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Trump, Democrats to Meet Again on Shutdown; Some GOP Senators Break with Trump on Shutdown Strategy; U.S. Economy Adds 312,000 Jobs in December; Trump, Congressional Leaders to Meet in Situation Room; U.S. National Debt Reaches a New High Under Trump; New Congress Brings More Democrats, Diversity and Women; Dow Set to Jump on Jobs Report and News of U.S.-China Trade Talks. Aired 9-9:30a ET

Aired January 4, 2019 - 09:00   ET


[09:00:00] POPPY HARLOW, CNN ANCHOR: The U.S. economy adding 312,000 jobs in December. Again, much better than economists were predicting. It could be just what the stock markets need after it plunged yesterday. More on that in a moment. But first two weeks in, still no way out. This morning congressional leaders head back to the situation room as the government shutdown enters day 14.

It is the first day that Nancy Pelosi will face the president as House speaker in what is shaping up to be a major power struggle. Last night House Democrats defied the president, passing bills to re-open the government without a dollar for the border wall. By the way, those bills are going nowhere because Senate Majority Leader Mitch McConnell says he won't even bring them to the floor for a vote.

But are crack in the Republican Party stance already forming? Republican Senator Susan Collins and Cory Gardner both signaling they are ready to break with the president over the funding for the walls and the shutdown, and then deal with border security later.

Let's start with our Jessica Dean. She's at the White House.

Look, it's Susan Collins and Cory Gardner now but there are other vulnerable Republicans in the Senate who Mitch McConnell may need to soon start listening to, right?

JESSICA DEAN, CNN CORRESPONDENT: Right. And the longer this drags on, the greater that pressure is going to get, Poppy. We are expecting congressional leadership here at 11:30. The great eight will be coming here. And listen, the landscape has changed in the last 24 hours. As you mentioned, Nancy Pelosi now officially the speaker of the House. This as we are now in day 14 of the shutdown, the longest shutdown in our history. 21 days, that was back in 1995 to 1996. So we are getting ever closer to that number. And right now no one is backing down. Listen.


MIKE PENCE, VICE PRESIDENT OF THE UNITED STATES: The president has made it clear. We are here to make a deal, but it is a deal that's going to result in achieving real gains on border security, and you have no border security without the wall. We will have no deal without a wall.

REP. NANCY PELOSI (D), HOUSE SPEAKER: We're not doing a wall. Does anybody have any doubt that we are not doing a wall? So that's that.

UNIDENTIFIED REPORTER: Are you worried about backlash?


PELOSI: No. 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.


DEAN: So the two sides sitting down again today in the situation room. Again, the White House, the president, really trying to frame this as an emergency, really upped the ante by holding that meeting in the situation room. And we're getting some reporting from two people who were in the situation room back on Wednesday when they had their first meeting there. And apparently President Trump was lamenting to Senator Schumer about some appointees who have been languishing without votes. And the two men started arguing.

They were separated -- Vice President Pence was in the middle of them. They're arguing. And at one point, apparently, according to these two people, President Trump pulled out the letter from Kim Jong-un and kind of just flippantly slid it across the table there.

So, Poppy, that's how things went last time. We'll see if things progress any further today.

HARLOW: Hey, it's a new day.

DEAN: Yes.

HARLOW: Anything can happen.

DEAN: That's right.

HARLOW: Jessica Dean, thank you very much.

So let's go to Capitol Hill and talk more about these cracks among some Republican senators and key Republican senators.

So, Sunlen, good to have you. We saw five Republicans in the House vote with the Democrats yesterday on the series of bills to get the government back open. Now you've got the two senators I just mentioned, Cory Gardner, Susan Collins, basically saying the president is wrong at this point.

SUNLEN SERFATY, CNN CONGRESSIONAL CORRESPONDENT: That's right, Poppy. These are small but significant cracks as now this government shutdown, this partial government shutdown reaches now its two week, 14-day mark. As you said, Senator Cory Gardner and Susan Collins essentially saying we've got to figure out a way to end this, even if that means that the president not getting totally what he wants. Cory Gardner, of course, a vulnerable Republican senator, he says if

any bill needs to pass with or without additional funding for Trump's border wall, which of course has been his line in the sand, he wants money for his border wall, and Susan Collins saying that she would essentially be in support of what the House passed last night, separating the DHS funding from the other appropriations packages.

The House, as you noted, passed those bills to end the government shutdown last night with a few Republican votes, two significantly. This all sets up that dramatic very important meeting over at the White House today at 11:30 a.m. Eastern Time. Going into that meeting, though, of course very notable that both sides seem even more entrenched, notable there that you have Pelosi saying we are not doing the wall. And Vice President Pence could not be clearer, saying no deal without a wall, Poppy.

HARLOW: Yes. All right. But, Sunlen, before you go, we did see some important rule changes yesterday passed in the House as the new Congress started session. What are they?

SERFATY: That's right. I want to tell you a few of them and these are just new protocols that every -- the majority party puts in place at the start of every new Congress.

[09:05:03] Here are just a few of the more interesting ones. The House voted last night to add a new select committee on climate change, banning sexual orientation or gender identity discrimination and allowing religious head gear in the House chamber. Of course all new changes that come in with a new majority party and that's something the now newly controlled House by the Democrats passed late last night, Poppy.

HARLOW: OK. Good to know, Sunlen. Thanks for the reporting.

Let's talk about all of this. Jackie Kucinich is with me, Washington bureau chief for the "Daily Chief" and Josh Dawsey, White House reporter for the "Washington Post."

Good morning. I wish it were a morning with a deal. It is not. Maybe it will be a Friday evening with a deal. Who knows? Let's talk about specifically, Jackie, to you first, what Susan Collins and Cory Gardner are saying and how significant it is.

So Susan Collins says of the Dems plan, quote, "I'm not saying their whole plan is valid, but I see no reason why the bills that are ready to go on which we have achieved an agreement should be held hostage over border security." And Cory Gardner of Colorado, quote, "We can pass legislation that has the appropriations number in it while we continue to get more, but we should continue to do our job and get the government open."

There -- you know, it's them now. But you do have other vulnerable Republicans in the Senate. You've got Tillis.

JACKIE KUCINICH, CNN POLITICAL COMMENTATOR: Right. HARLOW: You got McSally. And I just wonder when the pressure gets to

be enough that McConnell can't keep saying I have no real part in this and I'm not, you know, going to bring this to the floor.

KUCINICH: Well, I mean, the reason McConnell is saying that is because the president has already cut his legs out on trying to get a deal. But you're right. When his members start dropping off one by one and, you know, perhaps there are enough votes to pass something through the Senate in defiance of McConnell, that's going to put him in a really tough spot. And you're right, the math is getting trickier for him.


KUCINICH: Within his caucus. Also, someone like Joni Ernst, who was very adamant about not shutting down the government before, keep an eye on her as well. But McConnell really does face some tough choices going into this. And because he doesn't want to embarrass the president.

HARLOW: Yes. But the president, you know, said, we know from our reporting, to Chuck Schumer in the White House two days ago, you know, I'd look foolish if I did this. Right? So who's going to give here, and when is this going to become about more than how you look. And on the other side of this, Josh, when it comes to the Democrats, Nancy Pelosi, you just heard it, saying a wall is immoral. She said there's an immorality to it.

Is she by using such strong language like that and definitively saying no money for a wall, painting Dems into a really tricky corner?

JOSH DAWSEY, CNN POLITICAL ANALYST: Well, her calculation seems to be that her caucus, her conference does not support giving the president any money for a wall and right now that she's in a position of strength, that she can keep it from happening. You know, politicians tend to act based on their incentives. And it's hard to see right now what incentive Nancy Pelosi has giving the president money for a wall.

On the flipside, Poppy, it's hard to see what incentive the president has to end this. He's gone for two weeks, calling for, you know, money for a wall or he's not going to reopen the government. And it would be difficult to capitulate right now. So you have both sides, based on my reporting, who are pretty entrenched determined to get what they want and not much motivation to move to the middle.

HARLOW: All right. So, you know, the president did not hold a briefing, by the way. I think, Jackie, you said in the briefing room did not a briefing make. Right?

KUCINICH: It's true.

HARLOW: But he did talk to people at the lectern. And here's what he said about how he thinks the American people feel about this wall despite polling saying otherwise. Listen.

(BEGIN VIDEO CLIP) DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I have never had so much support as I have in the last week over my stance for border security, for border control, and for, frankly, the wall or the barrier. I have never had anything like it in terms of calls coming in.


HARLOW: I called the White House this morning, OK? Here's what I heard.


UNIDENTIFIED FEMALE: We apologize, but due to the lack in federal funding, we are unable to take your call. Once funding has been restored, our operations will resume. Please call back at that time.


HARLOW: So unless a lot of American voters, Jackie, have the president's cell phone number --

KUCINICH: You know, it's a really good point. That said, I think it's pretty clear that Trump is listening to people like the folks he had behind him who amplified his message yesterday at whatever that was, a photo-op with words. But -- and FOX News, frankly. And that's who the president -- and that's been clear from the onset of this, that the president is very much tying his own political fortunes to the wall.

[09:10:06] You heard Lindsey Graham do that just a couple of nights ago.


KUCINICH: And when the president comes out of that box, you see it on Twitter. You hear it on FOX News. And that's what he's concerned about. Yes, polling from Democrats, independents and Republicans, it does say that they're not in favor of what he's doing. But when you look at the Republican numbers in some of these polls, they are absolutely telling the president to hold --

HARLOW: Well, it's true.

KUCINICH: -- to what he cares about.

HARLOW: That's a good point, Josh. You look at the CNN polling from less than a month ago, 81 percent of Republicans do favor a wall.

DAWSEY: Well, many of the president's decisions in this administration have been to shore up his base, to keep his base with him, his core supporters, the 35 percent, 40 percent of folks who are with him no matter what, are somewhat unshakable. You saw what he did in deciding to shut down the government and reversing himself in the initial criticism. It was after an outcry of criticisms from folks like Laura Ingraham and Anne Coulter and from FOX News hosts in the morning who said that he would look weak or would look -- you know, if he was not following through on his promises to supporters.

Many of the president's core instincts are always to make sure he keeps his political base with him. It's not necessarily to broaden the base or to always have a message of inclusion that brings new people into the tent. It's to keep everyone in the tent to stay in the tent. And I think that's what you're seeing here. You're seeing a position that's very popular among Trump supporters, and he's holding it.

HARLOW: Yes. America is just a lot bigger than the folks in the tent. Right? And your job, Congress and the president, is to keep the government functioning for the American people.

Thank you both. Have a nice weekend.

DAWSEY: Thank you.

KUCINICH: Thanks, Poppy.

HARLOW: Let's get back to some very good news for the U.S. economy this morning. That is the jobs report.

Our chief business correspondent Christine Romans is here. Much better than expected.

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Yes. A strong end to a strong year for job creation. And Americans enjoying wages, the highest wage growth, rather, in about a decade.

Let's look at the numbers. 312,000 net new jobs, and when you put that in perspective, you can see the last 13 months or so there. October-November were revised higher. So that's a strong finish to the year and the strongest job growth in December since February.

When you look at where the jobs are growing, Poppy, it was really broad based. Health care, this has been a consistent winner for a decade. Construction, manufacturing, retail, offices. It was widespread gains.

Now when you look at the unemployment rate, it ticked up to 3.9 percent. Why is that not alarming that it ticked up? Because 400,000 people came off the sidelines.

HARLOW: Right.

ROMANS: They had been out of the labor market.

HARLOW: Right.

ROMANS: They came back in and economists this morning are saying it's because of those higher wages that they're starting to come into the labor market.

HARLOW: Right.

ROMANS: So you saw labor force participation rate is something like a five-year high. That's a good number. It shows more engagement in the American economy.

So annual jobs growth. At the end of the year, so let's stack it up altogether.


ROMANS: 2.6 million net new jobs created. That's a strong performance, the strongest since 2015 when it was 2.7 million. 2014 was the best in its recovery when it had three million annual jobs growth.

What is this going to mean for the Feds? This is where it gets super interesting.

HARLOW: And we hear from Jerome Powell today.

ROMANS: Yes. Yes. And I'm fascinated because what you're hearing from analysts and economists is this is the economy 1, market 0. Right? The markets have been telling us there is something very dangerous happening and this number is telling us that the economy is strong and the Fed has been right to be raising interest rates.

HARLOW: Right. And so we're going to know what the market thinks in about 17 minutes when the market opens here.


HARLOW: Thank you, Romans. Appreciate it.

ROMANS: You're welcome.

HARLOW: And we will take you to Wall Street next. The markets are set to rebound. Take a look at futures. You've got Dow futures up about 300 points right now as China is set to begin these trade talks again with the U.S.

Also fired up over the shutdown, how would you like to work every day without a paycheck? The government worker about to join me likens it to involuntary servitude.

And now two Senate Republicans budging on the border wall funding. The question becomes, will more Republicans in the Senate follow their lead or are they going to stick by the president? We'll ask one next.


[09:15:00] POPPY HARLOW, HOST, NEWSROOM: Welcome back. In two hours, President Trump will meet for the second time this week with congressional leaders. This as the shutdown standoff enters day 14. The last time they met, two days ago, no one budged.

Now Democrats control the House. Will this change anything for negotiations? With me now is Republican Congressman Gary Palmer of Alabama, he serves as the chair of the Republican Policy Committee. Good morning.


HARLOW: Let's talk about making a deal here. When you were sworn in for your third term just yesterday, you said you were, quote, "eager to get back to work." So what will you specifically do to help strike a deal and get the government open?

PALMER: Well, I think we need to go back to previous deals that were struck back in 2006. You had then Senator Barack Obama, Senator Hillary Clinton all supporting building a fence. Later during the Obama administration, they actually supported $40 billion for border security.

That included 700 miles of fence. So I think if we can look back at what we've agreed on in the past, and look at where we are now, I think we could reach an agreement.

HARLOW: All right, so you're talking about the Secure Fence Act in 2006. And it did get their support, Nancy Pelosi voted against the Secure Fence Act, and the difference is that's a fence, not a wall. So it sounds like you're saying to the president, Mr. President, let's agree to a fence here. Is that right?

PALMER: Well, what I'm saying is that we need to secure our borders. And you know, whether it's a wall or a fence, and honestly, it's going to be a combination of things --

HARLOW: No, but it makes a difference, Congressman. I mean, to the president, it makes a big difference. And it sounds like to me, you're saying, look to history, look to the Secure Fence Act, 700 miles of fence.

[09:20:00] PALMER: Well, Poppy, what I am saying is --

HARLOW: Let's do that, Mr. President, is that -- is that right?

PALMER: What I'm saying is that rather than making this a political argument, I want to make it about the American people. We've got -- it was reported that we had 72,000 overdose deaths last year among African-Americans, almost half of them were fentanyl related.

Eighty five percent of the fentanyl is coming across our southern border. We've got ISIS encouraging their followers to cross our southern border because it's so poor as to carry out a task against us.

We are interdicting, we're arresting terrorists or suspected terrorists per day trying to get into the country. Not all of them across the southern border, but there are people who want to do us harm. And then on top of all that, we've got people who are here illegally, who are engaging in drug trade, who are committing violent offenses.

We just had this reported in Alabama yesterday about a guy --

HARLOW: So -- PALMER: Who had been -- who was here illegally, been -- come in here

multiple times, had four previous drug arrests, was convicted for trafficking cocaine, and he raped a little girl.

HARLOW: Congressman, that is --

PALMER: So I think we need to take this, the politics out of it --

HARLOW: That is horrific --

PALMER: And get it back to the American people.

HARLOW: Absolutely, I mean, that's your job. That's why we pay all of you, right?

PALMER: That's right --

HARLOW: To get a deal, and it sounded to me like you were saying that you're willing to negotiate here and it doesn't have to be a 2,000 mile-ish wall. You have Republicans, five in the House of your fellow Republicans, including --

PALMER: Well, this discussion is not even about a 2,000 mile --

HARLOW: Congressman Will Hurd -- hold on one second, hold on one second, Will Hurd of Texas, a border state who voted with the Democrats yesterday. And I think he agrees with you on a lot, and he wants more border security, and he says -- and he has authored, as you know, bipartisan legislation focusing on border security, specifically more in better technology at the border rather than a physical wall. Is that a deal that you could get on board with?

PALMER: I could. Will is a great member, and he has a background that really, I think informs his opinion extremely well. And the practical issue here is, we're not going to build a wall that walls off the Rio Grande River. This is going to be a combination of a wall fence technology, surveillance equipment.

But fundamentally, it's got to be all of that, plus additional agents at the border. I've been to the border, particularly in Arizona and during the Obama administration, they would not allow for deployment of our border security. They were 20-25 miles back from the border.

That's not helpful in terms of securing the border. So it's going to be a combination of things.


PALMER: And the president is not asking for funding for 2,000 miles of border security. He's asking for $5.7 billion, which is a start, it's a down payment.

HARLOW: For a wall, for a wall to be clear. But we have limited time now, and I want to get you on some other really important issues, especially given how concerned you have been vocally about the national debt. We now know that the national debt has increased by $2 trillion since President Trump took office.

And he promised, remember in that "Washington Post" interview two years ago, when he said he promised to get rid of the national debt by the end of his presidency, over an eight-year period if he serves two terms. How concerned are you about the fact that it's gone up?

PALMER: I'm very concerned in this -- I'm very concerned about it as chairman of the Policy Committee. I have already started discussions with other colleagues about how we can address this. And I honestly think that this needs to be a bipartisan issue.

The future of the country hangs in the balance. And it won't matter if you're Democrat or a Republican, if we continue down this very dangerous fiscal path.

HARLOW: Final question to you. You are joined, sir, in Congress by a record setting number of women this term, Republicans and Democrats. History was made yesterday. What do you think that will change in Congress and what hope do you have that it will bring change?

PALMER: Well, I hope it creates opportunities for dialogue. And I don't think we've been particularly good at that in the last couple of years, maybe the last several years. But I'm hoping that with this influx of new people into Congress, regardless of whether they're women or men, it doesn't matter to me.

I think we need to have a dialogue, and I think we need to be looking down the road to the future of the country and what's best for our children and grandchildren. And literally we're at a point now where we're talking about what's best for this generation because that's how dire I think the financial condition of the country is.

HARLOW: Yes, look, it's a real problem when you've got a national debt of almost $22 trillion. Congressman Gary Palmer, we wish you luck, thank you.

PALMER: Thank you, Poppy.

[09:25:00] HARLOW: Another week, another roller coaster for Wall Street. But news of trade talks between China and the U.S. this morning, what impact will that have? Look, the market loves these job numbers that just came out. The Dow up, futures up 319 points. We'll be back with the opening bell in a moment.


HARLOW: All right, the strong start off for the market is what we're looking at this morning when Dow -- when the stocks open in about 30 seconds. You see the opening bell there. Really good jobs report. Also news that the U.S. and China are set to restart these trade talks.

The U.S. delegation going to China on Monday, this is after the Dow fell 660 points yesterday after one of the world's biggest companies, Apple, sounded the alarm on China's economy. Also this morning, investors are keeping a very close eye on the Fed Chairman Jerome Powell.