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Early Start with John Berman and Zoraida Sambolin

Democrats Take Control of U.S. House; Government Shutdown Talks Hit Stalemate; Troop Withdrawal in Syria Could Take Months; Apple Warns Investors to Expect Lower iPhone Sales; U.S. Ambassador Huntsman Visits American Detained in Moscow; China Lands Rover on Far Side of the Moon. Aired 5-5:30a ET

Aired January 03, 2019 - 05:00   ET

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

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[05:00:05] CHRISTINE ROMANS, CNN ANCHOR: A new era on Capitol Hill, and a new reality for President Trump. Democrats take over the House today.

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI (D-CA), INCOMING HOUSE SPEAKER: We're asking the president to open up government.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: It's too important a subject to walk away from.

(END VIDEO CLIP)

DAVE BRIGGS, CNN ANCHOR: The president and Democrats remain dug in with no deal to end the government shutdown.

ROMANS: The boss at Apple drops an iPhone bombshell. Sales are taking a big hit, thanks in part with President Trump's trade war with China.

BRIGGS: A college basketball player taking his head to a new, painful level.

Good morning, everyone. Welcome to EARLY START. I'm Dave Briggs.

ROMANS: I'm Christine Romans. It is Thursday, January 3rd. It is 5:00 a.m. in the East.

And let's begin in Washington because this morning, single party rule in D.C. comes to an historic end. Democrats take over the House of Representatives. It is expected they will choose Nancy Pelosi as their leader, making her the first woman to reclaim the speaker's gavel.

Democrats will hold a wide margin in the House, 235 seats to Republicans' 199. But their ability to actually pass legislation will be ham strung by the GOP's six-vote margin in the Senate and, of course, president's veto pen in the Oval Office. BRIGGS: Even so, the president faces a brand new reality, which

started yesterday. He sat down with Democratic leaders in the Situation Room wanting to talk about the border security. But they redirected the conversation to their plan to end the government shutdown now entering the 13th day. More on that in a moment, but for the latest on the balance of power, let's go to Phil Mattingly on Capitol Hill.

(BEGIN VIDEOTAPE)

PHIL MATTINGLY, CNN CONGRESSIONAL CORRESPONDENT: Well, Christine and Dave, Thursday marks a new era in Washington, for Congress, frankly, even for the White House as well. Democrats will take majority in the White House. Divided government, here we come.

And it's not the fact that policy-wise or even politically, we are not sure what's going to happen over the next two years, although gridlock seems likely. It's also who is actually coming to Washington. If you take a look at what occurred back into the 2018 elections, back in November, the class of freshmen, they're coming to D.C., have said they're going to change D.C. You have progressive firebrands like Alexandria Ocasio-Cortez, Ilhan Omar, and Rashida Tlaib, who made it clear they don't agree that Congress business as usual is something that they subscribe to.

In all, you have 40 women who are coming to Capitol, more certainly in Congress than ever before. On the other side of that, 20 new veterans are coming to Congress as well. You have a new group of African- Americans and new group of the first two Muslim members of Congress, female members of Congress to ever serve, Native American members to serve.

Diversity is probably one of the biggest stories of this class. Diversity is one of the biggest stories of the 116th Congress. Of course, the big questions aren't just the make of Congress, although it is important that it reflects far more of the country that they currently serve. It is what actually will happen.

And Democrats have made clear they want to do two things. They want to move policies forward and they agree with, that they subscribe to, even if the president does not. And they also made clear they want to investigate the president, they want to conduct oversight of the president. They say from leadership on down they can do both at once. It is something we have to keep a close eye on.

The White House has made clear the president calls it presidential harassment, that they're going to be keen to fight them every single step of the way. We have to just keep a close eye out -- guys.

(END VIDEOTAPE)

BRIGGS: A lot of work ahead for Phil Mattingly. As we mentioned at the top of the agenda for the Democrats' agenda, proposing a way out of this government shutdown, a proposal which would just so happen to reduce the president's leverage to demand funding for his border wall. But with both sides entrenched, their sit-down in the Sit Room led to nothing.

For more on that, here's Kaitlan Collins at the White House.

(BEGIN VIDEOTAPE)

KAITLAN COLLINS, CNN WHITE HOUSE CORRESPONDENT: Well, Dave and Christine, Washington is essentially at a stalemate today now that the meeting with the president and congressional leaders yesterday ended in a deadlock with no progress being made and the government no closer to be reopening than it was 12 days ago when it partially shutdown.

Now, in this meeting, which was held in the Situation Room because officials wanted to communicate how serious they think the crisis on the border truly is. There was also a lot of drama happening in that room.

Now, we are told by sources that as soon as the Department of Homeland Security Secretary Kirstjen Nielsen started to give her briefing to those lawmakers, that Nancy Pelosi interrupted and said the Democrats wanted to layout their plan to reopen the government. That is when Chuck Schumer proposed the House and Senate pass the bipartisan six bills to keep those government agencies funded and then negotiate over the next 30 days what they wanted to do for the DHS funding for the long haul. But that's an idea that the White House is opposed to.

The White House officials said that they asked these Democrats, if we do agree to do that and have the president sign those bills, will you come up on your requirement for funding for only $1.2 billion in border security funding. We want to make that number higher.

Democrats didn't signal that they were open to doing so, and essentially, we are back to square one here. Now, talks have been delayed until Friday when the White House says they invited those same lawmakers to come back to the White House and continue those negotiations.

[05:05:08] And in the words of one White House official, he said, prepare for this to be a long shutdown, because this could go on for a while -- Christine and Dave.

(END VIDEOTAPE)

ROMANS: All right. Kaitlan, thank you for that.

After meeting with the president, Democratic leaders told reporters they believe they gave Mr. Trump a chance to take yes for an answer. He did not do so.

(BEGIN VIDEO CLIP)

SEN. CHUCK SCHUMER (D-NY), SENATE MINORITY LEADER: I said, Mr. President, give me one reason why you should continue your shutdown of the eight cabinet departments while we are debating our differences on homeland security. He could not give a good answer.

PELOSI: We are asking the president to open up the government. We are giving him a Republican path to do that. Why would he not do it?

(END VIDEO CLIP)

ROMANS: Earlier in the day, in a cabinet meeting, the president made clear he is standing his ground on funding for the border wall. He says he will not compromise on keeping Americans safe.

(BEGIN VIDEO CLIP)

REPORTER: Would you accept anything less than $2.5 billion on border security?

TRUMP: Not 2.5. No, we are asking for 5.6. And, you know, somebody said 2.5. No, look, this is national security we're talking about.

(END VIDEO CLIP)

BRIGGS: Senator Lindsey Graham of South Carolina believes the government shutdown is a defining moment for this president and the Republican Party. He tells Fox News for Trump to fold and the border wall funding is simply not an option.

(BEGIN VIDEO CLIP)

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: If he gives in, that is the end of 2019 in terms of him being an effective president, that's probably the end of his presidency. Donald Trump has made a promise to the American people. He's going to secure our border. That's the end of us if we give in on this issue as Republicans.

(END VIDEO CLIP)

BRIGGS: Senator Graham proposing his own shutdown solution: $5 billion for border security in exchange for the passage of the Bridge Act, a bipartisan bill that would temporarily protect Dreamers from deportation for three years.

ROMANS: President Trump also taking a few parting shots at his former Defense Secretary James Mattis. The president claiming he, quote, essentially fired his former Pentagon chief. The truth is, Mattis resigned in protest. Here's the president's take on Mattis' departure.

(BEGIN VIDEO CLIP)

TRUMP: What's he done for me? How has he done in Afghanistan? Not too good. Not too good. I'm not happy with what he's done in Afghanistan. I shouldn't be happy.

But he was very happy. He was very thankful when I got him $700 billion, and then the following year, $716 billion. So, I mean, I wish him well. I hope he does well.

But as you know, President Obama fired him and essentially so did I. I want results.

(END VIDEO CLIP)

ROMANS: In fact, Mattis quit. He quit. He resigned. The president asked him to leave earlier. He moved up his departure date by two months. Aides telling CNN that the president was frustrated by the media coverage of Mattis' resignation letter.

BRIGGS: President Trump talking back plans for immediate withdrawal from Syria, while refusing to be pinned down on a new timetable. Multiple sources say his original 30-day drawdown plan is physically impossible without significant risk to U.S. forces. Pentagon officials say four months would be closer to reality.

But speaking to reporters at the cabinet meeting yesterday, the president would not commit to a longer timeline.

(BEGIN VIDEO CLIP)

REPORTER: You've used the word "slowly" when you're describing the withdrawal from Syria.

TRUMP: I never said fast or slow.

REPORTER: What's your timetable? When do you want troops to be out?

TRUMP: Somebody said four months, but I didn't say that either. I'm getting out -- we're getting out of Syria.

(END VIDEO CLIP)

BRIGGS: CNN's Barbara Starr has the latest from the Pentagon.

(BEGIN VIDEOTAPE)

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Dave and Christine, officially, the Trump administration has no specifics to make public about when and how 2,000 U.S. troops will come out of Syria. But the president is now saying he was never in a big rush. He never said they are coming out tomorrow. But in fact, last month, in a White House produced video, he said they were all coming home and they were coming home now.

But he's beginning to hear from his commanders and from some in Congress, a lot of concern about too much rush on bringing those troops home, that they have to be brought home in a safe and orderly manner. The have to be protected inside Syria while the withdrawal was happening, and that it could take potentially, but unofficially, as long as four months to bring the troops out and all the equipment and weapons that they are inside Syria with, and they have at a number of forward operating bases where they are located.

So, all of this now a lot more complicated than the president perhaps imagined when he first talked about it. And, of course, one of the enduring questions is, what about ISIS? At first, Mr. Trump saying ISIS was defeated, but hearing from his commanders, not so fast.

[05:10:05] There are still pockets of ISIS in Syria. They very much want to go after -- Dave and Christine.

(END VIDEOTAPE)

BRIGGS: Barbara Starr, thanks.

President Trump touting the progress his administration has made with North Korea, and showing reporters at the White House what he characterized as proof.

(BEGIN VIDEO CLIP)

TRUMP: I got a great letter from Kim Jong-un. Those few people that I shown this letter to, they've never written letters like that. This letter is a great letter. We made a lot of progress with North Korea and Kim Jong-un.

(END VIDEO CLIP)

BRIGGS: He expects a second meeting with the North Korean dictator will be arranged in the not too distant future. The president griping that his administration is not getting better credit for better relations with North Korea. If someone else were in the White House, the president says, you'd have a, quote, nice big fat war in Asia.

ROMANS: A rare warning from Apple. The U.S. and China trade war are is hurting iPhone sales. In a letter to shareholders, Apple CEO Tim Cook warned of lower sales from the holiday quarter. He blamed the disappointing outlook on the ongoing U.S. and China trade war, the slowing Chinese economy and a number of other factors, including Apple offering cheaper iPhone battery replacements.

Apple now expects revenue for the three months ending in December to be about $84 billion. That's a lot of money, but it is down from earlier estimated range of $89 billion to $93 billion.

Cook told CNBC tensions between U.S. and China put additional pressure on a Chinese economy.

(BEGIN VIDEO CLIP)

TIM COOK, CEO, APPLE INC.: If you look at our results, our shortfall is over 100 percent from iPhone and it's primarily in greater China. So, as we look at what is going on in China, the -- it's clear the economy begin to slow there for the second half. And what I believe to be the case is the trade tension between the United States and China put additional pressure on their economy.

(END VIDEO CLIP)

ROMANS: China makes about 15 percent of Apple's global revenue. Apple stock fell 7 percent after the news, unnerving markets around the world, and underlining really China's slowing economy. When you think about an iPhone in China is a luxury product. When you see that part of the market decline so quickly, it tells you something about what is happening in the Chinese economy.

(END VIDEO CLIP)

BRIGGS: On the flip side, is that proof the trade war is working for the president? They're slowing economy?

ROMANS: The question is who has the leverage? I mean, if you didn't have the United States stock market falter at the end of the year, you would say for sure all of the pressure on China. So, we shall see.

BRIGGS: All right. Ahead, nobody has been there before. Not even Pink Floyd, until now. Next, the winner to the race to the far side of the moon.

ROMANS: And Bernie Sanders apologizing. What he promises to do better next time.

(COMMERCIAL BREAK)

[05:16:16] BRIGGS: The State Department revealing that U.S. ambassador to Russia, Jon Huntsman, visited Paul Whelan, the American detained in Moscow on espionage charges. Huntsman subsequently spoke to Whelan's family by phone. Huntsman's visit represents a swift escalation of U.S. government effort on Whelan's behalf.

CNN's Nathan Hodge live for us in Moscow with the latest -- Nathan.

NATHAN HODGE, CNN CORRESPONDENT: Dave, that's certainly not an ordinary consular visit to have the U.S. ambassador to visit to American detained in Russia, in Moscow, prison by the federal security service, the FSB.

What we know, the FSB earlier this week said that they had detained Whelan, accusing him of being involved in espionage, giving very few other details.

Now, Whelan's family, on the other hand, said that he was here merely to attend a wedding, that this was a personal visit. He visited Russia in the past. He has friends in Russia through social media. He maintains an account on a Russian site called VKontakte, their version of Facebook. And here's an CNN was able to speak to his brother, David Whelan, yesterday and here's what he was able to say.

(BEGIN VIDEO CLIP)

DAVID WHELAN, BROTHER OF DETAINED AMERICAN PAUL WHELAN: I don't believe Paul's a spy. I don't believe there are charges to support him being a spy. Paul traveled for personal reasons and for business. Russia was one of the many locations that he went to. He has friends that he's gathered over the years on social media and some of them are Russian. And so, he's visited them while he was in Russia.

(END VIDEO CLIP)

HODGE: Whelan's arrest has sparked intense speculation in Washington about what the agenda of the Kremlin is here and if they are seeking an exchange for tit-for-tat. Just two weeks prior to the arrest of Whelan in Moscow, accused Russian spy Maria Butina pleaded guilty on federal court to infiltrating Republican political circles in the United States. And that raised new questions whether or not the Russians are seeking some sort of tit-for-tat, some sort of exchange.

But at this moment, all we have to go on is what the FSB has told us about Whelan's detention and what we have been told by the State Department and the visit by the top American diplomat -- Dave.

BRIGGS: A lot yet to learn here.

Nathan Hodge live for us in Moscow, thanks.

ROMANS: China has become the first nation on earth to land a spacecraft on the far side of the moon. State television announcing last night the lunar mission landed a rover near the moon's south pole.

For the latest, live from Beijing, let's bring in CNN's Matt Rivers -- Matt.

MATT RIVERS, CNN CORRESPONDENT: Christine, the Chang'e 4, as it's called, made its way to the far side of the moon, the first time that any country on earth has done that. It successfully landed around 9:25 p.m. Eastern Time on the U.S. East Coast there.

And it's a big deal for the Chinese space program. This is the first time you can say unequivocally that they have entered into the space history books, I guess you call it, in their own right. Not U.S., not Russia, but China.

They're going to do a number of things, experiment-wise, on the far side of the moon. They're going to see if certain plants can survive in specialized containers. They're going to explore both the north and south poles of the moon to see if there is water or are other resources there.

They're also going to be able to interestingly enough listen to deep space a little bit deeper. The moon itself blocks a number of electromagnetic signals that come from Earth. With the moon in the way, the lunar will listen to frequencies deep in space. Scientists say this will help them learn about deep space in way that they can't do from the earth's surface.

So, a number of things China can do there. What this sets up is a new space race between the United States and China. This is China is making its will known on the moon in a way that only Russia and the U.S. have done before.

[05:20:07] ROMANS: All right. Matt Rivers in Beijing, thanks, Matt.

Bernie Sanders said he was not aware of sexual harassment and pay disparity allegations during his 2016 presidential campaign. The Democratic senator from Vermont offering an apology to, quote, any woman who feels like she was not treated appropriately.

On Wednesday, "The New York Times" reported several women who worked in the Sanders campaign had come forward with allegations of sexual harassment and targeted disrespect. They said their claims were not adequately addressed. Sanders says his 2018 Senate campaign established new protocols for handling sexual harassment allegations.

BRIGGS: Ahead, a frightening scene on the hardwood as a man meets backboard. Andy Scholes has the details in the "Bleacher Report", next.

(COMMERCIAL BREAK)

BRIGGS: A college basketball player probably has one heck of a headache this morning after trying to block a shot last night. Andy Scholes has some incredible video in the "Bleacher Report."

Good morning, Andy.

ANDY SCHOLES, CNN SPORTS CORREPOSNDENT: Hi, Dave.

I have been watching basketball since I was like 6 years old. I have never seen a guy hit his head on the backboard like Blaise Meredith from North Central College last night. I want you to watch and listen to this clip.

(VIDEO CLIP PLAYS)

SCHOLES: Ouch.

Meredith, he was down for a bit, but was amazingly able to walk off the court, getting a nice ovation from the crowd. He also was OK and able to go back into the game a little bit later.

[05:25:01] Congrats to Blaise on creating a clip that's going to live on YouTube forever.

Here's another plight that's going to down as one of the best in college basketball season. Valparaiso down one o Illinois, three seconds, Markus Golder gets the rebound and let's it fly from half- court. His prayer was answered. Golder mobbed by his teammates as Valparaiso win 58 to 56.

All right. Is going to the college football national championship game on your bucket list? Well, you want a cheap ticket? This is your year. The get it price on StubHub is down to just over 150 bucks. Before the semifinals game last week, that ticket costs $700. For perspective, the get it price for last year's Alabama-Georgia game was $1,700.

Now, there are many factors into why prices have plummeted. There's certainly Alabama-Clemson fatigue. This is the fourth straight year they played each other. And the game is in Santa Clara, California. Not an ideal place for two southeastern schools.

All right. To cheer about Bulls games this year, the most entertaining part of last night's loss to the Magic, the all star kids dunk contest. Look at that. Check out this youngster. See it again. It was the cartwheel 360 split two-handed slam. Got all ten from the judges, Dave. I want to see an NBA player to do

that in the dunk contest in February, because I'm pretty that would win it.

BRIGGS: I want to see an all kids dunk contest. We haven't enjoyed one of those in years. Sign up the kids with six feet away.

SCHOLES: It is getting stale.

BRIGGS: Yes, getting a little old.

SCHOLES: If a guy did a dunk and then a splits when he landed. I mean, I'd be impressed.

BRIGGS: All right, LeBron. Let's see you do this.

Thank you, Andy Scholes.

SCHOLES: All right.

BRIGGS: Very good stuff.

Romans, over to you.

ROMANS: I always pay attention to the sports when it's kids. The kids --

BRIGGS: And food, yes.

ROMANS: Yes, actually.

Twenty-six minutes past the hour. It is day 13 of the government shutdown. But more importantly, it is day one of the new Congress on Capitol Hill. A Congress unlike any other in American history. Full coverage next.

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