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CNN NEWSROOM

Trade Negotiations with China; Ginsburg Misses Session; Suspect in Houston Court; TSA Screeners Call Out Sick; Farmers Brace for Shutdown Impact. Aired 9:30-10a ET

Aired January 7, 2019 - 09:30   ET

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


[09:30:00] STEPHEN MOORE, CNN SENIOR ECONOMICS ANALYST: Now the -- that the fact that they were hacking into our computer systems now, that they're -- you know, they're stealing $300 billion a year of our technologies without paying for it. I mean there's so many abuses here that have to be fixed.

And I think the main point I would make, and I think this is the point Trump would make, is, if we can get this deal done with China, before that, what is it, 40 days now until that deadline is surpassed, if that happens, it will be extremely bullish for the U.S. economy. And, by the way, it would help China a lot as well. So this is a high stakes game of poker, there's no doubt about it, but we've got to win.

POPPY HARLOW, CNN ANCHOR: It -- it is a high stakes game that the U.S. does have to win. The question becomes, at what cost?

MOORE: Yes.

HARLOW: I mean look at what happened to Apple stock. It got pummeled last week.

MOORE: Yes.

HARLOW: And then the president's own chairman of the Council on Economic Advisers Kevin Hassett essentially told me, Apple's just the beginning. Listen.

(BEGIN VIDEO CLIP)

KEVIN HASSETT, CHAIRMAN, WHITE HOUSE COUNCIL OF ECONOMIC ADVISERS: It's not going to be just Apple. I think that there are a heck of a lot of U.S. companies that have a lot of sales in China that are basically going to be watching their earnings be downgraded next year until, you know, we get a deal with China.

(END VIDEO CLIP)

HARLOW: So he's basically confirming, you know, we're hanging in the balance here are the big multinationals and the big U.S. corporations. There's a danger for them.

MOORE: Yes, they sure are. I mean there's no question about it., Poppy. You're exactly right about that. I mean you've got the two largest economies. There's a lot of commerce between the two nations. We have a lot of -- especially major technology companies in the United States that are very dependent on sales to China.

But think about if we -- if this gets resolved in a positive way. Think about how much more business -- I mean there's a billion Chinese. Think about how much we could sell to China, whether it's blue jeans or soybeans or whether it's our petroleum or our farm products or our technology, if China were to open up its markets to them.

You know, I talk to American business men and women all the time who say, today, under the current conditions, it's so hard to do business in China because they have such a closed market to the United States. So -- you know, look, I agree with your central point, you know, that this is hurting both countries, but we've got -- we can't go forward with the status quo where we're selling -- you know, we're opening up our markets to them and they're selling $500 billion to us but they're only buying $150 billion of our products.

SCIUTTO: Those are fair points. The question is, is the remedy actually solving the problem and the evidence --

HARLOW: Right, right, right.

MOORE: Well, you know, this --

SCIUTTO: The evidence isn't there yet, right? I mean because China -- China's digging its heels in because it's feeling -- you see it from their leaders, they have their own political pressure internally.

HARLOW: Sure.

SCIUTTO: They have a leader who does not like to bow down to the American president. The question is, beating him over the head with a baseball bat, does that actually get you or the administration what the U.S. wants?

MOORE: I'm somewhat optimistic. I'm going to be modestly optimistic that they get a deal done before that 40-day deadline. And the reason is, look, Trump has already hit China with these 10 percent tariffs and they've already got warehouses and docks and their factories are full of merchandise they can't sell. Their economy has slowed down dramatically with the 10 percent tariff. I mean think about what happens -- this is a bit of a game of chicken, right? Think of what happens if they get hit with a 25 percent tariff? I mean it will -- it will grind their economy to a halt.

SCIUTTO: Yes.

MOORE: So it's a bit of mutually assured destruction because both countries will be hit hard.

HARLOW: Well, that's horrible! Well, that's horrible, playing a game of chicken, mutually agreed upon destruction?

MOORE: Well, Poppy -- HARLOW: I mean that is not how the world's two biggest economies should be operating.

MOORE: Poppy I --

HARLOW: Steve --

MOORE: I guess I'd ask the question, Poppy, you know, to economists out there and people like yourself, what is the alternative? Do we move forward with the status quo where we're in an extremely abusive situation?

HARLOW: I just don't -- look, I don't think it's an either/or option.

MOORE: Yes.

HARLOW: I don't think that you have to kick in 25 percent tariffs at the end -- you know, March 1st if this doesn't get done to the president's satisfaction.

But, look, this is not my job, and you're a smart guy who advised the president on economics.

MOORE: No, I get it. I get it.

HARLOW: You have his ear on this.

I have to get you before we go on the national debt, OK?

MOORE: OK.

HARLOW: The national debt is $2 trillion higher today as we sit here than it was when the president took office. He promised -- you remember "The Washington Post" interview, he promised --

SCIUTTO: And did Paul Ryan, right?

HARLOW: Yes. Paul Ryan's no longer working in government. The president is still the president. He promised in "The Washington Post" interview in 2016 he would eliminate the national debt if he were to have eight years in office. Is there any world in which that is possible? And how concerned are you that we're sitting at a $22 trillion national debt now?

MOORE: Yes, it's a gigantic number and this didn't happen overnight. You know, it's happened over the last 50 years where the debt gets bigger and bigger. It debt doubled, you know, that $22 trillion number, it doubled under Obama. And, look, you know, we have -- we don't have a -- look, we don't have --

HARLOW: OK, it doubled -- it doubled under Obama --

SCIUTTO: After the biggest crash since 1929.

HARLOW: Right. Exactly. And that's when you spend money to recover an economy. MOORE: No, no, no, no, no.

HARLOW: You don't spend money like this when you have one of the strongest economies we've seen in a long time. It's just really not apples to apples.

MOORE: No -- yes, it is. I mean, look, Obama doubled the national debt to try to revive the economy and we had the worst recovery from recession since the Great Depression. It's the reason Trump won the election.

[09:35:04] Our view always, Larry Kudlow and I always told Donald Trump, grow the economy. Look, we got 3 percent growth last year, which was the first year we got 3 percent growth in something like 15 years. We never had that under Obama. You've got more people off of welfare, more people working and we've got that blockbuster jobs report. It showed almost 500,000 more people, you know, starting to enter the jobs market. But I'm not -- look, we have an overspending problem. There's no question about it.

SCIUTTO: Yes.

HARLOW: Yes.

MOORE: But on the tax cut, I want to get this point across --

SCIUTTO: All right, well, we've got to deal with the tax cut next time, yes.

MOORE: In 2018, we had more tax revenues than any year in American history. It's not a revenue problem.

HARLOW: But not from corporations.

SCIUTTO: The bottom line -- the bottom line is worse. Even you can't deny that.

Stephen Moore, thank you very much.

HARLOW: Yes, and not from corporations. And the Fed's growth projection is lower now. It's 2.3 percent this year, Steve, not 3 percent.

MOORE: Yes. Well, the Fed is creating the lower growth with their dumb rate hikes.

SCIUTTO: All right.

HARLOW: You're going to come back. We'll have you back.

MOORE: OK.

SCIUTTO: WE do have some news into CNN, and that is that Supreme Court Justice Ruth Bader Ginsburg will not take her seat today when the Supreme Court convenes its first public session of 2019. HARLOW: It's a big deal. She won't be there for the oral arguments.

She can still vote after reading them. But this is, you know, she's recovering from surgery to remove those two cancerous nodes or lesions from her lungs. She has never before, the 85-year-old justice battling cancer, before has never once missed a day on the bench for oral arguments. She will today.

Our Supreme Court reporter Ariane de Vogue is with us.

This is a first for her.

ARIANE DE VOGUE, CNN SUPREME COURT REPORTER: Well, this is a first. Remember, she did survive two other bouts of cancer and during those times she never missed a day of oral argument. She may have missed over her career for recusals, et cetera, but this is a setback. A court spokesperson saying this morning that the court is back from its winter recess this morning. It's going to hear arguments. She won't be on the bench. She will still be able to vote, however. She'll read the transcripts, like the rest of us.

And, keep in mind, that this was really discovered at a very early stage. Back in November she tripped and fell in her chambers behind us. She went to the hospital, diagnosed with fractured ribs. And as they looked at the fractured ribs, they saw these two cancerous nodules. Ended up being cancerous nodules.

At the time, the court spokesman released a statement saying there was no evidence of any remaining disease. Like I said, she survived twice before. She said last summer that she hopes to stay on the court until she's 90. That's five years from now. She's hired clerks, not only for this term but for the next term. But this is a setback, Poppy and Jim, for her as she continues to recuperate.

SCIUTTO: Yes, you might say that's the most watched seat on the Supreme Court these days.

HARLOW: Yes.

SCIUTTO: Ariane De Vogue, thanks very much.

HARLOW: At any moment, the man arrested in the drive-by murder of a seven-year-old girl in Houston will be before a judge this morning. There you see him. As we learn prosecutors have identified a second suspect, a man who is already in jail.

(COMMERCIAL BREAK)

[09:42:14] SCIUTTO: Right now, a suspect arrested in the shooting death of a seven-year-old, Jazmine Barnes, is in a Texas courtroom being formally charged with capital murder.

HARLOW: That's right. Barnes was in a car with her mother and three sisters on December 30th when someone in another vehicle shot her in the head and killed her. After a week-long manhunt, Harris County Sheriff Ed Gonzalez says this most likely was a case of mistaken identity. CNN correspondent Kaylee Hartung joins us from Houston.

So what are they saying now this morning?

KAYLEE HARTUNG, CNN CORRESPONDENT: Well, Eric Black Junior in court this morning. This is a man who has allegedly confessed to being the driver of the vehicle that another man sat in the passenger seat of and opened fire on the car that Jazmine Barnes and her family were in together last Sunday morning.

And what we're learning here is that this is believed to be a case of mistaken identity. That these two men believed someone else to be on that car -- in that car when they started firing.

Now, Eric Black is the one in court today, as we mentioned, being charged with capital murder, and he is the only one who has been arrested and charged in connection with this murder. But we're learning that a second man by the name of Larry Woodruff, as identified by "The Houston Chronicle" and others, is also in custody. This man was pulled over in a traffic stop the day before yesterday, brought in on a possession of marijuana and other controlled substances. That is the charge he is being held on. But during his probable cause hearing yesterday, the state made the case for his bond to be higher than the typical $5,000 it would be for that charge saying that he is a suspect in a homicide and murder investigation.

Poppy and Jim.

SCIUTTO: Kaylee, I mean this poor family here, they've lost their seven-year-old daughter. And there's been this back and forth, this discrepancy even in the description of the shooter.

HARLOW: Yes.

SCIUTTO: How is the family reacting to these arrests now?

HARTUNG: The family is saying they are very grateful that these arrests have been made after the Harris County Sheriff Department they vowed they wouldn't rest until justice was brought for Jazmine. But also there is this element of surprise. You know, Jazmine Barnes' mother and her sisters very descriptive in who they believe this gunman to be. We've seen that composite sketch disseminated so widely. A white male in his 30s or 40s who was driving a red pickup truck. But this came in by way of a tip.

We got here because investigators learned that Eric Black Junior and Larry were involved in this. And then Eric Black confessed. And so here you have a scenario where, imagine the chaos of that moment, these children and their mother in a car as they're attacked, that red pickup truck very well could have been the last thing that they saw. But there were two men in another car who were allegedly responsible.

[09:45:00] Poppy and Jim.

HARLOW: Yes.

SCIUTTO: Goodness.

Kaylee Hartung, thanks very much for following this story.

Is the federal shutdown making air travel for you and me less secure? The world's largest pilots union says it is. And it could get worse if TSA workers keep calling out sick as well.

(COMMERCIAL BREAK)

HARLOW: Welcome back.

So the world's largest pilots union is calling on President Trump to end the shutdown. They say it's affecting the safety of air travel in the U.S.

SCIUTTO: That leak (ph) comes as hundreds of TSA screeners call out sick at several major airports. One federal official calls it the blue flu, because of the blue TSA uniforms they wear.

[09:50:03] Joining us now from Reagan National Airport, CNN government regulation correspondent Rene Marsh.

So, Rene, you were the first to break this story on Friday. I'm curious about the numbers here. How many folks are calling in sick and does the TSA have the ability to plug those holes in effect so everybody's getting screened who needs to be screened?

RENE MARSH, CNN GOVERNMENT REGULATION CORRESPONDENT: Right. So, Jim, we spoke with two senior TSA officials as well as three TSA union reps and they tell us that they're talking about when you look at major airports, at least four major airports, hundreds of TSA officers have called out sick since this government shutdown began. And they're concerned, they're telling me, is that this just means that air travel could be less secure because, they say, obviously they're doing less with more as these call-ins or call-outs begin to stack up. And that is the concern, that they will continue to stack up as this shutdown drags on. As we know, there is no indication of any end in sight.

Now, we did speak to TSA. They told us in a statement that these call- ins started happening around the holiday and that they have increased. But what TSA is saying at this point is that the call -- the sick calls aren't that significant to the point where it's impacting safety, security or wait times at airports. But with all of the TSA officers I'm speaking to, they're saying just wait. This week they say will be critical because, as you know, Friday will be the first day that they miss their paychecks. And many of these officers are saying they're calling out for very practical reasons. They need cash. So they are trying to get to these cash-paying jobs outside of government while the government is shutdown.

Take a listen to this TSA officer's personal situation.

(BEGIN VIDEO CLIP)

BRIAN TURNER, TSA OFFICER WORKING WITHOUT PAY: I live about a half hour from work. And it's going to come to a point where you say, do I put gas in my car or do I feed my family?

You feel hopeless. And you feel helpless. You know, I'm not in Washington. I don't have the influence that these people of power have. And we -- we rely on them. We elect them to these positions to get a job done.

(END VIDEO CLIP)

MARSH: And as you mentioned, it's not just the officers but the largest pilots union also calling for this shutdown to end because of concerns over security. Let's see if lawmakers on Capitol Hill and the president will listen to these folks.

Back to you guys.

SCIUTTO: And, listen, the state a fact, we know that terror groups are still targeting U.S. commercial aviation.

HARLOW: True.

SCIUTTO: It's a real concern.

HARLOW: It is.

SCIUTTO: Rene Marsh, thanks very much.

It is not just federal workers being impacted by this shutdown.

HARLOW: Right. Farmers who already have been taking a hit because of the trade war with China are now taking another hit because of the government shutdown.

Our Vanessa Yurkevich joins us live this morning from Polo, Illinois.

This is really, Vanessa, a one-two punch for these farmers.

VANESSA YURKEVICH, CNN POLITICS CORRESPONDENT: Definitely, Jim and Poppy. This shutdown is really not coming at a good time. After a really tough 2018 for farmers and ranchers, the shutdown is very much unwanted at this point.

So let's talk about what that trade war means for the farmers here.

We're on Brian Duncan's farm here in northwest Illinois. And his biggest buyer of soybeans is China. And they aren't buying any. And his biggest buyer of pork is Mexico. And they're not buying that much anymore.

So when you add the shutdown to this, Brian really relies on government subsidies to help make up that revenue difference that he's not getting from Mexico and China. So he's waiting to file his application because he was waiting for his corn harvest to finish and his application is sitting on his desk in his office. So he's not able to get that money and he's not able to get that check.

But let's just put it into perspective of where we are. We're in a very conservative area. A lot of Trump supporters and a lot of Trump voters. So I asked Brian whether or not this shutdown and these tariffs are playing at all into how he might be voting and how others might be voting, even come 2020. Take a listen to what he had to say.

(BEGIN VIDEO CLIP)

BRIAN DUNCAN, VICE PRESIDENT, ILLINOIS FARM BUREAU: I do think the president is in danger of losing a significant part of his base if the economic woes continue out here. If there is no resolve to these trade disputes. My fear is that what we'll be watching in 2020 is, are we bleeding for territory we already had? We're shedding significant economic blood out here.

(END VIDEO CLIP)

YURKEVICH: We spoke to a couple of other farmers in the area at a local diner and we asked them whether or not they are still supporting the president amongst all of this chaos with the shutdown and the trade war and they said that they are. But when I asked them about 2020, Jim and Poppy, they said that they would have to wait and see. I think they're going to be looking at their bank accounts, they're going to be looking at how their businesses are doing, Jim and Poppy.

SCIUTTO: Yes.

[09:55:04] YURKEVICH: But as we know, 2020 is a couple of years away, so they'll have a little bit of time to think about it before they go ahead and cast their ballot.

HARLOW: Yes.

SCIUTTO: Yes. It was quite a statement there, are we losing territory we already had.

HARLOW: Right?

SCIUTTO: Yes.

HARLOW: Yes, that's fascinating.

Vanessa, great reporting, thank you so much.

So, it could be an unprecedented move by President Trump to declare a national emergency and use military funds to pay for the wall. If he does it, does he have the law on his side?

(COMMERCIAL BREAK)

HARLOW: Top of the hour. Good morning, everyone, I'm Poppy Harlow.

SCIUTTO: And I'm Jim Sciutto.

[09:59:45] A new work week is underway with no indication that hundreds of thousands of federal employees will be back to work themselves any time soon. Seventeen days into a partial government shutdown, now the second longest government shutdown on record. President Trump is threatening to fund his border wall by declaring a national emergency if Democrats and some Republicans won't budge on funding. They're not budging yet.