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Trump to Meet Congressional Leaders in Shutdown Showdown; Cracks in GOP Support of Trump's Hardline Wall Stance; House Democrats Introduce Sweeping Legislation on Election & Ethics Reforms; Hannity, Graham, Cornyn Say Wall/DACA Deal Possible; House Democrats Bring Up Impeachment of Trump; Dow Soars after Good Jobs Reports, Fed Chair Eases Rate-Hike Fears; U.S.-China Trade Talks Schedule to Resume Next Week. Aired 11-11:30a ET

Aired January 4, 2019 - 11:00   ET


[11:00:00] POPPY HARLOW, CNN ANCHOR: One of the questions becomes, does that become a platform for a learning experience for everyone?


HARLOW: So we're out of time. We'll stay on this. Let us know what you hear. Really important reporting.

Thank you.

MELAS: Thank you.

CABRERA: Thank you all for being with me today. I'm Poppy Harlow. Jim and I will see you back here next week. Have a great weekend.

"AT THIS HOUR" starts now.

ANA CABRERA, CNN ANCHOR: Happy Friday. I'm Ana Cabrera, in for Kate Bolduan.

Another very busy day on our nation's capital with two big events happening this hour. First, at any moment, House Democrats will hold a news conference on a major piece of legislation they're now introducing after taking control of the chamber. It's a sweeping combination of election and ethics reforms, including a requirement that presidential candidates release 10 years of tax returns. Obviously, aimed at President Trump.

And moments from now, in the Situation Room, the shutdown showdown takes center stage again. President Trump holding a meeting with leaders of the new Congress, including Nancy Pelosi, now the speaker of the House. It comes on day 14 of the government shutdown. And neither side willing to budge.


MIKE PENCE, VICE PRESIDENT OF THE UNITED STATES: The president's made it clear, we're here to make a deal, but it's a deal that's going to result in achieving real gains on border security. And you have no border security without a wall. We'll have no deal without a wall. REP. NANCY PELOSI, (D-CA), SPEAKER OF THE HOUSE: We're not doing a

wall. Does anybody have any doubt that we're not doing a wall? So that's it.

UNIDENTIFIED REPORTER: Are you worried about backlash --


PELOSI: It has nothing to do with politics. It has to do with, the wall is an immorality between countries. It's an old way of thinking.


CABRERA: Meantime, some signs of cracks in the GOP's public support for President Trump's hardline stance on the wall.

We're covering all the angles. CNN's Jessica Dean is at the White House, and CNN congressional reporter, Lauren Fox, is on Capitol Hill.

First to you, Jessica.

What can we expect with round two of congressional leaders and the president at the White House today?

JESSICA DEAN, CNN CORRESPONDENT: Hi, to you, Ana. We're expecting them here at 11:30. I think what you heard just that you played a moment ago, pretty much sums it up. We're not expecting a lot of progress. At this point, nothing indicates that anyone is willing to budge. Nancy Pelosi and the Democrats saying there's no wall, it's not happening. President Trump and the White House and Republicans around him saying, without a wall, there's no deal. So you can see, they're no closer than they were several days ago.

Again, today's meeting like Wednesday's, is taking place in the Situation Room. The White House is really trying to frame this as a national border security emergency. They really want to add that gravitas. The Democrats simply not buying that. They're saying this is just about getting the $5 billion -- that this is just a show to get the $5 billion. But again, Ana, there's no hope on either side at least right now that any significant progress is going to be made.

As you mentioned, some Republicans, Gardner and Susan Collins, both will be up in 2020. They're starting to break rank. At this point, it doesn't indicate President Trump is going to do anything differently, but for Democrats, they think that means their strategy is working. So again, no indication that we're going to have any progress forward at least right now.

CABRERA: OK, Jessica, stand by.

Lauren, I want to talk more about the pair of Senate Republicans now breaking with the president on his insistence for the border wall to end the shutdown. What can you tell us?

LAUREN FOX, CNN CONGRESSIONAL REPORTER: Ana, you know, these are two Republicans who don't always go along with President Donald Trump. I want to start with Senator Cory Gardner, a Republican from Colorado, who is up for re-election in 2020.

Here's what he said to say about how he thinks the government shutdown should be resolved.


SEN. CORY GARDNER, (R), COLORADO: I don't think shutting down the government is the right way to do this. So let's fund the border, let's fund border security, but let's do so while making sure the government is operating for the people of this country.


FOX: And Senator Susan Collins, a Republican from Maine. She's a slightly different story here. She is someone who has been at the center of negotiating the ends of government shutdowns, many I have covered here on Capitol Hill. But the problem is that many of these Senators say, we can get in a room, we can get Republicans and Democrats together, we can come up with a solution, perhaps. That's what they were doing with the government funding bill that went through the beginning of February. But if the president isn't willing to sign it, it goes nowhere. Senator Susan Collins, of course, wants to pass the Senate appropriations bills that Republicans and Democrats have already negotiated on. But if the president isn't going to sign them, may not be much use in putting those on the Senate floor.

CABRERA: Mitch McConnell has indicated he will not do so. He's saying I'm going to sit back. We'll let the president and Democrats talk to each other. I'm staying out of it.

Jessica Dean and Lauren Fox, thank you both.

Joining us with their insights, Mark Preston, CNN senior political analyst, and Eliana Johnson, CNN political analyst and White House reporter at "Politico."

Mark, Republican Senators breaking with President Trump, pushing to pass this spending bill to reopen the government that the House just passed last night. You heard from Cory Gardner and Susan Collins essentially saying we have already previously agreed to the bills the House passed. In her words, there's no reason why the bills should be held hostage to this debate over border security. How big of a deal is this?

[11:05:19] MARK PRESTON, CNN SENIOR POLITICAL ANALYST A big deal in a sense we're starting to see cracks so early on in the new Congress in this fight for the government reopening and the government funding. But let's put it in context as well. Susan Collins is up for re- election. It's difficult for her to go home and explain to her constituents in Maine why the government is shut down. It's hard for me to try to explain to you why the government is shut down other than we're seeing political gamesmanship on both sides. Cory Gardner knows about winning and losing elections. He saw the elections for the National Republican Senatorial Committee. Seeing those cracks is significant because the question is, who will follow their lead. Will we see other Senators, such as Mitt Romney, follow their lead, Lisa Murkowski follow their lead? That's when it becomes a big issue for President Trump. It really does. Right now, there's only two, so that's why we're seeing the likes of Mitch McConnell take a step back and say basically, I don't have a role in these negotiations. Nancy Pelosi, Chuck Schumer, and President Trump need to figure it out.

CABRERA: Eliana, is there any sign the president is starting to reconsider his stance?

ELIANA JOHNSON, CNN POLITICAL COMMENTATOR: You know, it's a great question. I think we saw the first signs of it last night when we heard Sean Hannity on FOX News indicate that the president would be open to making a trade involving the DACA youth, who were brought here as children illegally, for border funding. That's a trade that Democrats wanted to make over a year ago, but they are rejecting now. It does indicate the president is open to some sort of compromise on this. And it's the first crack we have seen from him. Whether Democrats are open to it is an entirely different question at this point.

CABRERA: As you mentioned, Mark, Senate Majority Leader Mitch McConnell said for days he won't bring something up for vote that the president won't sign. How much pressure does it put on McConnell?

PRESTON: Right now, it's starting to put pressure on McConnell, but he's been a survivor. He's been around for a long time and he's not going to take the pressure in fold unless he things it's for the best for the Senate Republican conference. That's his job. People need to realize that. It's always been his job. He's going to try to watch out for what's in the best interest of the majority of his Senate Republicans. So right now, pressure is building, but that's why he's trying to separate himself from this fight. He doesn't want to put any of these vulnerable Senators in difficult voting positions to send a bill to President Trump so he can just turn around and veto it. That's a terrible thing for some of these Senators, who are going to be up for re-election in 2020, these Republican Senators.


CABRERA: Eliana, Sean Hannity, somebody the president listens to closely, saying, well, maybe there's a deal to be had on DACA and the DREAMers in exchange for the funding for the border wall. And now we hear from Lindsey Graham saying much of the same thing. John Cornyn saying he wouldn't rule it out. Is that going to happen? Will they be forced to broaden the deal rather than narrow it?

JOHNSON: I think that's a deal many Republican Senators would be open to. The question about that deal, I think, is with Democrats who wanted to do it a year ago, but have since said they're no longer open to it. This is a really tricky shutdown, I think, because the border wall is now an issue that revs up both the democratic base and the Republican base. The Democrats have turned this into an issue they say they're morally opposed to the wall, they're not going to give into it. And people like Sean Hannity and Rush Limbaugh are revving up the Republican base and urging the president not to cave in on it. I think a deal could be made, but I think you have to look to people like Nancy Pelosi and Chuck Schumer to see if they're open to this now or whether they think that that would be too much of a concession to make at this point.

CABRERA: Today, on the agenda for House Democrats, a bill to protect Robert Mueller. Also, the for the People Act. This is a broad sweeping act requiring presidential candidates to release 10 years of tax returns, among other items in this bill. They're both unlikely to pass the Senate, obviously, but what message does it send to President Trump, Mark?

PRESTON: Well, clearly, we're coming after you, and we're going to do it in multiple way said. This is very much a symbolic thing they're doing. It's going to pass the House of Representatives. They ran on it. It's going to go to the Senate. It'll be dead in the Senate. But they're putting a marker down. Really, one of the most devastating things that could happen to President Trump and may happen to President Trump is you have Democrats in charge of all these oversight committees, including Richard Neal from Springfield, Massachusetts. He oversees the Ways and Means Committee. He may be able to get Donald Trump's personal taxes, which Democrats have been trying to get for two or three years now. That's when Donald Trump will lose his mind.

CABRERA: I want you both to listen to newly sworn in Congresswoman Rashida Tlaib at a celebration last night.


REP. RASHIDA TLAIB, (D), MICHIGAN: And when your son looks at you and says, Ma, look, you won, bullies don't win. I said, baby, they don't, because we're going to go in there and impeach the (EXPLETIVE DELETED).


[11:10:08] CABRERA: She's not backing down this morning. She's unapologetic.

Here's how Nancy Pelosi is responding.


UNIDENTIFIED FEMALE: Your reaction to that comment?

PELOSI: I probably have a generational reaction to it.


But in any event, I'm not in the censorship business. I don't think that -- I mean, I don't like that language. I wouldn't use that language. I don't, again, establish any language standards for my colleagues. But I don't think it's anything worse than what the president has said.


CABRERA: Now, Eliana, Pelosi downplaying the dissension in the ranks, but clearly, Dems are not all on the same page. JOHNSON: Yes, absolutely. The issue, I think, or the focus there was

more the impeachment issue than the crass language. And Pelosi clearly ducked that question.

But it's very clear that Pelosi is going to face enormous pressure from the left flank of her party, many of these young new members who ran on impeaching the president, and many of them ran in opposition to Pelosi. Obviously, she persevered in the fight. But it's going to be something, I think, particularly after Bob Mueller releases his report, that she's going to have to contend with. A lot of pressure to impeach Donald Trump. And weighing whether that is politically beneficial to the Democratic Party ahead of the 2020 election. And whether it's politically savvy to let that be done at the ballot box or in the House of Representatives.

CABRERA: And she's getting a big push right now. We already saw articles of impeachment introduced by Congressman Brad Sherman, of California, yesterday, as one of the first orders of business, and his priority.

Here's Jerry Nadler this morning, the new chairman of the House Judiciary Committee, who would play a big role in any impeachment proceeding. He's reacting to the comments for Tlaib.


REP. JERRY NADLER, (D), NEW YORK: I don't really like that kind of language. But more to the point, I disagree with what she said. It is too early to talk about that intelligently. We have to follow the facts. We have to get the facts.


CABRERA: Mark, what's your take on the talk about impeachment or not?

PRESTON: I agree with him. You can play that clip over and over and over again. It shows some reason why he should go down this path. Democrats should go down this path and look to impeach the president. Let's wait for the Mueller report, see what happens. Let Congress do its job overseeing the executive branch with these investigations. Let's see where it goes. But impeaching the president right now is a political and ridiculous and, in many ways, a reckless thing to talk about.

CABRERA: Mark Preston and Eliana Johnson, thank you both. I appreciate it.

The Dow soaring after a better-than-expected jobs report, cooling concerns of an economic slowdown, but are we really out of the woods? We're live on Wall Street. Stay with us.

Plus, administration officials scouting sites for a second summit between President Trump and North Korea's Kim Jong-Un, after Kim sent a new letter to Trump. What do we know about this letter? Details ahead.


[11:17:37] CABRERA: The Dow soaring right now, and a strong jobs report crushing expectations. New comments also this morning from the Fed chairman, Jerome Powell, easing fears on rate hikes.

CNN's Alison Kosik is joining us from the New York Stock Exchange.

Alison, good news after a bad 2018 for the markets.

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Yes, 2019 starting off very different, especially now that we're at the end of the first week of 2019. The day beginning with a super strong jobs report, showing in December 312,000 jobs were created, blowing away expectations. The unemployment rate moving higher, but for good reason, showing more people getting back into the labor force. We saw stocks rally right from the open. By the time Jay Powell, the Fed chair, began talking, we saw the market up about 420 points. Once he started saying certain things, the market rocketed higher, over 600 points for the Dow. That's because what has been worrying Wall Street is what kind of strategy the Fed was going to take with its rate-hiking plan. And once Fed Chair Jay Powell said comforting words like this, "We'll be prepared to adjust. We're listening carefully to the message that the markets are sending. And the central bank will be patient with raising interest rates." Those were the buzz words that got investors to jump back in after that massive selloff yesterday of a 650-point loss on the Dow. We're seeing just the opposite, a strong reversal with the Dow up 628 points.

The talk, the roundtable that Jay Powell is involved in really got interesting when the moderator started asking about whether or not Jay Powell has gotten any dissatisfaction or communication from the White House. Listen to what happened.


JEROME POWELL, CHAIRMAN, FEDERAL RESERVE: Nothing has been scheduled. I would say that meetings between presidents and Fed chairs do happen. And they have happened. I think, I can't think of any Fed chairs who didn't eventually meet with the president, but nothing has been scheduled. I don't really have anything to report on that.

UNIDENTIFIED MODERATOR: If the president asked you to resign, would you do it?



KOSIK: Now, notice, Ana, he didn't say, I don't know if the president can fire me, but I will not resign.

Ana, back to you.

CABRERA: An emphatic no when asked that question, without hesitation.

Alison Kosik, thank you. Joining us, Mark Zandi, chief economist for Moody's Analytics.

Mark, thanks for being with us on this Friday.

First, I want to get your assessment of the latest jobs report and what it tells us about the strength of the U.S. economy.

[11:20:08] MARK ZANDI, CHIEF ECONOMIST, MOODY'S ANALYSTICS: Well, it was great. Usually, a jobs number report has a blemish or two, but there were no blemishes in this report. Not only did we create a lot of jobs, all kinds of jobs, but wage growth continued to accelerate. That's really good news. People are getting bigger pay increases. All positive. This, at the least, dispelled the growing concerns particularly among investors that a recession was around the corner. There's no recession around the corner. Growth is slowing and that will become more obvious through 2019, but I don't think recession is likely. That's the message in this report.

CABRERA: Do you see any red flags in the U.S. economy right now?

ZANDI: Sure. I mean, there are. The president's trade war is doing real economic damage, overseas, in China, rest of the world. That's reverberating back on us. It's making businesses very nervous. A lot of CFOs think we'll have a recession, in large part, because of the trade war. It's affecting their investment decisions. The government shutdown is an issue. The political dysfunction in Washington, I think, is an issue. There are a lot of red flags. And hopefully, the president will get it together and find a face-saving way out of the trade war pretty soon. If he does, we'll be OK. If he doesn't, we'll have a problem.

CABRERA: Let's talk more about that because the U.S.-China trade talks appear to be back on with negotiations reportedly scheduled for next week, according to the Chinese. What position should the U.S. take and what would come from the talks that would settle down or stabilize the stock market?

ZANDI: The only thing that's going to stabilize the stock market is if they come to some kind of arrangement, some kind of deal. If we come out of the discussions and the president still has tariffs on the Chinese, and worse, even increasing tariffs on China, the stock market is going to go down and will take the economy with it. Key number one, the president has to come up with some arrangement. Is he going to come up with an arrangement that changes the game with China? I'm very skeptical. But at this point, we just need some kind of deal, some kind of arrangement. This trade war is doing a lot of damage.

CABRERA: We know what's happening in China impacts American companies.

Listen to the chairman of the White House Council of Economic Advisers in an interview here on CNN with Poppy Harlow just yesterday.


KEVIN HASSETT, CHAIRMAN, WHITE HOUSE COUNCIL OF ECONOMIC ADVISORS: It's not going to be just Apple. I think there are a heck of a lot of U.S. companies that have sales in China --


HASSETT: -- that are basically going to be watching their earnings be downgraded next year until we get a deal with China.


CABRERA: A heck of a lot of companies, he says. Just how much would a Chinese slowdown affect American companies and impact the U.S. economy, Mark?

ZANDI: Yes, Kevin Hassett is right. This is a big deal. The U.S. economy, the Chinese economy, we're tethered at the hip. So if the Chinese economy is struggling, it's going to cause our economy to struggle as well. There's no way around it. Apple is symbolic of that. But every company that trades on the U.S. stock exchange has big operations and big plans for doing more business in China. So if China has an issue, we've got an issue, the whole world has an issue. This trade war has to be resolved and it has to be resolved quickly.

CABRERA: It sounds like both countries are feeling the pain of this trade war. Who has the leverage?

ZANDI: You know, there's self-inflicted wounds on both sides. No one has leverage here. It's doing damage to both our houses. And so that hopefully means that the president and President Xi are going to come to terms because, if they don't, then it means that we're going to have problems all over the planet. So I think no one has leverage here. The leverage is getting an arrangement done.

CABRERA: Apple taking a lot of heat this week, plunging in value. One business reporter put it, "Apple's value has declined so much in the past few months, it's the equivalent of losing a Facebook or almost any other U.S. company".

How much trouble does this spell for Apple?

ZANDI: Well, you know, in my sense, I'll take Tim Cook, the CEO of Apple, at face value when he says the problem Apple has is the sales in China. If you look at their overall global sales, it looks fine. It's really the Chinese sales that are really struggling. So my sense is that if we are able to resolve the trade war and that fades away as an issue, sales rebound in China, Apple will be just fine. It is the iconic American company. It wasn't too long ago, it was the highest market cap company in the world. So it's doing a lot of things right.

And I think just as long as, you know, we don't mess things up for American businesses, American businesses will do just fine, including Apple.

CABRERA: We'll end on that high note.

Thank you, Mark Zandi, for being with us.

ZANDI: Thank you. [15:24:59] CABRERA: All eyes on the White House right now.

Congressional leaders set to meet with the president in the Situation Room at any moment as they battle over that border wall.

Stay with us.


[11:29:51] CABRERA: Starting any moment now, in the Situation Room, a second meeting between the president and congressional leaders. Senate Majority Leader Mitch McConnell spotted moments ago arriving at the White House. The question is, will this move the conversation forward? Will it spark a deal to end the government shutdown? The president and top Democrats