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Trump and Leaders Meet; Shelby Warns Shutdown May Last; GOP Breaks with Trump; Clinton Courted for Support; Feinstein and Harris at Event; Fed Chief Speaks Out; USS Cole Mastermind Believed Killed; Freshman Democrat's Comments. Aired 1-1:30p ET

Aired January 4, 2019 - 13:00   ET

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


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[13:00:35] BRIANNA KEILAR, CNN ANCHOR: I'm Brianna Keilar, live from CNN's Washington headquarters.

Underway right now, the shutdown debacle continues with no deal in sight. Some Republicans breaking with the president.

Earmuffs required. Why an R-rated declaration from a freshman lawmakers shows the impeachment conundrum for Democrats.

Plus, n-o he won't go and Wall Street loves it. After weeks of attacks, the man in charge of the Fed responds to President Trump.

And it's been a weird 24 hours for one freshman Democrat as the right tries to vilify her over a cute dance video from her college days and she proposes a tax hike on the wealthy.

But first, face-to-face but far apart. President Trump and congressional leaders are meeting at the White House right now but there's little hope of a breakthrough to end the partial government shutdown. Eight hundred thousand federal employees are on furlough or working without pay as the White House and Democrats are locked in a power struggle over the border wall.

(BEGIN VIDEO CLIP)

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

MIKE PENCE, VICE PRESIDENT OF THE UNITED STATES: You have no border security without a wall. We will have no deal without a wall.

(END VIDEO CLIP)

KEILAR: All right, let's bring in CNN White House correspondent Kaitlan Collins.

There's not much area of agreement there, Kaitlan, but we are seeing some Republicans breaking with the president.

KAITLAN COLLINS, CNN WHITE HOUSE CORRESPONDENT: That's true, those two Republicans that have broken and said, hey, let's get this shutdown over with, but that is likely not the conversation that's happening with those officials in the Situation Room right now meeting with those congressional leaders. The second time they've met in the Situation Room this week to discuss the government shutdown. And it probably sounds a whole lot more like what you heard from Nancy Pelosi and from the vice president, Mike Pence, during those interviews last night.

Now, a lot of White House officials that I spoke with, several, said they did not expect a lot of progress to come out of this meeting today because essentially they're still where they were when they met on Wednesday. And that was a meeting that was described to me as essentially just went in circles between the president, the vice president and Nancy Pelosi and Chuck Schumer while several other Republicans weighed in at times, agreeing with the president that he shouldn't soften his demands for a border wall. So we're not expecting a lot of progress from this, but what we are seeing is a little bit of change, it seems, as to how the White House is going to be spinning this when they emerge from this meeting.

Now, on Wednesday, we had not only Kevin McCarthy and several other Republicans, including Steve Scalise, come out and speak to reporters after that meeting, but also Chuck Schumer and Nancy Pelosi. However, the White House didn't put out any kind of briefing or debriefing on what happens in that meeting, but today it looks like they're changing course because we are hearing from sources that they do expect there to be an event in the Rose Garden with President Trump after this meeting is over and after the Democrats have already given their side of the story.

So we'll be waiting to see what the president says, but it's likely going to be similar, Brianna, to that letter he sent to The Hill earlier essentially outlining why he still believes this shutdown is worth it for this wall.

KEILAR: All right, Kaitlan Collins, thank you for that report, from the North Lawn.

Now, as congressional leaders are meeting there at the White House, their colleagues on The Hill are less than optimistic that the two sides are going to find a compromise here. Alabama Republican Richard Shelby, he's the chairman of the Senate Appropriations Committee, told reporters, quote, I'm thinking we might be in for a long haul here. I along haul, in other words. I don't see any quick resolution to this.

And then he went on to say that the shutdown could last for months and months. To reopen the government and pay the 800,000 affected employees, not to mention restore the employment of the untold thousands more workers who are contracted as janitors, cafeteria workers, other positions that keep agencies operational. Someone has to blink or the two sides have to compromise.

Zachary Wolf is our digital director for CNN Politics.

You've been looking at how other shutdowns have ended. Tell us about this. ZACHARY WOLF, CNN POLITICS DIGITAL DIRECTOR: That's right. Now we, of

course, see that, you know, Democrats like Nancy Pelosi say there will be absolutely no wall and Republicans like Mike Pence says, you know, we're not going to end this without a wall.

We have seen these previous shutdowns where, you know, essentially at some point someone has to blink. And the models that you can look at, there are, of course, the famous Clinton and Gingrich shutdowns. This is two separate shutdowns. Bill Clinton arguably blinked first in the first shutdown when he agreed to a seven-year budget proposal, not to get too far in the weeds of that argument. But then later on, that boomeranged back around and really came back on Republican when they insisted on a much longer second shutdown and they ultimately blinked. They didn't get cuts to Medicare that they were looking for.

[13:05:08] The second key one to look at is the Obamacare shutdown. This was when Republicans who then controlled the House wouldn't give spending bills to Democratic President Obama or a Democratic Senate. They shut the government down for a number of days and John Boehner, shortly after this one ended, Mitch McConnell sort of rode to the rescue with Chuck Schumer on that one. But shortly after it ended, he sort of admitted defeat and admitted that they had tried to fight the good fight and they had lost it in that case.

And then, most recently, this is a Trump shutdown, and this one's unique because it was when Republicans controlled the entire Congress. But, you know, the House, the Senate, and the presidency. But Chuck Schumer, the Democratic leader, and other Democrats in the Senate hadn't allowed spending bills to get through using a filibuster there. They sort of blinked very quickly. They were trying to shut down the government over support for the DACA, the dreamers, the so-called dreamers. That only lasted about a day before Democrats totally retreated on it. Of course, DACA is sort of held up in the courts right now, but some people want to bring it back and use it as a bargaining chip right now.

KEILAR: All right, Zac, thank you so much. A really good explainer there.

And I want to bring in CNN political director David Chalian to discuss what's going on here in Washington.

Some of these Republicans, you're starting to see, David, they're -- they want something different than what their Republican leadership is doing.

DAVID CHALIAN, CNN POLITICAL DIRECTOR: Yes. This is going to be an interesting dynamic because Mitch McConnell publicly acts -- is acting like he wants no part of this whatsoever. This is President Trump, Nancy Pelosi, Chuck Schumer, they've got to figure out what can be passed and signed. But that's not the reality. And you know that.

If you look at the 2020 Senate map, remember, we just came through a midterm cycle. 2018 was a very different landscape. It was -- the Senate races were playing out on all Republican turf, right?

KEILAR: Yes.

CHALIAN: That's not the case in 2020. There are lots of Republican senators up in very competitive states, like Cory Gardner in Colorado, Susan Collins in Maine, Tom Tillis in North Carolina, even Martha McSally, who was just appointed to the Senate in Arizona, is going to have to run for election in 2020. And you're hearing from those folks real concern about the shutdown continuing right now. In fact, they're talking like Democrats, Brianna, and saying, we should at least open up the government on what we agree on and then fight over the border security.

KEILAR: We had talked recently about President Obama meeting with some potential 2020 hopefuls. Well, it sounds now, according to two sources close to Hillary Clinton, she's been meeting with some of them. What's going on here?

CHALIAN: Well, not terribly surprising that the former Democratic nominee would, of course, meet with potential candidate who want to run. But what is so intriguing here, of course, is that Hillary Clinton, no matter how many times she has said she has no intention for running for office again, is still sort of looming out there as sort of the ghost of the last campaign.

Taking these meetings, of course, is one indication that perhaps she's not really running. They would love her support and guidance but they, of course, would love her endorsement. I'll be very, very surprised, Brianna, if Hillary Clinton jumps into the 2020 Democratic fray with an endorsement. My guess is she stays out until there's a Democratic nominee.

KEILAR: So yesterday Democratic Senator Dianne Feinstein was speaking glowingly of Joe Biden. It was tantamount to this endorsement for 2020. And then it was, oh, I also like Kamala Harris, who is the junior senator from California, who is her colleague. But interestingly last night these two senators were actually seen having dinner together in a group.

CHALIAN: Cleanup on aisle one. No, I'm kidding. I know that the dinner was scheduled before Senate Feinstein made those comments.

KEILAR: Yes.

CHALIAN: But having the images out there of them dining together, having the word out there that they had dinner together probably is going a little distance in trying to heal any rift that may have been created.

If Senator Harris actually gets into this race, and if Joe Biden's in this race, Dianne Feinstein will have a big decision to make about who she would go with. It could be quite problematic for her home state co-senator, if you will, to not have that kind of home state support.

KEILAR: It's this generational question --

CHALIAN: It is.

KEILAR: That is facing so many Democrats in this crowded field.

David Chalian, thanks so much.

CHALIAN: Thanks, Brianna.

KEILAR: Federal Reserve Chairman Jerome Powell says he has no plans to quit his job even if the president asked him to. Here's how he responded to questions about whether he's been asked to meet with President Trump.

(BEGIN VIDEO CLIP)

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

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

POWELL: No.

(END VIDEO CLIP)

KEILAR: No laughing there.

Now, President Trump, as you might recall, repeatedly criticized and insulted Powell and the Fed over its handling of the economy. At one point even saying that the Fed was going -- was, quote, going loco for raising interest rates. And there were even reports saying that Trump was considering firing Powell as U.S. markets plummeted. That's what that question there was all about.

[13:10:05] Keeping an eye on the Dow. Look at that, up over 800 points. And that is partly because of Powell's comments.

I want to bring in Richard Quest. He's CNN's business editor at large. He's also the host of "Quest Means Business."

Why was this so important that Powell say this? Clearly it's having an impact, Richard.

RICHARD QUEST, CNN'S BUSINESS EDITOR AT LARGE: It is having an impact. The day was already off to a good start, Brianna. Those jobs numbers were an excellent boost to a market looking for some form of good news after the Apple announcement the other day. And so we're already poised, if you like, for a rocket to rise. And then when Powell made the comments, particularly his comment when he said that the Fed would be flexible, that they would be patient about raising interest rates, that they had been listening and were aware of the market's unease.

And with that it was Christmas all over again and more. The market went up and we're, as you see, we're now up to a ridiculous number, 800 and something points. And it doesn't seem like it's only -- the market seems to like what's happening. And one point on this Powell point. Jerome Powell, the mere prospect

of the president firing or getting Powell to resign had caused a lot of unease in the interim Christmas period. That's now off the table.

KEILAR: When you're looking at these jobs numbers we're seeing, what are you reading into that?

QUEST: Oh, I see excellent news from the U.S. economy's point of view. More people are coming back into the workforce, they are unemployed, therefore previously people thought there's no way I'm going to get a job. I'm not even going to bother looking. So they didn't appear in the unemployment statistics.

Now they're looking again. So that's why unemployment ticked up just a small amount.

But if you look at all the other barometers, unemployment is good, the number of new jobs, very healthy, seasonally adjusted at over 300,000. The worker participation rate was good, average earnings. The average earnings, Brianna, this is the barometer that we use to determine whether ordinary Americans are feeling -- are actually getting any benefit from this growth. And it would appear to suggest they are.

Now, here's the double-edged sword because I cover economics. And, as you know, I always have an umbrella because it's not always sunny. As long as those numbers are good, Jerome Powell at the Fed has good reasons to keep raising rates. There's always two sides to this coin. But today, at least, we can simply say things are looking a bit sunnier.

KEILAR: All right, one day at a time. Richard Quest, thanks so much for that.

Quote, we're going to impeach this MF-er. That from a freshman Democrat. And now Nancy Pelosi has responded.

Plus, an American president defending the Soviet invasion of Afghanistan. While that is stunning in itself, Republicans are silent on this.

And the right escalating its attacks on Alexandria Ocasio-Cortez. This as the freshman suggests a 70 percent tax on the wealthy to fund a climate change plan. We'll be discussing that.

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[13:17:33] KEILAR: We have some breaking news into CNN. The al Qaeda operative considered the mastermind of the 2000 attack on the USS Cole is believed to be dead, killed in a U.S. air strike in Yemen.

Let's bring in Pentagon reporter Ryan Browne.

Tell us about this.

RYAN BROWNE, CNN PENTAGON REPORTER: Well, Brianna, we're being told that this week the U.S. carried out an air strike targeting al-Badawi, who is believed to have helped orchestrate the October 2000 attack on the USS Cole, which left 17 American sailors dead and wounded 39 others. Now, al-Badawi was targeted and one official telling my colleague Barbara Starr that he is believed to have been killed in this air strike which took place in a remote area in Yemen.

Now, the U.S. has carried out multiple air strikes in Yemen targeting al Qaeda operatives over the last several months and years. But, again, this guy, Badawi, was a long sought -- he was on the FBI's most wanted terrorist list. The State Department had offered $5 million for information leading to his capture. And he'd been sought by American authorities for a long time. And he was actually captured soon after the bombing on the call, but he escaped from two prisons in Yemen. One time he and his fellow inmates actually dug a tunnel to escape back in 2006 using broomsticks. So he had been on the run for some time. U.S. intelligence long looking for this al Qaeda operative who had led or helped plan the Cole bombing. It finally looks like they may have found him and killed him in this air strike.

KEILAR: All right, Ryan, thank you for that report.

Now, as the Mueller probe into Russian interference in the election continues, most Democrats are reserving judgment on whether to impeach President Trump. But a newly elected House Democrat is leaving no doubt about her position. Michigan Congresswoman Rashida Tlaib used an expletive in pushing for the president's impeachment.

(BEGIN VIDEO CLIP)

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

(END VIDEO CLIP)

KEILAR: Well, House Speaker Nancy Pelosi was asked about her response to Tlaib's choice of words. Here's what she said.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Your reaction to that comment?

REP. NANCY PELOSI (D), HOUSE SPEAKER: 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 the president has -- what the president has said.

(END VIDEO CLIP)

[13:20:07] KEILAR: All right, joining us now is Democratic Congressman Raja Krishnamoorthi of Illinois.

What was your reaction when you heard that, sir?

REP. RAJA KRISHNAMOORTHI (D), ILLINOIS: Well, thanks for having me on.

I disagree with that language. We don't need to use that language with regard to anybody, including the president.

KEILAR: I wonder, when you hear someone using that kind of language, do you worry that it sort of paints your entire caucus with a brush you don't want to be painted with?

KRISHNAMOORTHI: Well, I think that for sure it kind of distracts from the main issues that we have to contend with. One, we have to act as a check and balance on the president. The Mueller investigation is proceeding. As a former prosecutor in Illinois, I know that first you investigate and then you prosecute.

And then the second issue is, you know, the American people hired us to be in the majority to get things done. That means cleaning up the corruption in Washington, lowering health care costs and, you know, trying to put together an infrastructure package that will actually put people to work and modernize our economy.

KEILAR: And I'm sure that people don't pay attention to that when these kinds of words catch so much attention.

KRISHNAMOORTHI: Right. Right.

KEILAR: So I do want to say that the congresswoman, Congresswoman Tlaib, tweeted this after this sort of outrage over her use of the language. She said, I will always speak truth to power, hash tag unapologeticallyme.

And then her office put out a statement. They said this. Congresswoman Tlaib was elected to shake-up Washington, not continue the status quo. Donald Trump is completely unfit to serve as president. The congresswoman absolutely believes he needs to be impeached.

You've exercise caution when it comes to impeachment. In fact, last time that we spoke, you said you're waiting for the special counsel to complete his job to see the extent of the wrongdoing. That's what you told us here on CNN.

What is the red line that Trump would have to cross for you to consider impeachment?

KRISHNAMOORTHI: Well, I think that obviously there are different red lines, but, for instance, firing Robert Mueller, I almost certainly would demand an inquiry on impeachment in the House.

I'm very hopeful that my Senate colleagues, including Republicans, as well as even House Republicans, start to really look closely at the conduct of the government that the president is engaged in and they come to their senses because, you know, we cannot allow anyone to be immune to the law. Not even the president of the United States.

KEILAR: I want to talk to you about the shutdown. Here we are, we're two weeks into this. You have 800,000 federal employees.

KRISHNAMOORTHI: Right.

KEILAR: There's thousands more contract workers. And those are ones who are not going to get back pay here, we should mention.

KRISHNAMOORTHI: Correct. Correct.

KEILAR: What would Democrats be willing to give up to reach a deal with the White House when we hear this no wall and then on the Republican side there is going to be -- or from the White House, there is going to be a wall.

KRISHNAMOORTHI: Well, look, the president has changed his positions on this particular issue so many times, it's really hard to know where he stands. And I think that the speaker and others are meeting with the president now, or they just finished meeting with him, to discuss this.

For me personally, we have to fight illegal immigration and protect our borders. I think that there is a lot of support for enhancing border security. But there's no support for a wall. The majority of Americans not only oppose a wall, but the vast majority of Americans don't want a shutdown because of the wall. And so let's open up government now.

KEILAR: Do you oppose -- do you oppose giving funding for border security, but some of it might be used for a wall and the president would be able to champion that as a win for the wall?

KRISHNAMOORTHI: Well, I think that we would be, at least in my particular case, I'd like to hear what the GAO and Customs and Border Patrol would like to see in terms of physical barriers. But it's got to be fact-based, Brianna. It can't just be based on a campaign slogan, which is the wall. The wall has become a big keep out sign to the rest of the world. And that's not what we want.

KEILAR: Well, they do want -- they do want different kinds of barriers in different places, as we understand it.

KRISHNAMOORTHI: Sure.

KEILAR: And some of that would include fencing, a wall, maybe not in its entirety, but certainly $5 billion isn't going to give the U.S. that anyway.

KRISHNAMOORTHI: Sure.

KEILAR: So it sounds like you're saying that you are open to that?

KRISHNAMOORTHI: We're open to some physical barriers. Certainly there's already fencing on the border. There's 700 miles of fencing on the border. But I just defer to people like Congressman Will Hurd, a Republican, who has 800 miles of this border, who says we can't have a cement wall sea to shining sea, which was what the president tried to convey initially when he talked about a wall. I think he's changed his position on this issue as well, but that we can't have. KEILAR: OK, so one of your colleagues, incoming freshman -- or not

incoming, is a freshman congresswoman now, Alexandria Ocasio-Cortez. She is proposing taxing the wealthy, some of their earnings, as high as 70 percent, to pay for a climate change plan that she's pushing that she calls the Green New Deal.

[13:25:16] So, first off, this -- it seems very unlikely that this would become a reality. We can say that. But this is an important idea that she's putting out there, this concept of a 70 percent tax on some earnings of the wealthiest Americans. What do you think of that idea?

KRISHNAMOORTHI: Well, first of all, I think that she's right to bring up the climate change crisis as a very high priority that we should tackle. And I think that we should have an infrastructure package which is green, sustainable, and that helps the environment.

I want to know what the specific details are behind that package, how much it would cost and then where do we get the different revenue to pay for it?

The one thing we can't (INAUDIBLE) trillion dollars, which is what's happened now.

KEILAR: OK, but this what -- but my question, congressman (INAUDIBLE) to tax not the first earnings of the wealthiest, but as you get above a certain cap, conceptually. Would it be OK to tax that at a rate of 70 percent?

KRISHNAMOORTHI: Well, look, I think that 70 percent is obviously a very high number. We have to look at, what does everything cost and where do revenues come from. It has to be revenue neutral.

KEILAR: But Republicans would call that income redistribution. You know, they look at that and they'll say that is seizing a lot of money. That is a huge increase.

KRISHNAMOORTHI: Well, you know the Trump tax -- well, you know, the recent tax bill from 2017 was redistribution in itself. It hurts middle class people and it helps large corporations. So I don't think that that type of rhetoric is going to get them very far right now with the American people.

KEILAR: All right, Congressman Krishnamoorthi, thank you so much for being with us.

KRISHNAMOORTHI: Thank you, Brianna.

Trolls trying to attack freshman Democrat Alexandria Ocasio-Cortez over a video of her dancing in college. Well, she's now responding with a video of her own today.

And the fascinating moment of a new congress, from the vice president swearing in the Senate's first bisexual member, openly bisexual member, to Republicans groaning when Ocasio-Cortez voted for Speaker Pelosi. We'll have S.E. Cupp joining us to talk about that, next.

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