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Times Square Party; Stalemate over Shutdown; Mattis and Kelly Leaving Administration; Graham on Syria Troop Withdrawal. Aired 1- 1:30p ET

Aired December 31, 2018 - 13:00   ET

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

[13:00:00] MARGARET TALEV, SENIOR WHITE HOUSE CORRESPONDENT, "BLOOMBERG": Khashoggi's death. And, to me, those represent both the perils of what we do and why what we do is important.

PHIL MATTINGLY, CNN ANCHOR: No question about it.

All right, thanks for joining us on INSIDE POLITICS. Brianna Keilar starts right now.

BRIANNA KEILAR, CNN ANCHOR: I'm Brianna Keilar, live from CNN's Washington headquarters.

Underway right now, cities around the world already ringing in 2019, from Hong Kong to Sydney to Auckland, New Zealand. Fireworks, toasts and well wishes as people gather with loved ones to celebrate the start of a new year.

(BEGIN VIDEO CLIP)

CROWD: Five, four, three, two, one, happy new year!

Two, one, happy new year!

(END VIDEO CLIP)

KEILAR: And now to the U.S. where it's actually looking like a drenched start to the new year on the East Coast and blizzard-like conditions for other parts of the country as 2019 nears. In New York City, the host of America's biggest bash, wet and miserable weather is forecast for partygoers as they watch the ball drop in Times Square. And security, as always, will be extra tight.

CNN's Miguel Marquez is in Times Square ahead of the big party. And joining me as well is Jennifer Gray in the CNN Weather Center.

Miguel, I want to start with you here. How many people can pack into Times Square and how do police keep it secure?

MIGUEL MARQUEZ, CNN CORRESPONDENT: Well, how many people can pack into Times Square? I have the perfect thing for you, Brianna. So they've already started to move people in to some of the areas here. Look at that. That's about a 10-foot area across. And they have been jammed in there for hours at this point. Now, they're in a good position because just above them, that is the

pole where the famous ball will come down at midnight. But they have a lot of hours to go. And it's a little like hotel California here because you can check in any time you like, but if you check out, you can't get back to where you were before because you have to start at the back of the line again. You'll never get back here.

This pen right here has been filling in for the last hour or so. Here's the Japanese contingent.

Hello.

Absolutely insane.

Newlyweds from Kansas City.

UNIDENTIFIED MALE: I'm Shawn. Christine.

UNIDENTIFIED FEMALE: Hi.

MARQUEZ: And these three nutters from Wisconsin have been sitting here since 7:00 a.m. on the other side waiting to get this very spot.

UNIDENTIFIED FEMALE: Yes.

MARQUEZ: You're psyched?

UNIDENTIFIED FEMALE: So excited. It's been our dream since we were like in middle school. So --

MARQUEZ: Let's hope you're still saying that at midnight tonight.

UNIDENTIFIED FEMALE: I know. And I can't feel my toes.

MARQUEZ: They can't feel their toes. I don't even want to ask about how they're going to take care of other personal issues.

Police taking it very seriously. There's a massive police presence here. Hundreds of police officers and agents from 54 different agencies, federal, state, and local. They have 1,200 cameras throughout the area. They even have drones this year. The drones will be attached to the building, so if they have a technical fault, they won't actually hit anybody. And if you bring your drone down here, they have anti-done technology as well to mitigate those.

The biggest issue is going to be the rain.

Back to you.

KEILAR: Oh, Miguel, thank you. That is a fabulous preview there.

I want to get Jennifer Gray into this conversation with us. There's a lot of revelers, Jennifer, who are going to be dealing with that wet weather that Miguel -- I mean it's amazing because people are already there at 1:00 Eastern, but this is what they're going to deal with tonight. JENNIFER GRAY, AMS METEOROLOGIST: Yes, I can't believe -- they're going to be standing out in the rain. I mean the rain's coming in the next few hours and it's going to be there well past midnight. So they could be standing out in the rain for a solid nine, ten hours. So hopefully they'll have some ponchos or something with them while they're standing out there.

But you can see the rain is pushing in. And we -- it's not only New York City. We have a huge swath of rain that stretches all the way back to St. Louis and then all the way down to the deep south. So even places like New Orleans could pick up some rain.

We also have a severe weather threat across Nashville, places like Jackson, Mississippi, included, damaging winds, even isolated tornados possible across the south and the Mississippi River Valley. And absolutely some hail could be expected as well.

So here's the forecast radar as we go forward in time. By 4:00 Eastern, New York City will be in the rain for sure. Will most likely starting before that. And then it will continue as we go through the late evening hours. Here's midnight. And you can see, even some heavy rain for Mew York. Even Boston, Philadelphia, D.C., all in the rain. And so the forecast, it will feel like 45. The temperature will be 49. So it's not going to be as cold as last year, Brianna, but it is going to be pretty wet and miserable for the start of the new year.

KEILAR: Oh. All right, well, it will get better from here.

GRAY: Yes.

KEILAR: Jennifer Gray, Miguel Marquez, thank you.

And you can watch CNN's New Year's Eve coverage if you're like me, if you're not going to go outside and you want to stay home and be comfy, check it out. Anderson Cooper and Andy Cohen tonight starting at 8:00 Eastern. You know that's going to be one very fun show.

[13:05:11] And now to politics and the government shutdown. This marks day 10 of this standoff. And at the center of the stalemate is President Trump's demand for money to build his border wall. The president initially called for $5 billion, a proposal that Democrats rejected. Well, now, House Democrats plan to vote Thursday on a package of spending bills, as well as a stop gap measure to reopen the government.

I want to bring in CNN congressional correspondent Phil Mattingly. He's going to walk us through some of the options for both sides.

What are they?

PHIL MATTINGLY, CNN CONGRESSIONAL CORRESPONDENT: Yes, Brianna. Look, as a former Capitol Hill correspondent, you recognize that it's been kind of boring over the last couple days. No real legislative action. And that's about to change. And the reason it's going to change is because Nancy Pelosi and House Democrats are going to take the majority in the House on Thursday and they are going to move quickly.

Over the course of the last couple of days, they've been mulling three different options, maybe some short term, maybe do the bill that they did in the Senate that the president ended up saying he wouldn't support. What they've settled on, as you noted, is passing six full appropriations bills. They're bipartisan. They were agreed on in the Senate.

There are seven total that still need to be passed. The seventh is the Department of Homeland Security bill. That's the one that the wall money would be included on. That will not be passed in full. What they are going to do is move a short term stop gap bill for that one appropriations package and move the rest in full. They're going to then kick that over to the Senate.

So then you move over to the Senate, which, as you know, Brianna, is still controlled by Senate Republicans. What are Republicans going to do when the House kicks over their package of appropriations bills? They have a couple of options. They could accept the House offer. They could amend that offer and perhaps add border security to it and then try and pass it and send it back. Or they could wait for the president.

Here's what they're going to do, at least at this moment according to sources that I'm talking to, the third option. They're going to wait for the president. The Senate majority leader has made clear, he's not going to move forward on anything until he know President Trump is behind it.

So that leads you to, what are the president's options? Well, he could accept what House Democrats are going to do. I'm going to play spoiler here, that's not going to happen. He could propose some other compromise. Mike Pence, the vice president, had proposed one earlier that had been rejected. They could come back to the table on that.

Or the third option, continue to hold out and continue to leave the government shutdown. Right now people I'm talking to still think number three is the most likely option, at least at this point. We will see legislative action this week. But, Brianna, the bottom line here is, so long as Democrats maintain their position, and they have shown no sign of moving, and the president maintains his, I'll direct you to his Twitter feed if you want to know where he stands on that, the shutdown is likely to continue. The question remains, how long? The other question is, what's the path out of it? People have ideas, but nobody at this point has an answer to either of those questions, Brianna.

KEILAR: A sad state of affairs here in Washington as we get into this new year, Phil Mattingly.

I want to go to the White House now and bring in our White House reporter Sarah Westwood.

Sarah, you heard Phil. He just laid out the options there. It doesn't seem like either side is budging. Where is President Trump on all of this? SARAH WESTWOOD, CNN WHITE HOUSE REPORTER: Well, Brianna, that's really

unclear. It's not really clear what options the president is considering at this point. But here at the White House, things look a lot like they did 10 days ago with the president dug in behind his demand for some amount of funding for a border wall and Democrats dug in behind their refusal to fund it.

And all of this as the president's aides and allies are trying to create confusion about what exactly qualifies as a wall. Whether that's fencing, whether that's steel slats or a concrete wall as the president has suggested since his presidential campaign.

Mick Mulvaney, the acting chief of staff/budget director has hinted that the president might be willing to come down off that $5 billion demand that he initially had. As Phil mentioned, there was an offer for about half of that on the table that Democrats didn't seem interested in. But there's not been a lot of specificity about what kind of deal the president would accept.

You know, yesterday, after a two-hour meeting with the president, Senator Lindsey Graham, who's a top ally of the president's on Capitol Hill, said that the president was open-minded and interested in a deal that would trade temporary DACA renewal, protections for those young, undocumented immigrants known as the dreamers, in exchange for that $5 billion number. But we should note that proposals like that have been float and failed on Capitol Hill before. So there's still not a lot of clarity about what kind of deal the president might accept to reopen the government.

Brianna.

KEILAR: Very unclear.

Sarah Westwood, at the White House, thank you for that.

Now, the president and Democrats are, no surprise, pointing fingers at one another over this while there are 380,000 federal employees on furlough and another 420,000 who are working without pay.

I want to get some perspective on the shutdown blame game from a retiring lawmaker, Republican Congressman Ryan Costello.

Congressman, you are leaving. You are unencumbered by reelection when it comes to speaking about what you're seeing here. Who do you think is to blame for this government shutdown? Whose ask is unreasonable?

REP. RYAN COSTELLO (R), PENNSYLVANIA: Well, the Trump -- the president's position has been unreasonable to the extent that somebody can understand what his specific position is. He's not going to get $5 billion for a wall. And the most mysterious, unexplainable part in all of this is why the president decided that he'd rather deal with House Democrats than House Republicans in order to avert or get his way out of a government shutdown. And he's now going to -- Phil's reporting indicates that the president's going to have a choice. Does he want to just isolate the Department of Homeland Security funding and the immigration issue and open up the other six appropriations bill funding, or does he just want to keep everything still shut down?

[13:10:36] And I understand why the Senate majority leader isn't going do anything unless and until he understands what the president is going to sign because the Senate already, to use the phrase, got caught with their pants down by passing something and only after the fact did the president then say that he wouldn't sign it.

KEILAR: I wonder, when you heard Sarah's reporting there that he may be open to a short-term measure that includes DACA, I mean I wonder what you think because I would suspect that Democrats and Republicans, knowing how this issue has been introduced before, while certainly some are in favor of this, it seems like when it comes to the president and DACA, that gets him going back and forth on the issue and increases the lack of clarity about where he is on a potential breakthrough.

COSTELLO: It -- well, so it does, I agree with that. But even more to the point, we had a bill this past summer that would have provided more -- a more permanent solution for DACA than what is being reported as the more temporary solution. And Democrats wouldn't agree to that over the summer. So it's very difficult for me to think that Democrats would agree to something less than what they didn't agree to over the summer for DACA and swallow anything in the way of border security.

We're starting to hear the Democrats view this as a moral issue and I just don't see how House Democrats are going to vote for any more border funding for a wall. There might be a way to slice and dice this and have some border security measures in there, but I -- I get back to the point, Brianna, that I think the president has backed himself into a corner. He own this shutdown. He said it was going to be his shutdown. And he has not provided clarity on what he would agree to. And, as a consequence, everything is ambiguous at this point. No one knows how to move forward. And now the Democratic House is going to be in control of putting forward clearly what it is they're willing to do in terms of funding the government. I think it's a lost opportunity for the president to have led on the issue.

KEILAR: I want to expand this discussion with the congressman here. Joining us, CNN political director David Chalian and Molly Ball, national political correspondent for "Time" and a CNN political analyst.

So we're in the middle of this shutdown because of funding for the wall that the president promised to build. According to the outgoing White House chief of staff, John Kelly, who gave a very interesting interview to "The L.A. Times," he said this. The president still says wall, oftentimes frankly he'll say barrier or fencing, now that he's tended toward steel slats. But we left a solid concrete wall early on in the administration.

Do you think, David, that the president is asking for something that he actually has abandoned?

DAVID CHALIAN, CNN POLITICAL DIRECTOR: No. You'll also just -- we should remind people, again, as you said about the president's promise, he also promised that Mexico would be paying for this wall. KEILAR: That's right.

CHALIAN: And this entire conversation is about the U.S. taxpayers funding this wall.

So he clearly has backed away from some of the promise. But, no --

KEILAR: He'll say that -- in a roundabout way Mexico will pay for this, right, though --

CHALIAN: Right, but that's clearly not the case.

KEILAR: That's right.

CHALIAN: His own acting chief of staff made that quite case.

KEILAR: That's right.

CHALIAN: So what the debate is here is about how much the American taxpayers are on the hook for this wall. I totally agree with the congressman, obviously, that the president is going to own the blame of this shutdown. But to your point, the president was out tweeting to respond to that John Kelly interview saying he has not at all abandoned the notion of a wall because he hates to think for one second that his hard core supporters will see him in any form of retreat on this key promise.

KEILAR: But will they, do you think, Molly?

MOLLY BALL, CNN POLITICAL ANALYST: You know, I don't know, frankly, because we have seen with the Trump base a very large willingness to go along with Trump wherever he may lead. And I think, you know, when you talk to Trump supporters during the campaign, a lot of them didn't support a literal wall or didn't think there would be a literal wall over the entire border, but they saw it as a metaphor. They saw his willingness to say it as refreshing and they saw his willingness to take -- to stake out that sort of maximalist position in a negotiation. They liked that.

So if you were to find some kind of compromise to make some kind of deal, but the real problem here is that he's not able to make a deal. And I think that's what his supporters really want from the Donald Trump they voted for is that famous deal making ability. Where is it? We haven't really seen it over the course of his presidency and we're not seeing it now. There's no negotiation going on. There's just a president tweeting contradictory things all the time. One day tweeting a picture of -- of these sort of Venetian blind looking things, and the next day saying no, no, it's still a wall. So it's hard to deal with and this is why you have the Senate majority leader also saying we're not going to do anything until we know where he stands because they know that they can't necessarily trust that he'll keep a position he takes from one day to the next.

[13:15:24] KEILAR: Venetian blinds that are very pointy on the top, we should point out, right? The -- when he talks about the slats. Congressman, today is the last day on the job for the Defense secretary, James Mattis, is leaving. John Kelly is heading for the exit this week. They've really been seen as kind of steady hands in this. I wonder if you think this is going to mark a major change in how the administration carries out policy moving forward.

COSTELLO: Good question. I don't know. I think if you look at the John Kelly interview, some of what he found his success to be was stopping the president from doing things. I served with Mick Mulvaney. I know Mick Mulvaney. He's smart. He has good judgment. At times I don't always agree with his policy decision, but I do tend to think that when folks get in these sort of administrative positions, they're trying to make sure that they're serving the president as best as possible and protect any president from their worst instincts.

I do want to go back real quickly to what Molly said. I totally agree with what she said. And I want to take you into the mind of the Republican voter who did think that Trump was going to have Mexico pay for the wall. I think a lot of Republican voters are going to stick by the president because they see him fighting for something that he truly believes in, whether or not the wall is needed vis-a-vis more interior enforcement or other border security-type measures. And that's why I think a lot of Republican voters, and even many members of Congress, who in the past have voted for a wall or other border security measures, are willing to overlook the fact that Mexico is no longer paying for the wall.

We have clearly deviated from that campaign promise. But I think that that's why most Republican voters are standing by the president during this shutdown, in part because they don't know what he ultimately is going to advocate for or accept, but also because they view him as still fighting for what it is that he truly believes in, right, wrong, or indifferently on the actual policy of a wall.

KEILAR: Do you think, as he continues to do that without General Mattis, not on necessarily the wall, but he's made a lot of foreign policy decisions here recently as it pertains to Syria and Afghanistan. With Mattis and with Kelly gone, do you think that the tone is going to change?

BALL: No. I think that Donald Trump's tone has been consistent probably his entire life, but certainly since he became a candidate, much less president. The president that you saw is the campaign is the president that we still see on Twitter today. That's different than what the administration is going to do because for a long time, especially early in John Kelly's tenure, you did have a president who, whatever he might say on Twitter, was a little bit arguably restrained in the actual policy decisions that he would take, the moves he would make, the, you know, the allies and friends of Mattis and Kelly viewed them as sort of little angels on his shoulder who could talk into one ear even as there might be others talking in the other ear.

And with that voice gone, the fear of particularly the allies of General Mattis in the national security community, the fear is that once Trump's erraticness does not have any reign on it, particularly when it comes to foreign policy and he can just take these actions, you know, on a dime, that that could actually be quite dangerous.

KEILAR: Molly and --

CHALIAN: I would also just add that the voices on the other side, they're not even as many external voices now as there are his own feeling of confidence in dong the job. So at the time that he's losing those voices, is precisely the time that he's feeling more and more robustly confident about his chosen path.

KEILAR: It's a really good point.

David and Molly, you guys will be back with me to talk 2020.

And, Congressman Costello, thank you so much for joining us.

COSTELLO: Thank you.

KEILAR: Still to come, it appears that President Trump may be backing off his pledge for a rapid pullout of U.S. troops in Syria. So what or who changed his mind?

And Elizabeth Warren makes it official. The Democrat from Massachusetts launching an exploratory committee to run for president.

And then later, shocking new video of workers at a migrant facility seemingly mistreating vulnerable children.

Stay with us.

(COMMERCIAL BREAK)

[13:24:17] KEILAR: President Trump signaling a change in the speed of troop withdrawals in Syria. In a tweet today he wrote this, we're slowly sending our troops back home to be with their families, while at the same time fighting ISIS remnants.

His initial announcement stated withdrawals of U.S. military from Syria would be, quote, full and rapid. The president's tweet comes after he had a two-hour lunch with Senator Lindsey Graham on Sunday and Graham told reporters afterwards that President Trump has agreed to reevaluate.

(BEGIN VIDEO CLIP)

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: I think we're slowing things down in a smart way, but the goal has always been the same, to be able to leave Syria, make sure ISIS never comes back. I think we're in a pause situation where we're reevaluating what's the best way to achieve the president's objective.

(END VIDEO CLIP)

[13:25:03] KEILAR: Let's talk about this with CNN military and diplomatic analyst, retired Rear Admiral John Kirby. He was the Pentagon press secretary and State Department spokesman under President Obama. OK, this is interesting because you have Lindsey Graham who -- I mean

he doesn't want the troops coming home from Syria at all, let alone the speed with which the president has advocated for. So you're hearing him say this. But he also has an interest in the president slowing things down. What's your view on whether this has really shifted or not?

REAR ADMIRAL JOHN KIRBY (RET.), CNN MILITARY AND DIPLOMATIC ANALYST: Something has shifted, clearly. Certainly at the very least the pace of the withdrawal. But what's not clear is what happened in this discussion is, what does it mean after that withdrawal is over? And what does it mean when Senator Graham says to ensure ISIS never comes back and that we're reevaluating this. So clearly there is a shift here in the strategy. It's just not -- we don't have the details now and we have to wait to kind of see how that rings out.

KEILAR: To insure ISIS never comes back. I mean a lot of experts believe that in order to make sure that they don't at least reemerge, there needs to be a presence over there keeping them at bay.

KIRBY: Right. And, remember, in 2014 and 2015, it was from Syria, in fact Mambij (ph), that they were resourcing themselves, training themselves, funding themselves. So they clearly have an intention to restore their presence in Syria should any of the pressure from the international community come off. So it's very -- I'm concerned that we're not -- I don't want us to get wrapped around the axel on just the speed of the withdrawal. The withdrawal itself will reduce our influence and our footprint in Syria and it's very difficult for me right now, until we see the details, to see how this administration intends to keep that reemergence from happening.

KEILAR: Let's listen to what retired General Stanley McChrystal said. He's the former commander of coalition troops in Afghanistan. And he was talking about this Syria withdrawal on ABC.

(BEGIN VIDEO CLIP)

GEN. STANLEY MCCHRYSTAL (RET.), FORMER COMMANDER, U.S. AND ISAF FORCES IN AFGHANISTAN: Iran has increased influence across the region now. If you pull American influence out, you're likely to have greater instability. And, of course, it will be much more difficult for the United States to try to push events in any direction. There's an argument that says we just pull up our stuff, go home, let the region run itself. That has not done well for the last 50 or 60 years.

(END VIDEO CLIP)

KEILAR: McChrystal also called the president dishonest, immoral. The president fired back on Twitter this morning. He was talking about failed generals, which really seemed to be about McChrystal.

But I wonder, when there's this chorus of people, like McChrystal, who are saying what he's saying, if -- you get the sense that any of that is registering with the president?

KIRBY: No, I don't think -- I don't think comments by General McChrystal or even Secretary Mattis really made much of an impact here. I think this is about Senator Graham. And I think, frankly, what you're seeing is a proxy war for the president's ear between Graham and Senator Paul, who obviously was of the other mind, pull everything out now, now, now. So I think that's -- the battle you're seeing there is really between these two senators, I think, for the president's motivations.

KEILAR: The president announced his Syria pullout by saying, we have won against ISIS. And this was hotly debated because the U.S. has not, right?

KIRBY: Right.

KEILAR: Then he wrote in his latest tweet, quote, ISIS is mostly gone. Is that an important distinction to you?

KIRBY: It's a rhetorical shift. I don't know if I'd go so far as to say it's an important distinction. It very -- at the very least it's a recognition by the president that the war is not over, that the fight still goes on. But he needs to understand, it's not just about territory, he tends to talk about ISIS as if it's a conventional conflict. And, yes, there's a territorial aspect to it, but ISIS is also an ideology. It's a narrative. It's an idea. And it's a network that has global aspirations. ISIS is increasing its footprint and its influence in Afghanistan, for instance, and in the Sahel (ph) region, northern Africa. So he needs to take, I think, a more holistic view of it than just that they're mostly gone.

KEILAR: It's like -- it's like a cancer truly.

KIRBY: In a way. In a way it is.

KEILAR: Retired Rear Admiral John Kirby, thank you so much.

KIRBY: Thank you.

KEILAR: Happy New Year to you.

KIRBY: Happy New Year to you, too.

KEILAR: Six hundred and seventy-three days until we elect the next president, just in case you were keeping count. And this morning, Senator Elizabeth Warren of Massachusetts took one big step in a possible run for the White House. We're going tell you what that is. So far out, but it's a hot topic now.

Also ahead, an American is arrested in Russia, accused of being a spy. That and much more when we come back.

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