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Government Shutdown Continues over Border Wall Funding; Furloughed Government Workers Experiencing Difficulty Paying Bills; President Trump Threatens to Shut Down U.S. Mexican Border Unless Congress Approves Funding for Border Wall; Undocumented Immigrant Arrested for Killing Police Officer in California; Black Man Removed from Hotel for Taking Phone Call in Lobby; Investigation Continues into Possible Voter Fraud in North Carolina Congressional Election; Russia Announces New Hypersonic Missile; Top Eight Business Stories of 2018 Reviewed. Aired 2-3p ET

Aired December 29, 2018 - 14:00   ET


[14:00:00] MARTIN SAVIDGE, CNN ANCHOR: President Trump tweeting today that he is waiting on Democrats to make a deal. As the stalemate drags on, hundreds of thousands of federal workers are either sitting at home wondering when they will be paid or are working without pay, like, say, TSA agents. And now the president is threatening a shutdown of another kind, a full one, at the southern border if he doesn't get the funding for his wall.

CNN's Sarah Westwood is at the White House. And Sarah, we understand that the president is in Washington, but all the key players are gone until next year, right?

SARAH WESTWOOD, CNN WHITE HOUSE REPORTER: That's right, Martin. President Trump is alone here at the White House and increasingly frustrated with his inability to get funding for his promised border wall, and he has been continuing to blame Democrats for the persistence of the partial government shutdown, even though just a couple of weeks ago, recall that he said he would be proud to own any shutdown if it was in pursuit of money for his border wall.

Now, despite that tweet and several others blaming Democrats for this shutdown, incoming acting chief of staff/budget director Mick Mulvaney says Congressional Democrats haven't actually been invited to the White House for further talks. Mulvaney said the White House is now just waiting on a counteroffer from Democrats, because recall that last week Vice President Mike Pence went to Capitol Hill and offered support for a border security package plus wall funding worth about $2.5 billion. That's an offer that Democrats rejected, so talks remain at a standstill.

The president taking to Twitter this morning, wrote, "I am in the White House, waiting for the Democrats to come on over and make a deal on border security. From what I hear, they are spending too much time on presidential harassment that they have little time left for things like stopping crime and our military." Now, "presidential harassment" is the term the president has used for the investigations and oversight Democrats have promised when they come into the House majority in just five days, and that's key because the president and other White House officials have continuously blamed Nancy Pelosi, the likely next House speaker, for holding up talks. They claim that she can't accept any kind of compromise before her speakership race on January 3rd or she will put that speaker's gavel at risk.

The president hasn't only been focused on the shutdown. He also had a call earlier today with the Chinese president Xi Jinping about trade as a possible trade deal with China also hangs in the balance, Martin. So a lot on his plate on this Saturday afternoon.

SAVIDGE: A lot going on at the White House for a Saturday, just as you put it. Sarah Westwood, thanks very much.

With Congressional leadership gone until the new year, both Democrats and Republicans have basically decided that figuring out how to fund the government is a 2019 problem. CNN's Phil Mattingly has more on where those negotiations are.


PHIL MATTINGLY, CNN CORRESPONDENT: As the partial government shutdown rolls into its first week of completion, the reality is this -- here on Capitol Hill, down at the White House, there is no solution in sight. Democrats, they firmly stand behind their position. They are not willing to give a dollar for the president's border wall. The president has made clear, a border wall, border fence, border structure of some kind, is basically mandatory for him to sign off on any deal to reopen the government.

So where does that leave things? Well, at this point, lawmakers and aides here on Capitol Hill say they're looking into next week. They're looking into 2019, they're looking into the moment on January 3rd where Democrats retake control of the House for the first action of any kind legislatively to try and reopen the government.

Here's the catch. That action doesn't necessarily portend a reopening of the government. Nancy Pelosi, the incoming speaker, has made clear she is going to move several funding proposals to reopen the government, basically kick them over to the Senate. But in the Senate where Senate Republicans still control things, Senate Majority Leader Mitch McConnell has made clear he is not willing to move forward on anything regardless of what House Democrats send over until he knows the president will sign it. And the president has made clear, what the Democrats are going to send from the House, $1.3 billion in border security money, no money for a border wall, is not acceptable to him.

So where does that leave things? It really is an open question, and nobody has a great answer right now. On the rank and file level, there are people talking about various proposals that might be able to get lawmakers and the president out of this, but until one or both sides moves off their currently entrenched position, there is no end in sight. And that matters because this isn't just lawmakers. It isn't just the president. It is also federal workers -- 800,000 workers will be working without pay or they will be furloughed. They will start missing their first paychecks on January 11th. That is real pain. That is a real bite to people. And that is often what triggers lawmakers to come to the table and make a deal. That said, everybody that I'm talking to on Capitol Hill says pretty

plainly, don't look at this as a days-long shutdown at this point. You might need to consider it a weeks-long shutdown.

Phil Mattingly, CNN, Capitol Hill.


SAVIDGE: Thank you, Phil.

That is the real problem here. Let's bring in Democratic strategist Keith Boykin who is a former Clinton White House aide, and Ben Ferguson host of "The Ben Ferguson Show." We've heard stories from federal workers who can't pay for the rent, they can't medical expenses even, one heartbreaking one about a tombstone to bury a loved one. So Ben, what is the message that the president is sending to nearly 800,000 federal workers?

[14:05:06] BEN FERGUSON, HOST, "THE BEN FERGUSON SHOW": Look, I think the message should be, not just from the president, but from Democrats, you need to get in the same room, you need to not leave Washington, and you need to get this done. And it seems pretty clear that Democrats have left town and the president is still there. They should be working on this. The Democratic leadership should not be on vacation right now while they're telling these stories that you just mentioned. They should be sitting there, they should be meeting at the White House, they should be having discussions.

The unfortunate reality is nothing is going to get done until Nancy Pelosi becomes speaker of the House on the 3rd and when they come back to their normal business hours. They're on vacation. That matters to them more than being in Washington working for the American people, and I'm glad at least the president is willing to stay in Washington and say let's talk it out, let's have these meetings. There should be no New Year's parties at any of these people, lawmakers, should be going to. Unfortunately, they all said my vacation is more important than the American people, the taxpayers, and the government workers.

SAVIDGE: Keith, what about that? Because there is something to what is being said here, that you have 800,000 people, who are facing real uncertainty and crises in their lives as a result of this political divide, and the Democrats, yes, they're not in town, they're not there, and they've gone home.

KEITH BOYKIN, DEMOCRATIC STRATEGIST: Yes, this is a tragedy, 800,000 people, federal government employees, who are without jobs or who are working without pay. This is a problem that the Republican Congress created with a Republican president. Remember, the Democrats do not control the government. They have not controlled any branch of government for the past two years. This is the entire problem of the Republican-controlled Congress, and they won't until January 3. So the idea of blaming Democrats for something that Trump couldn't do himself in two years which he had in office, is preposterous. Not to mention the fact that Jared Kushner and Ivanka Trump are down in Palm Beach at Mar-a-Lago frolicking around Florida.

FERGUSON: They're not congressman. They're not senators. They are not elected officials. That's a cheap talking point.

BOYKIN: They are White House aides. They are White House aides. And the only reason this is a crisis is because Donald Trump refused to tell the truth to the American people that Mexico was not going to pay for this wall. And he refused to get his own Republican Congress to do something for the past two years, to do this. So now here we are at the 11th hour, and Trump wants the Democrats to bail him out from the campaign lies that he told.

SAVIDGE: Let me, let me just insert here, Ben.

FERGUSON: I've got to get in here --

SAVIDGE: Hold on, Ben, hold on, Ben, hold on. The president is not wavering when it comes to funding for his wall, and I want you first to list ton what the Democratic representative from Maryland, that's Steny Hoyer, had to say about this. Take a listen.


REP. STENY HOYER, (D) MARYLAND: He made a promise that was an ill- informed, ill-advised promise, and he said to the Mexican people were going to pay for it. That was baloney. He should have known it was baloney. We don't believe the wall is a good technology. The American people don't think it's a good technology. There are other ways to keep our borders secure.


SAVIDGE: Here's my point, Ben. The president did make a promise, and Democrats have sort of made a promise that they're not going to give in to him. There is no give on either side here, and that is really worrisome, especially if you're among the 800,000 without pay.

FERGUSON: Well, again, I look at the president, and if you notice, it is only Democrats that are talking about the -- and it is a talking point, it's trying to hit the president, for him saying Mexico is going to build the wall. If you talk to Republicans, they have no problem funding it. That's why there are GoFundMe pages with tens of millions of dollars coming in days before Christmas that are very concerned.

The idea that a border wall doesn't work, there's a lot of places, El Paso is a great example where they put up barriers and it had a huge impact on reducing the number of illegal crossings. You talk to Border Patrol agents, they say it would have a massive impact if they have this wall there. And the president won on the promise of building the wall. The American people voted him in as president of the United States of America, this is his core campaign issue. He has not backed down from it, he hasn't flinched on. The American people believe that border security is important.

And I will say it again, if Democrats want to lead on this issue, and they're going to sit out there and tell people they feel sorry for these workers that aren't going to get their paychecks, then you shouldn't be on vacation. And you're about to be -- SAVIDGE: OK, we've gone over that, Ben. Keith, let me ask you this.

FERGUSON: Get your butt back to Washington.

SAVIDGE: There is a shift here that the White House is doing, and that is the president very proudly said, look, if there is going to be a government shutdown, I'll own. But there now seems to be a shift on the part of the White House in which the blame is being placed upon Representative Nancy Pelosi, who soon will be the speaker of the House. So do you think that strategy works?

BOYKIN: No, it's ridiculous. Donald Trump campaigned by saying I alone can fix it. Remember, he said this repeatedly, that he knew Washington better than anyone else. He was going to fix the problems. He was going to get everybody in a room and sit them down and negotiate.

[14:10:02] I'll remind you, he has a Republican Congress that is still in charge for the rest of this year and until January 3rd. He can't even get his Republican Congress to pass the border wall that he wants to pass. He hasn't been able to do this for two years.

FERGUSON: They already did in the House. It is a Senate issue.

BOYKIN: And now he wants the Democrats to bail him out for a campaign promise --

FERGUSON: Keith, you can't re-write history.

BOYKIN: -- that he made that was a lie from the very beginning. It was a lie from the very beginning.

FERGUSON: Keith, they already voted thon in the House.

BOYKIN: And he said, who is going to pay for it, and the crowd repeatedly Mexico. They didn't say the American taxpayers. They said Mexico. That was a lie. And he should pay for it.

SAVIDGE: Then let me ask you this. The president is threatening to shut down the southern border. He is upping the ante in what is already a very problematic battle of political wills. Is that going to work? And do you think he really means it?

FERGUSON: I think the president is dead serious about this issue, and it is a national security issue, it's an American worker and protecting American workers and jobs and wages issue. And I think the president has realized that it is his duty and obligation to go all in on this issue and to figure out and to broker the best deal possible. At the end of the day there's going to have to be --

SAVIDGE: Shut down the border, the financial impact alone, though, that would that be?

FERGUSON: Again, it is a question of, if you look at only the financial impact, any massive change in American history usually is pretty tough to do. And the president understands that. And to do anything big in Washington, unfortunately, there's always going to be, well, what about this, or what about that? You look at this police officer that was killed in California on Christmas Eve. I think the president looks at the illegal immigrant that killed him and said why is this person in this country illegally? How is he able to cross the border at will whenever he wants to? I am going to protect the American people. This is my promise, and everything is on the table, to get this done. And I support the president in doing that.

SAVIDGE: All right, Keith, what will it take to come up with a compromise, because it is going to have to be one, to get this government open again and people paid?

BOYKIN: Unfortunately, it seems the only solution is for Democrats to take control of the House on January 3rd, and then finally Trump will realize he can't get his border wall done and he will go back to a reasonable negotiating position. I don't see anything changing before that.

But the story just came out today in the "New York Daily News" that Trump's own golf course in New Jersey has been apparently handing out fraudulent green cards and Social Security numbers to people at his golf club. So he is the most hypocritical person in the country when he talks about the impact of illegal immigration on the economy in this country. Donald Trump has been inconsistent on this issue from the beginning. He lied about Mexico. He is lying about the border wall. And he is the only one that is keeping the government shutdown.

FERGUSON: How is he lying about the border wall?

BOYKIN: He is the one who is keeping the government shutdown.

FERGUSON: How is he lying about the border wall? He has been consistent about that.

SAVIDGE: Then what's the solution? What's the solution from your point of view?

BOYKIN: He lied when he said he wouldn't blame the Democrats, and now he's blaming Nancy Pelosi for what he himself has done.

FERGUSON: Nancy Pelosi is not in town. If you've got to have a deal done, you have to have a deal done with the Democrats.

BOYKIN: She is not the speaker of the House.

FERGUSON: Keith, you know that. You worked in the White House, for goodness sake.

BOYKIN: She is not the speaker of the House.

FERGUSON: She is about to be. She takes the job. You know this. This is the part that is absurd.

BOYKIN: Nancy Pelosi is not the speaker of the House.

FERGUSON: She is about to be the speaker of the House. She just started ahead of time.

SAVIDGE: Thanks very much for joining us, Ben Ferguson, thank you very much, we appreciate both of you for joining in on the conversation. And we hope that a solution is found soon. We'll have you back in the new year. Thanks.

And in the midst of this government shutdown, it is very easy to forget about the tens of thousands of families affected. It is not just politics. I spoke to one government worker earlier today about how the shutdown is impacting her. Take a listen.


SAVIDGE: If you could, you have the opportunity, right now, to speak directly to lawmakers, what would you say to them?

LILA JOHNSON, FEDERAL CONTRACT EMPLOYEE: I will say they should come to some kind of a decision, because people like me, is struggling, working, it is hard on us. And for President Trump to be throwing a temper about a wall, the American people, I didn't ask for it. That's something that he promised the people when he was elected. Why should we have to pay for it? And this should come to some kind of agreement to open the government back up so people like me, my coworkers, and everybody else can go back to work. We are working people. We don't need to be standing on the line for them up on the Hill, in the White House, wherever, fighting over when is they going to open the government back up?

SAVIDGE: Can I ask you, how much longer can you get by with this shutdown? Or is it already to the point where it's almost desperate?

JOHNSON: It is to the point now. It's not about how much longer. It's to the point now that I need to be working to pay my bills and take care of my family.


[14:15:06] SAVIDGE: Still ahead, the Trump administration still laser-focused on the border. Now, we're learning new details of DHS Secretary Kirstjen Nielsen's latest trip. We'll take you live to El Paso.

Plus, later, a hotel guest kicked out while talking on the phone in the lobby. Now the hotel is responding after a nationwide backlash. We'll tell you what their decision is after this.


SAVIDGE: We're following new developments in the California case, where more arrests have been made after a police officer Ronil Singh was gunned down the day after Christmas during a traffic stop. Authorities now have arrested the girlfriend and the brother of the suspect, that is Gustavo Perez Arriaga. Police arrested Arriaga Friday, and they say that he was in the U.S. legally and he might have been trying to escape to Mexico. CNN national correspondent Sara Sidner has more on that arrest. (BEGIN VIDEOTAPE)

SARA SIDNER, CNN CORRESPONDENT: Less than 48 hours after losing his brother, his hero, his friend, Reggie Singh stepped to the mics. He had just learned his brother's suspected killer had been caught.

REGGIE SINGH, VICTIM'S BROTHER: He is not coming back, but there's a lot of people out there that misses him, and a lot of law enforcement people that I don't know that work days and nights to make this happen.

SIDNER: Ronil Singh came to this country as an immigrant from Fiji. He was living his version of the American dream. He wanted to become a police officer, and he did just that. He dreamt of a family. Five months ago, he and his wife welcomed their son into the world. But at 1:00 in the morning, the day after Christmas, Singh's dream abruptly ended.

[14:20:00] CHIEF RANDY RICHARD, NEWMAN POLICE: I did not know Christmas morning at 4:00 in the morning when I said goodbye to him and sent him off to his family that it would be the last time that I saw him.

SIDNER: Police say Singh was killed by Gustavo Perez Arriaga, who, unlike Singh, had come into the country illegally. Deputies caught up with Arriaga at a home near Bakersfield, California, after a massive manhunt.

SHERIFF ADAM CHRISTIANSON, STANISLAUS COUNTY: This criminal, Mr. Arriaga, crossed our border illegally into Arizona some time ago. He is a criminal. He has two prior arrests for DUI.

SIDNER: Several people were arrested, including Arriaga's brother and a co-worker, who were accused of lying to authorities and impeding their ability to find him faster. While Singh's family wept around him, the Stanislaus County sheriff could not contain his outrage over California's so-called sanctuary law.

CHRISTIANSON: And under SB-54 in California, based on two arrests for DUI and some other active warrants that this criminal has out there, law enforcement would have been prevented, prohibited from sharing any information with ICE about this criminal gang member.

SIDNER: Some law enforcement officials completely disagreed, saying the law actually encourages people to come forward who would otherwise avoid helping law enforcement because of citizenship status. But the sheriff's sentiment has been embraced by others, including the man with the largest megaphone. President Trump tweeted about the case, using it in his pitched battle to build a border wall to keep illegal immigrants out.

No matter who wins the political battle, there is little that can ease the pain of the Singh family. Their one small solace, Singh's canine partner Sam will simply become the family pet. The police department is retiring the dog because, as the chief put it, the Singh family shouldn't have to lose another family member. Sara Sidner, CNN, Los Angeles.


SAVIDGE: On another story, two hotel employees in Portland, Oregon, have been fired after they were caught on video calling the police on a black guest who was talking on his phone. Jermaine Massey says that he was racially profiled while in the lobby of the Portland DoubleTree hotel. He says he was a guest at the hotel and he was approached by hotel employees who doubted his explanation that he was a guest. The security guard eventually called the police on him. Massey shot video of the incident on his cell phone, and, yes, the encounter soon went viral.

For more on, let's bring in CNN's Miguel Marquez. And Miguel, what more can you tell us about the development?

MIGUEL MARQUEZ, CNN CORRESPONDENT: This seems to be another example of a situation where you have white individuals who, for whatever reason, call the police on black individuals doing fairly minor things, if anything concerning at all, essentially breathing while black.

Mr. Massey checked in on December 22nd into that DoubleTree hotel, it's part of the Hilton chain. The two employees that you see in the video have been fired. He had come back from a concert that night, he had a text from his mother to call, he stopped in the lobby, there was a lot of people in there so he went off to a quieter part of the lobby. That's when he had the encounter with this security guard. He put it all on social media, as one does these days, and we took some of the highlights of it to show you sort of how that conversation went.


JERMAINE MASSEY, SAYS HOTEL STAFF HARASSED HIM, HAD HIM KICKED OUT: He's calling the cops on me because I'm taking a phone call at the DoubleTree Hotel. Say hi, Earl.

UNIDENTIFIED MALE: Portland police will be here in a minute.

MASSEY: Thank you. Call them. I'm waiting. They're coming why? Why are they coming?

UNIDENTIFIED MALE: To escort you off the property.

MASSEY: Because what, and I'm staying here?


MASSEY: How am I loitering in an area that's public?

UNIDENTIFIED MALE: You're sitting here.

MASSEY: So this area is off limits after a certain time?

UNIDENTIFIED MALE: Only if you're a guest.

MASSEY: I am a guest.

UNIDENTIFIED MALE: You didn't tell me that.

MASSEY: I said that I'm a guest. I told you that.


MARQUEZ: Now, the Portland mayor in a tweet referred to this as part of the systemic nature of discrimination. Portland police eventually did show up, escorted Mr. Massey to his room, and then out of the hotel. The hotel has apologized. They have investigated and now fired those two employees.

But Mr. Massy and his lawyer, they want more. They want something in writing from DoubleTree hotel, or the Hilton chain, explaining why was he approached, what are the rules in these circumstances, and let individuals know if they are going to make a private phone call in a public lobby, and they are staying there, what is it that would engender that sort of attention from a security guard, and then to have it escalate to the point where they're kicked out of their room by that time about midnight on the 23rd.

SAVIDGE: And unbelievable story. And thank goodness he rolled on all of it. Miguel Marquez, thank you very much for that.

MARQUEZ: You got it.

[14:25:00] SAVIDGE: And we'll be right back.


SAVIDGE: Major developments in North Carolina that could impact the future of a congressional seat there. The North Carolina state board of elections dissolved Friday without certifying results from the ninth congressional district, which shows Republican Mark Harris ahead by just 905 votes over Democrat Dan MccReady. The prospects for a new election are now pretty much in doubt for a race that was tainted by allegations of ballot fraud by a Republican operative.

Adding to the uncertainty, the incoming House majority leader says House Democrats will not allow the Republican candidate to be sworn in next week because of the ongoing investigation.

For more on all of this, let's bring in CNN's Kristen Holmes. And Kristen, what is going to happen next?

KRISTEN HOLMES, CNN CORRESPONDENT: Well, Martin, that is the big question. And it's just as complicated as it is messy. So the board of elections dissolved. This was at the order of a panel of state judges who deemed it unconstitutional. And this is from an ongoing legal battle from 2016. But it has huge implications for what is going on right now within the state.

Not only was the board of elections running the investigation into whether or not there was potential ballot fraud. They were also holding a hearing January 11th to go over the evidence from that investigation, and essentially decide whether or not there was going to be a new election.

Now, in addition to that, as you mentioned, they never certified a winner in this election. Harris did try to make a last-ditch effort on Friday, right before the board dissolved, trying to get certified as the winner. They rebuffed him. Now, he plans to take this to federal court to force them to certify him as the winner. So we'll have to see what happens with that.

But what this all means moving forward, well, first, take a look at Congress. We know that Congress is set to start, all of those new members are going to be sworn in on January 3rd.

[14:30:04] And Harris doesn't really have a legal leg to stand on despite the fact that he was in the lead. Without a court order, and without certification, there is no legal authority that says that he should get the seat. But in addition to that, if he were to show up, let's say, and try to claim the seat, Democrats say they are going to fight against this tooth and nail. Take a listen.


REP. STENY HOYER, (D) MARYLAND: His election has not been certified. In light of that, and in light of the fact that so many Republicans in North Carolina admit and observe that there was fraud, obviously, conducted in the general election in North Carolina, in that district, that he should not be seated unless the cloud is lifted. My own view is, we probably ought to redo the general election.


HOLMES: So how that's going to happen we just don't know, because right now there is no board of elections. But moving forward with the investigation, that is a whole other mess here. So Democratic Governor Roy Cooper under a new state law is required to appoint a new board of elections. Now, this is supposed to be done on January 31st. So he has said that he will appoint an interim board of elections to continue with this investigation. Republicans now say not so fast. They claim Cooper does not have the authority to do that. And now they're saying they will take this to court if they have to. So this could be tied up for quite some time, Martin.

SAVIDGE: As you said, Kristen, messy and complicated. Thanks for straightening it out for us.

A new threat from the Kremlin. Russia claims its new supersonic missile is in vulnerable and it's all set to go. What does this mean for our national security? We'll have more on that right after this.


SAVIDGE: Russia says that it has a new hypersonic missile system and that it will enter service next year. [14:35:01] Russian president Vladimir Putin claims it's invulnerable

to U.S. defenses after a test of the missile Wednesday. Putin says it is a wonderful gift to the country for the new year. CNN's Barbara Starr has more.


BARBARA STARR, CNN PENTAGON CORRESPONDENT: U.S. defense officials say this is the real deal. Russia test-firing its new high speed, hypersonic missile, a missile that the U.S. military currently cannot defend against. Russian President Vladimir Putin pulling no punches on his intent.

VLADIMIR PUTIN, RUSSIAN PRESIDENT, (through translator): The new avant-garde missile system is invincible against today's and future air and missile defense systems of the potential enemy. This is a big success and a great achievement.

COL. CEDRIC LEIGHTON (RET), CNN MILITARY ANALYST: If the weapons work as advertised, there is no current defense against them.

STARR: The Russian missile has captured the attention of Patrick Shanahan, the deputy defense secretary who will take over as acting Pentagon chief when Secretary James Mattis leaves next week.

UNIDENTIFIED MALE: We have a number of options going on with hypersonic missiles.

STARR: Shanahan warns the U.S. needs to be able to detect the fast- flying missile, much further away than current radar systems can handle. The U.S. has to detect it thousands, not hundreds of miles away, because of its high-speed approach. The Pentagon may spend more than $1 billion trying to develop and field its own capabilities.

The Russians are making significant, yet unproven claims, about their missiles, saying it's capable of carrying a nuclear warhead, it flies up to 20 times faster than the speed of sound, it can adjust altitude and direction to avoid detection. Putin says it's invincible.

GEN. JOHN HYTEN, COMMANDING GENERAL, U.S. STRATEGIC COMMAND: We are going to need a different set of sensors in order to see the hypersonic threats. Our adversaries know that.

STARR: The challenges are also political for President Trump whose relationship with Russian president Putin has been rocky since July's Helsinki summit.

LEIGHTON: Putin feels incredibly emboldened. Putin believes this is the time to press his advantage. He's put his forces in Ukraine, in eastern Ukraine. He's of course taking over Crimea. He's now gaining ground in Syria. This is Russia's time, in his view.

STARR: U.S. defense officials are taking no chances on whether the Russian system works, or it does not. They say they are proceeding with a U.S. program to try and match and overmatch whatever the Russians may be up to. Barbara Starr, CNN, the Pentagon.


SAVIDGE: And still ahead, Secretary of Homeland Security Kirstjen Nielsen visits the U.S. border with Mexico. Now we're learning new details about her trip. More on that, after this.


[14:41:36] SAVIDGE: 2018 was a pivotal year for business, many once dominant bricks and mortar retailers shuttered their doors while Amazon expanded and continues to command e-commerce sales, making its founder and CEO the richest man on the planet. CNN's business editor at large Richard Quest and chief business correspondent Christine Romans break down the top eight business stories of 2018.


CHRISTINE ROMANS, CHIEF BUSINESS CORRESPONDENT: Iconic American industries transformed.

RICHARD QUEST, CNN BUSINESS EDITOR AT LARGE: The stock market's wild ride.

ROMANS: The U.S. takes on the world.

QUEST: Scandals shake confidence in big tech.

ROMANS: These are the top business stories of 2018.

QUEST: Number eight, retail implodes as Amazon explodes. This year, two decades-old iconic American retailers closed up shop.

JOHN BERMAN, CNN ANCHOR: The dramatic fall for what used to be one of the United States largest retailers, Sears filing for bankruptcy.


UNIDENTIFIED FEMALE: The last generation of Toys R Us kids have spoken across the U.S., all of its stores will now close.

ROMANS: Toys R Us and Sears struggled to keep up with retail's digital transformation. Stores like Target, Macy's, and WalMart are investing millions in their websites and mobile apps. The goal -- compete with Amazon. The online behemoth dominates the industry with billion-dollar profits and $1 trillion market value, granting its CEO a coveted title.

QUEST: Jeff Bezos is now the richest person of all time.

Two new locations will feel Amazon's power, New York City and northern Virginia. They won a year-long competition for it second headquarters.

ROMANS: Number seven, auto companies reckon with the future. Americans are shunning sedans for SUVs. And that's changing the industry. Ford will drop all but two passenger cars from its lineup by the year 2020. And General Motors is restructuring its work force, an announcement that sent shockwaves through America's heartland and Washington.

UNIDENTIFIED FEMALE: General Motors, the iconic American automaker, is cutting staff, and closing plants.

ROMANS: President Trump slammed GM's decision to shutter five north American factory, costing 14,000 jobs. But U.S. automakers say it's evolve or die. They are investing in self driving and electric cars to compete with each other, and their new rivals in Silicon Valley.

QUEST: Number six, Trump versus the Federal Reserve. In 2017, President Trump praised his pick for Fed chief.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: He's strong. He's committed. He's smart.

QUEST: While that didn't last long. The president breaking precedent by repeatedly criticizing Jerome Powell for raising interest rates.

TRUMP: The Fed is out of control. I'm not happy with what he's doing.

We have much more of a fed problem than we have a problem with anyone else.

QUEST: Historically, presidents always avoid confront can the central bank. It's supposed to operate independently from political influence. So President Trump's attacks may have unintended consequences. If the Fed suddenly slows the pace of rate hikes, that could raise concern, bowing to political pressure. Or the president could do exactly the opposite of what he intended. The Fed may feel it has to raise rates to show its not surrendering.

[14:45:08] ROMANS: Number five, Elon Musk's erratic behavior cost Tesla and himself. Many credit Tesla's incredible market value to belief in Musk as an innovator, but this year his actions caused many to question his leadership, like slamming analysts on an investor call.

ELON MUSK, CEO, TESLA: Boring, bonehead questions are not cool. Next.

ROMANS: Smoking marijuana during a live broadcast.

UNIDENTIFIED MALE: It's Tobacco and marijuana there.

ROMANS: Calling a British cave diver involved in the Thai soccer team rescue a pedophile. And of course the fiasco over potentially taking Tesla private, Musk stunned investors in August when he tweeted he had secured funding to take the company private, a plan he has since abandoned. That triggered a jump in Tesla's stock price as well as scrutiny from Wall Street's top regulator. The SEC concluded Musk misled investigators, forcing him to pay a $20 million fine and step down as Tesla's chairman to settle those charges.

QUEST: It is number four, Wall Street's wild swing. Now 2018 started with a bang. And then trading turned volatile.

WOLF BLITZER, CNN ANCHOR: Happening now, breaking news, wild ride. Another dizzying day on Wall Street, with stocks nose-diving more than 1,000 points for the second time this week.

ROMANS: In February, the Dow lost 3,200 points in just two weeks when inflation fears ramped up. Stocks recovered, as corporate tax cuts juiced profits. But then came the tech stock meltdown that dragged the whole market lower.

QUEST: Very scary October in the markets.

UNIDENTIFIED MALE: Stock market just had its worst month since 2011.

UNIDENTIFIED FEMALE: Breaking news. The Dow plunging more than 500 points yet again.

QUEST: Trade fears, rising interest rates, Brexit chaos, slowing growth, recession concerns, all of them putting strain on a bull market that is already the longest in history.

ROMANS: Number three, President Trump took on the world, turning his tough trade talk into action, slapping tariffs on foreign steel and aluminum, ripping up NAFTA for the USMCA, and trashing America's neighbor in the process.

TRUMP: Canada has treated us very badly. We think their negotiators have taken advantage of our country for a long time.

ROMANS: But what really unsettled investors, a trade war between the world's two biggest economies.

UNIDENTIFIED FEMALE: The president announced new tariffs on $200 billion worth of Chinese goods. China shot right back, saying it will retaliate with countermeasures.

ROMANS: China and the U.S. hit each other with tariffs on billions of dollars of goods. President Trump and Chinese President Xi Jinping agreed to a temporary trade truce in December. Investors hope that could lead to the real deal. But that could be complicated by the recent arrest of the CFO of a Chinese tech giant in Canada.

Number two, unemployment hit historic lows.

UNIDENTIFIED MALE: It's 3.7 percent unemployment in the month of September, a 49-year low.

ROMANS: The U.S. labor market is strong, adding jobs for the past 98 months in a row. But as the U.S. nears what is known as full employment, employers will struggle to find workers. Hiring may slow. But for now, job gains are solid and wages finally started to rise, a missing piece of the recovery so far. QUEST: Number one -- Facebook scandals which sowed distrust in big

tech. In march Facebook revealed it had exposed 87 million users to a third party app that angered users, advertisers, lawmakers, and investors.

ROMANS: The data crisis was a hit to Facebook's reputation, already tarnished for its role in spreading misinformation and allowing election meddling. It led to an apology tour for CEO Mark Zuckerberg, concluding with a grilling on Capitol Hill.

MARK ZUCKERBERG, CEO, FACEBOOK: I started Facebook. I run. And at the end of the day, I am responsible for what happens here.

QUEST: Facebook promised to spend billions to put privacy first. Users liked that. Investors didn't.

UNIDENTIFIED MALE: Facebook just suffered the biggest single day loss for any public company in history.

QUEST: In one day, Facebook lost $119 billion in market value. Tackling its problems will cut into Facebook's profits for years to come. But the company says it's necessary to improve its platform and regain our trust.


SAVIDGE: And there's much more ahead in the newsroom. But first, at nine years old, she was severely burned in a kitchen accident. Now she is a popular beauty blogger inspiring others. Her story is today's Turning Point.


[14:50:00] SHALOM BLAC, BEAUTY VLOGGER: I am Shalom Blac. I am a beauty and inspirational vlogger on YouTube.

I do transformation videos. That is what people really know for me. The thing that really separate me from everyone else that does YouTube videos is my scars.

I am from Nigeria, and I got burned when I was nine-years-old at my mother's restaurant. The pan of oil just literally fell on me and my youngest sister. I'm not sure exactly how many surgeries I got. Life took a huge, huge turn for me. I didn't want to go to school, and everybody would sort of look at me and felt disgusted. I started thinking about committing suicide, because of the bullying.

When I moved here, I got introduced to proper makeup in the hospital. But then I came across YouTube videos.

I started applying that to how I wanted my makeup to look. And I started getting e-mails and DM's, just people telling me how I inspire them, how they are willing to challenge themselves and face their fears.

I don't feel any different, whether I have makeup or not. I'm very, very much in tune with my looks. I see beauty regardless.



[14:55:05] SAVIDGE: Today, Homeland Security Secretary Kirstjen Nielsen is in Yuma, Arizona, for a firsthand look at the Customs and Border Protection facilities there. This comes one day after Nielsen made pretty much the same kind of visit in El Paso yesterday. The secretary issuing this statement just minutes ago, and it reads in part, "The system is clearly overwhelmed, and we must work together to address this humanitarian crisis and protect vulnerable populations. We know that if Congress were to act, or the courts were to enforce the law as written, we could address this crisis tomorrow. Instead, we continue to do more with less. As I have said before, I asked Congress to please put politics aside and recognize this for the growing security and humanitarian crisis it is," unquote.

Earlier, I speak to the mayor of El Paso about those facilities, what a border shutdown would do to the community, and what caused the unnoticed drop-off of hundreds of migrants in El Paso.


MAYOR DEE MARGO, (R) EL PASO, TEXAS: I agree with the statement she released related to the broken immigration policy. That's the problem. El Paso is dealing with the symptoms as a result of the lack of fortitude in Washington to deal with, on both sides of the aisle, to deal with our immigration policy.

We are being inundated. We've got five times the release of migrants here since October than we had a year ago. We're averaging about 2,000 a week. And I got word yesterday that -- actually this morning, that they may have to increase the releases up to 500 a day, and I'm not sure we can handle that. And Annunciation House, our primary NGO, they are the ones that coordinate this with 20 other shelters, but I'm not sure we can handle it.

SAVIDGE: And Mayor, let me ask you this. How do your community, your city's resources, come into play, with what is a federal issue? Is it not?

MARGO: It is. And that's part of the problem. You can't apply for disaster relief when the federal government is causing the problem to begin with. We're looking at whatever we can do.

But right now, the NGO, the Annunciation House, takes in donations and handles it, and they're doing a magnificent job of doing that. The city provides security. Our bus system, our metro provides transportation for the migrants to the shelters, and we will use our -- and our office of emergency management is coordinating everything. But we will also use our ambulances, et cetera, if it's required for these medical checks that have been increased as a result of he tragic death of the two young Guatemalans.

SAVIDGE: From your vantage point -- MARGO: We've been doing whatever we've been asked to do.

SAVIDGE: From your vantage point, and as a community leader, what did you stress to the secretary that needed to be done immediately.

MARGO: We clarified the problem you announced on Christmas Day that occurred a week ago Sunday, with was the lack of analysis, the lack of information. We're told that our agreement, the Annunciation House's agreement with ICE and CBP is that they will give us at least a 24- hour notice on the releases, and how many.

SAVIDGE: Why didn't that happen? Do you know? Did she explain?

MARGO: I think it was just an unfortunate glitch. This is one time it happened. We talked about that. It didn't look willful or intentional. It was just an unfortunate glitch in communication. But I get a text message usually every day announcing the number that are going to be released. And the Annunciation House talks about where they are going to be sheltered.

But we've got this issue. It is continuing. We're the second largest port. We're receiving these, as I say, daily. As I've said on previous interviews with CNN and other networks, is you want to know about immigration, and you want to know about the border, come to El Paso.

SAVIDGE: And I agree with you. I've been down there and that that is the place that you see it firsthand.

MARGO: -- the U.S.-Mexican border.

SAVIDGE: Let me ask you before we run out of time and I'm sorry to interrupt, but the president has threatened a shutdown of the southern border. How would that impact your community?

MARGO: It would be a killer. We have, in addition to the migrant community that we're dealing with, and that issue, it's commerce. We've got 23,000 pedestrians, legal pedestrians, that cross every day north from Mexico. We have commerce trucks back and forth. We have 21 million private passenger vehicles on an annual basis that come north legally. So from a commerce stand point, we're the 10th largest port in the nation. We got $82 billion going back and forth in imports and exports. It would be a killer.


SAVIDGE: And we will see if the president makes good on that threat. Thank you for joining me. I'm Martin Savidge. The news now continues with Ryan Nobles.