP: Hacking is stolen property. When it gets to the hands of the press or people who disseminate to the press, it's covered by the First Amendment, and then if a campaign gets that material from them, either indirectly, which they did, through the media or directly even, as long as they're not involved in the hacking, I don't see -- I don't see where those people would be liable.


ACOSTA: Jeffrey, that came out of left field. Is he setting the stage or something or telegraphing something there?

TOOBIN: Well, he's certainly -- you know, that's a protective legal position. Remember how much the position of the Trump forces has changed? First it was, we had nothing to do with any of these people. We don't -- there was no contact with Russia, there was no contact with WikiLeaks. Now, well, maybe there was contact, but it wasn't legal. Mayor Giuliani is certainly correct that as a legal matter, if the Trump campaign read in the newspaper the leaks of the WikiLeaks tapes, then that's certainly not a crime.

The question becomes what was the connection between the Trump campaign and WikiLeaks? Was there encouragement? Was there coordination? Was there collusion, to use the famous word, in connection with this campaign? That's the -- that's what we don't know. It is not a crime simply to receive information through the news media, but the true nature of the relationship between WikiLeaks and Roger Stone and people affiliated with Roger Stone, that's a question that is densely factual, and it may or may not be a crime depending on what the facts actually show.

ACOSTA: And Sam Vinograd, I mean, don't -- doesn't that strike you as a little curious that he would be sort of engaging in, as Jeffrey calls it "legal protection" over this hacking issue?

VINOGRAD: Jim, there are so many things about Rudy Giuliani that strike me as curious, and this is just the latest one. But to Jeffrey's point, one of the key factors here, of course, is whether any member of the campaign or Roger Stone knew where this material came from before they read it in the press. If this information was hacked by Russia --

ACOSTA: That would have shown the coordination. That would have shown --

VINOGRAD: That would have shown the coordination, but it also would have shown that this material was laundered through WikiLeaks and then was exposed. This material was laundered by the Russian government through a third party, WikiLeaks, and then exposed to the public. So, I can't really tell you what Rudy Giuliani is doing. His narrative changes every day, this may just be the latest thing that popped into his head, but one thing I imagine that investigators are looking at is, again, whether there was any advanced knowledge that this material was stolen by Russia.

ACOSTA: And getting -- putting it to the side, Shawn, whether or not this is a crime, as Rudy Giuliani points it -- or puts it out there today, there is -- there are national security implications to all of this.

[17:44:53] TURNER: Yes, there, absolutely are. And, you know, the problem that Rudy Giuliani has with this is that every time Rudy Giuliani says that there's no collusion and that there's nothing to see here, what happens is there's another detail that comes to light, and so that puts him in this conundrum where he finds himself trying to develop a narrative as we've kind of seen today, where -- and this is where I think we're going (INAUDIBLE) a narrative in which as more details come to light, you have a situation in which there are continual efforts to suggest that the President had nothing to do with what was happening, but there -- the body of people around the President who may have been involved in something continues to grow, and it continues to get closer and closer and closer.

So, when I see what Rudy Giuliani is saying these things, what he's doing is he's trying to put a shield around the President as he realizes they're from multiple angles, all of the details of the Mueller investigation continue to point in the direction of the President and his inner circle.

ACOSTA: Jeffrey, is that going to work?

TOOBIN: Well, you know, I don't know. It depends on how the facts develop, but this goes back to April's point in the very beginning -- why is he raising these issues at all? You know, I also -- I sometimes feel it's -- there's something unfair about those of us in journalism to criticize people for talking to the media. I mean, I've spoken to Rudy Giuliani, I wrote a big piece about him in The New Yorker. So, I -- it seems odd for me to say he shouldn't talk to the press, but what he's accomplishing with an interview like this is kind of a mystery, and that goes back to the point April was making at the beginning, what point -- why raise these issues?

RYAN: Be quiet.

ACOSTA: All right. It is a mystery. And hopefully, we'll get some answers to this mystery in the New Year. All right, guys, thank you very much, we appreciate it. It's been awfully quiet in this investigation. Time for some answers.

Coming up, a new arms race challenge from Vladimir Putin. He says Russia is ready to deploy a new kind of nuclear missile that they say is invulnerable.


[17:51:17] ACOSTA: And we're following a new challenge from Russian leader Vladimir Putin, he's bragging the Russian military is about to deploy a new superfast nuclear-capable missile that supposedly is invulnerable to U.S. defenses. CNN's Senior International Correspondent Fred Pleitgen is in Moscow for us. Tell us more about this claim from Vladimir Putin?

FRED PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, Jim. Well, the system is called the Avant-garde. The Russians are saying it can fly up to 20 times the speed of sound and evade missile defense systems. The interesting thing is the Russians really only announced this program in March and are now saying it's essentially ready to be deployed, and overseeing at least parts of this program is Vladimir Putin, himself. Here's what we learned.


PLEITGEN: Vladimir Putin in command, observing his armed forces' test, what they claim is a hypersonic missile, capable of defeating America's missile defense systems, called Avant-garde.

VLADIMIR PUTIN, PRESIDENT OF RUSSIA (through translator): The New Avant-garde system is invincible when faced with current and future air defense and missile defense technology of a potential enemy. This is a great success and a great victory.

PLEITGEN: While some experts doubt whether the Avant-garde missile is really combat-ready and as capable as Moscow says, Russia claims it flies up to 20 times the speed of sound and is capable of evasive maneuvers if confronted by missile defense systems.

PUTIN (through translator): Next year, the Avant-garde system will be put into service. A regiment will be formed which will start combat duty. This is a wonderful tremendous gift to the country for the new year.

PLEITGEN: The missile test came at the same time President Trump was in Iraq, standing by his decision to pull U.S. troops out of Syria, giving a massive boost to Russia's influence in the region and amid growing tensions between Moscow and Washington over Trump's decision to pull out of the decades old Intermediate Range Nuclear Forces Treaty. Vladimir Putin unveiled plans for a variety of nuclear weapons in March, including the Avant-garde and an unmanned, underwater drone, which the Russians also claim will be invincible.

PUTIN (through translator): We've achieved major breakthrough in developing new weapons this year. There is nothing in the world like these weapons. And I hope that our new systems will make those used to militaristic and aggressive rhetoric think twice.

PLEITGEN: While Moscow says its new generation of nukes are not aimed at threatening anyone, experts fear Russia, China, and the U.S. could be on the brink of a new nuclear arms race, as tensions between them rise and arms control treaties are scrapped.


PLEITGEN: And, Jim, tonight, the Pentagon also saying it's increasing its research into hypersonic. It's saying this is not the U.S.'s decision to weaponize this technology. But those who have weaponized it have created an asymmetry that now needs to be addressed, Jim.

ACOSTA: All right, Fred Pleitgen, thank you very much for that. Coming up, what will it take to break the stalemate between the President and Congress and end the government shutdown? Standby for an update from the White House and Capitol Hill.


ACOSTA: Happening now, breaking news, no action. Congress reconvenes and then abruptly ajourns as we're told. The government shutdown is likely to last into the New Year. Tonight, the President isn't blinking but he is misleading, as he tries to lay the blame on the Democrats.

Wall Street whiplash, the day after a historic surge, stock prices swing wildly with the dow losing more than 600 points and then ending the day in positive territory.