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U.S. Budget Deficit Hits Nearly $1 Trillion in 2019; Rep. Tony Cardenas (D-CA) Endorses Joe Biden; Newly Released Emails Show President Trump Held Aid to Ukraine Soon after Call with Ukrainian President; House Speaker Nancy Pelosi Holds Articles of Impeachment from Senate During Congressional Break. Aired 8-8:30a ET

Aired December 23, 2019 - 08:00   ET

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

[08:00:00]

ALISYN CAMEROTA, CNN ANCHOR: OK, so we have a lot to talk about. Let's bring in CNN justice correspondent Laura Jarrett, CNN senior global affairs analyst Bianna Golodyrga, and CNN political commentator Joe Lockhart. He was President Clinton's press secretary.

So Joe, just tell me the theory here. Was it that none of these new e-mails had been released, thank goodness because of a Freedom of Information Act, we wouldn't know about these e-mails otherwise, the White House as you knows has stonewalled all sorts of documents. But now we see they happened, 90 minutes after the phone call on July 25th, that the Office of Budget in the White House had to put this freeze on it, what does that mean, that the president didn't like what happened on that phone call, that somehow President Zelensky didn't curry enough favor, that President Trump didn't think the favor was actually going to go through? Why would he do it 90 minutes later?

JOE LOCKHART, CNN POLITICAL COMMENTATOR: The president was making a demand, and the demand was not agreed to on the phone call. So 90 minutes later the president's wishes they had been working towards for some time, this all didn't happen in that 90 minute span, but the button was pushed on hold the aid.

And what this does, it's a big tease, which is we've all known that there was a crime here or there's a scandal here. This gives us a big, big hint to how they did it, who they did it, when they did it, and the mechanism and everyone that was involved. And if you were Democrats looking for a Christmas present and what you wanted was testimony from people who know, Santa came early.

(LAUGHTER)

JOHN AVLON, CNN SENIOR POLITICAL ANALYST: Bianna, the White House is saying that this is not new information. It is literally new information. It seems to show a degree of intent. The question is, will it change any minds among Republicans in the Senate. And if not this, is there anything that you think could change Republicans' minds?

BIANNA GOLODRYGA, CNN SENIOR GLOBAL AFFAIRS ANALYST: It's interesting the White House initially denied that Ukraine was ever denied aid, right, and now they're saying, look, since you realize through testimony of fact witnesses that aid was withheld in July, earlier, and in June, what happened 90 minutes after the call isn't that relevant, and you're sort of cherry-picking what you want to for out of Michael Duffey's e-mail.

That having been said, it does add some credibility at least to the argument Nancy Pelosi wants to make that not only do we need to hear from these fact witnesses, but we also don't know what else could come out, because the White House had withheld this information, it only came out in a Friday night news dump through the FOIA Act. And so while it may not be that Nancy Pelosi can withhold not transmitting the articles of impeachment for much longer, it does give some credibility and understanding as to what can happen if they do continue to withhold it because new information seems to come out on a daily basis. Whether or not that resonates with Republicans, of course, is a key question.

CAMEROTA: Let's read some of the e-mails so our viewers understand what is happening. So on July 25th, 90 minutes after the phone call, Michael Duffey, who is the associate director for national security programs to the deputy secretary of defense, sends this e-mail, quote, "Given the sensitive nature of the request I appreciate you keeping that information closely held to those who need to know to execute direction." So he knew that something was amiss and that people shouldn't talk about it, that he was going to have to execute this order. Then fast forward to September 11th, I guess however, 55 days or whatever it was later, they decide to release it after they know that Congress is investigating.

LAURA JARRETT, CNN JUSTICE REPORTER: The whistleblower has come forward.

CAMEROTA: And the whistleblower has come forward.

AVLON: Should we do a dramatic reading.

CAMEROTA: Yes, we should.

AVLON: I think the time has come for a dramatic reading.

(LAUGHTER)

CAMEROTA: So you're going to be Michael Duffey, and I'm going to be Elaine McCusker, who was the associate director for national security.

AVLON: Here's my best Michael Duffey. OK. "Elaine, I will be issuing the apportionment this evening to immediate release all USIA funds for obligation. I will alert you as soon as I have assigned the apportionment. Thank you."

CAMEROTA: "Copy. What happened? Thanks."

(LAUGHTER)

AVLON: Michael Duffey -- redacted. CAMEROTA: What more do you need to know? The what happened part has

been redacted.

AVLON: That's the part that apparently we can't see.

CAMEROTA: We would like to know.

AVLON: It seems to be the relevant part to this particular exchange.

JARRETT: The question is, who gave him the guidance, and what did they tell him about why it was being withheld? The e-mails also show that I think back in June, the president was asking questions about the aid. Why, because he had seen an article in the "Washington Examiner." Not because his aides had told him there's some issues here with corruption. He saw an article that raised questions. So there's just so much now that is, I think, going to put pressure on people to say we need to hear from Michael Duffey, we need to hear who instructed him and when and what did they say?

LOCKHART: And here's been the simple logic of political communications and damage control. A lot of bad stuff has come out. There's been live witnesses, enough to impeach the president of the United States. If the whole story was out, you would dump it all out, dump it all out on Christmas Eve, and maybe there would be a couple more embarrassing little tidbits here and there, and you'd move on and say you've got what you need.

[08:05:09]

They're doing this because we don't know the half of it. It is much worse than what we already know, which is why they're fighting it in court, using an argument that changes weekly in front of judges, which is why they're holding all this back, and they will use every piece of political muscle they have to not allow witnesses to testify in this, because what we know from this little memo, even with the redactions, is it is way worse than we know now.

CAMEROTA: And what you're talking about in terms of court, this was breaking news this morning, what we found out, that the Department of Justice is actually trying to stop Don McGahn from testifying. We've known that. But they are telling the federal appeals court where this is sitting right now, this court case, that they shouldn't make a decision because otherwise they would be interfering in impeachment. So the one case that Democrats are hoping to hear from Don McGahn and Republicans have been saying, why aren't Democrats going through the court system, the Department of Justice as of last night is trying to kibosh.

GOLODRYGA: There's a word that comes to mind, and that's hypocrisy. And the reason I bring that up is because the argument that you're hearing from Republicans now throughout this process is why are you rushing this? Go to the courts, right. Go to the courts. They are the third branch that can figure this out, and then we can move forward, knowing that the courts will take time. This could go well into the election, right, except for when the courts rule against them or not in their favor. You hear a completely different argument. Once again, the Democrats have an argument to say, OK, you tell us to

go to the courts. Look what happened to Don McGahn, and the same could be what we could expect if, in fact, we do go to court and see if we can hear from other fact witnesses, in particular the president's chief of staff.

AVLON: And this has been part of a delay strategy, Laura. So if they were to lose this filings that they made, which really does make out a completely contradictory case, what's the next step? The Supreme Court?

JARRETT: Well, the court of appeals in D.C. is going to hear this case on January 3rd no matter what. So the question is just do we expedite things even further? And the Justice Department is saying let's pause on that. We're going to hear from the House later today, we'll see what their argument is. Something tells me they're not going to want to press pause on any of this. But if the court hears this in January and comes back with a ruling pretty quickly, sometimes courts move slowly, this could still go to the Supreme Court in the middle of the impeachment proceedings.

CAMEROTA: Joe, how do you have a trial with no witnesses? What's this going to look like? Why doesn't Nancy Pelosi hold the articles indefinitely. If there's a trial with no witnesses, then it's just a rubber stamp, we're done.

LOCKHART: There's no constitutional precedent here. Mitch McConnell will likely try to start the trial without the articles of impeachment if the time is -- she holds them for too long. And that will probably be litigated in court.

AVLON: There's no precedent for this situation.

LOCKHART: There's no precedent for either, and Trump will put a lot of pressure on McConnell and Republicans to get a trial going to see -- because he wants to be vindicated. But you can't -- even in 1998 where every witness went under oath in the grand jury, the president himself, the president gave blood, you had an agreement where three witnesses went on videotape that were played on the floor, Monica Lewinsky, Vernon Jordan and Sidney Blumenthal for reasons I still don't understand, but that's a whole other story.

You can't have a trial. And this is the dilemma for -- when I think about this, I think about Cory Gardner, and I think about trying to win in Colorado and the vice he's in, the proverbial rock and a hard place of we don't want to do all these witnesses which will do damage to the president and could hurt him for being for it, but how do you run a campaign where you say we're going to do a show trial like they do in Saudi Arabia as of today or in Russia or in autocratic places? I don't envy the position they're in.

GOLODRYGA: And look, the president is not thinking of Cory Gardner, he's not thinking of Susan Collins. He's thinking of himself.

LOCKHART: Mitch McConnell is, though. GOLODRYGA: Yes, Mitch McConnell is, which is why Mitch McConnell does

not want to hear from any fact witnesses because if his fact witnesses in fact are going to be testifying, he knows the president is going to want to hear from others as well, and this will be drawn out and it's not going to be beneficial to a lot of Republicans that are in danger of losing their seat.

But I will say that the biggest difference is going back to the fact witnesses, because the one thing we kept hearing from them time and time again was something bad happened, this is not normal, this is unprecedented. The president wants the takeaway to be this was a perfect phone call and we did nothing wrong. And that's where you have a lot of Republicans who are going to vote against impeaching the president really in a tough spot, because how do you square the two? You can't.

AVLON: And Laura, it goes also to the question of what Nancy Pelosi's real leverage is. We're getting word that Mitch McConnell is on FOX right now saying the American people should decide this, i.e., in an election, not through an impeachment process.

[08:10:05]

So this is obviously a real game of negotiation going on. But what leverage does Nancy Pelosi really have?

JARRETT: What does she have to lose right now? We have a Christmas break, and then she can kind of let the game play out a little bit I think for the next few weeks. And it's not at all clear legally that McConnell can actually start this without her. There are legal debates going on right now about whether he's actually been impeached.

AVLON: Noah Feldman.

JARRETT: There is a Harvard law professor who is debating this right now, which seems academic.

GOLODRYGA: The White House is embracing that.

AVLON: The White House is citing Noah Feldman and not Johnathan Turley.

JARRETT: But the leverage I think Pelosi has is that in January we're going to get more FOIA releases. So the very same groups that have actually sued and seen these e-mails from Duffey, more is going to come out very soon.

LOCKHART: But her ultimate leverage is Donald Trump is desperate for a trial, he is desperate to be acquitted, he will claim total exoneration, and he will go on a national tour in everyone's hometown saying I'm innocent. They got nothing on me.

AVLON: So that's the issue?

LOCKHART: That is the leverage.

GOLODRYGA: It will be an interesting state of the union, that's for sure.

AVLON: Yes, to be sure.

CAMEROTA: Thank you all. Great to talk to you. Thank you.

So the U.S. economy remains strong as we close out the year. Obviously, President Trump and his supporters believe that this helps him a lot, but what are the real indicators? We are going to dig into the numbers next.

(COMMERCIAL BREAK)

CAMEROTA: A new CNN national poll shows three out of four Americans rate the economy as good. That is the highest approval number for the economy in nearly 20 years. And two former White House economic advisors to President Trump are crowing about that. They write in a new op-ed in "The Wall Street Journal", quote, "On the second anniversary of the Tax Cuts and Jobs Act, the numbers are in, and our projections have been vindicated," end quote.

But is that true? Joining us now is CNN economics commentator Kevin Hassett. He's the former chairman of the White House Council of Economic Advisors under President Trump. Kevin, great to see you.

KEVIN HASSETT, CNN ECONOMICS COMMENTATOR: Good morning. Happy holidays, Alisyn.

CAMEROTA: Happy holidays to you too. So you see it as just universally good, the economy is firing on all cylinders. And the American public thinks it's going very well. But can we just dive into some of the details.

HASSETT: Of course, sure, yes.

CAMEROTA: Because they present a more complicated issue.

So first, job creation, in the first 33 months of the Trump presidency, some 6.25 million jobs were created. It actually trails the 7.38 million jobs that were created in final 33 months of the Obama final years. So the economy was already chugging ahead. That wasn't something magical that came from tax cuts.

HASSETT: No, there's a difference, because what happened was that President Obama came in in a recession, and so that there's a lot of job growth at the beginning because you're recovering from 11 percent unemployment rate.

[08:15:00]

And so if you go back and look, the Congressional Budget Office thought that we'd create about two million jobs since President Trump took office, and in fact, ever since he was elected, it is about seven million.

And so the point is that we're really exceeding expectation, because once you get to what the economists call full employment, that it's much, much harder to create jobs.

And so there's a five million jobs surprise. And so I think that if you're going to wonder about the economy, and like even take your political hat off, you have to think about well, where did the five million jobs surprise come from?

ALISYN CAMEROTA, CNN ANCHOR: Okay.

HASSETT: And in our view -- Gary and I, our view is that it came because mostly of the tax cuts.

CAMEROTA: Okay, that's interesting. But I mean, in terms of who was the bigger job creator, at the moment, if you use the same metrics, it was President Obama.

But let's move on, because I want to talk about something that Republicans used to talk about all the time. And now no one mentions -- that is the burgeoning deficit.

And so the deficit grew to $984 billion in 2019. The deficit is up nearly 50 percent in the Trump era. I remember when President Trump, well, then Donald Trump didn't think the deficit spending was good. Here's what he wrote on Twitter in 2011, "Our deficit spending is China's gain. President Obama is bankrupting our country."

He said this in 2012, "No member of Congress should be eligible for reelection if our country's budget is not balanced. Deficits not allowed." What happened to that?

HASSETT: Well, you know, if you made the same graph that you just made, and you showed the increase in debt to GDP or the deficit under President Obama and under President Trump, then it would have been much larger under President Obama because of the stimulus and everything else.

CAMEROTA: Now, hold on a second.

HASSETT: But the fact is -- no, that's fair.

CAMEROTA: The deficit is up 50 percent in the Trump era.

HASSETT: The debt to GDP -- debt to GDP about doubled because of all the spending and everything to get us out of the Great Recession. But the fact is that if you look at why the deficit has gone up, it's because of a really, really big increase in spending, which is up like eight percent the last year that we checked.

And so for sure, there's a lot of room to be made up of the deficit. Absolutely. But that's kind of like a Washington thing. You know, Congress does the budget. They send it to the White House. The President signs it and we've -- as economists have been calling -- I've been calling for deficit reduction forever and ever, and it keeps not happening.

It didn't happen under President Obama. It didn't happen under President Bush. It did happen under President Clinton. CAMEROTA: But you think this is Congress's fault. You don't think --

you don't blame President Trump for that.

HASSETT: President Clinton was the last one. You know what? He has not prioritized. He did not prioritize deficit reduction when he came in because he saw that if we pushed really hard on tax cuts right now, while we were close to full employment, that we could help the people that needed the help the most.

And so if you look, it is one of my favorite facts in "The Wall Street Journal" that ran this morning that for the bottom 10 percent of the income distribution, their wages grew seven percent over the last year and people without a high school degree, their wages grew nine percent.

And so what's happening is that the booming economy is spreading to the bottom half of the income distribution and actually, income inequality is declining right now. And that's something that's happening for the first time in a good long time.

And so I think that, you know, again, we should almost not look through a political lens for a minute and try to get our facts straight. If you do, you can see that the economy is doing very well right now and that it is helping people at the bottom in a way that it hasn't for a long time.

CAMEROTA: Sure. I mean, if that's --

HASSETT: And we should think about how we keep that going. And that's like -- that should almost be the way we talk about it between now and the elections, so how do we keep it going?

CAMEROTA: And I know that's how you like to talk about it. But there was a time that Republicans like to talk about the deficit and that time has passed.

HASSETT: No, sure. And I still like to talk about the deficit as an economist, but the deficit reduction is really, it was President Clinton with the Republicans you know, back in the days the last time it happened.

CAMEROTA: No, I see, we've given up on that. I get it. I get it. Okay. Another thing you brought up is that the bailouts that, you know, President Obama relied on. Well, so has President Trump.

The auto industry bailouts under President Bush and Obama were nearly $12 billion. I remember that really upsetting Republicans at the time. President Trump's farm bailout because of the tariffs is more than twice that -- $28 billion.

So if you give people free money, then it does help the economy.

HASSETT: Okay, so it's a little bit different comparing the auto bailout and the agricultural money because the agricultural money was an existing law that was in place when President Trump took office. And so what happened was because President Trump is pursuing a

confrontational trade policy, you know, then, you know, other people responded by going after our farmers. And so then they got the sort of protection that was already in the law when that occurred.

And so I think it's a little bit different than the sort of bailout of the auto industry, which happened, really at the U.S. Treasury.

CAMEROTA: Well, I mean, I'm just talking about the principle of bailouts that you like them or you don't like them.

HASSETT: Yes, I don't like bailouts. That's right. But in this case, you know, there are times when, you know, people get hit by, you know, something, and then they need insurance.

And so what's going on in the farm space is that there's some Federal policies that provides insurance against things like Chinese retaliation against soybeans.

CAMEROTA: Understood. I mean, that was the same rationale used for the previous bailouts.

[08:20:03]

CAMEROTA: But I wanted to do one last thing, and that's GDP. The Commerce Department announced on Friday, GDP is 2.1 percent in the third quarter of 2019.

HASSETT: In the third quarter.

CAMEROTA: Here is what President Trump promised it would be back in 2017.

(BEGIN VIDEO CLIP)

DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: The economy now has hit three percent. Nobody thought would be anywhere close. I think we could go to four or five and maybe even six percent ultimately.

(END VIDEO CLIP)

CAMEROTA: Okay, it has not hit four or five or six percent.

HASSETT: But the three, it did, yes.

CAMEROTA: Fine. But it's at 2.1.

HASSETT: Well, in the third quarter. Fourth quarter is looking better than that right now. But there's definitely a thing that happened this year, which is back last summer, you remember Alisyn, we were talking about maybe we're headed towards recession, and then all of a sudden, everything started to pick up and so all the indicators are heading back towards three percent.

And Gary and I even mentioned that in "The Wall Street Journal" this morning, when we talked about the three factors that we think have slowed the global economy.

And for me, the big thing that's like a takeaway fact is that the U.S. is the only G7 country, the only big major developed country that's growing more than two percent right now.

And so there's kind of a global slowdown related to lots of things like the Brexit and everything else that we need to look at. But you know, for sure the three percent, it didn't happen last year, even with a strong fourth quarter that I see coming.

CAMEROTA: Yes. No, I did think that your point about internationally was interesting in your piece. Your whole piece is interesting.

HASSETT: Thanks so much, Alisyn.

CAMEROTA: Thanks so much for being on. Kevin Hassett, great to talk to you.

HASSETT: Of course, yes.

CAMEROTA: John?

JOHN AVLON, CNN SENIOR POLITICAL ANALYST: Fascinating. Okay, with just a few weeks to go before the first votes in the 2020 election, another leading Democrat has secured a key endorsement in Congress. We're going to give you the details, next.

(COMMERCIAL BREAK)

[08:25:00]

AVLON: We are just 42 days from the Iowa Caucuses countdown and a leading presidential candidate in the Democratic field just notched another congressional endorsement.

Joining me now, California Congressman Tony Cardenas. He is a Democratic Assistant Whip. Congressman Cardenas, thank you for joining us here on NEW DAY. I understand you've got an announcement to make. Who are you endorsing for President and why?

REP. TONY CARDENAS (D-CA): Thank you very much. I'm very proud to say that I'm endorsing Vice President Biden.

And why? The reason why is because he has a lifetime of service. He loves to be in service and he has been doing it wonderfully as a senator, as Vice President of the United States, and he has been doing it for a long time, and he's the most experienced and qualified person to handle our issues, both domestically and internationally.

AVLON: Now, you know, Vice President Biden has racked up more of your colleagues' support than any of the other candidates, but you know, they began back in July. Was there something that you had to see from him during the debates to cause you to finally get off the bench, so to speak and lineup behind him?

CARDENAS: Well, I personally wanted to take a little bit more time because I'm the Chairman of the Hispanic Caucus BOLD PAC, which is the political arm of the Hispanic Members of Congress. And I just wanted to make sure that we had a fair process, and several of the candidates for President have come in and talked to the caucus.

And since we have the caucuses coming up, and the primaries really early next year, I just wanted to wait as long as I could, and here we are.

AVLON: Well, given that very important role, I've got to ask you, do you think Democrats are doing enough to reach out to the Latino community and I want to just reference one CNN survey of California that we put out recently showing that President Trump has the support of 32 percent of non-white Californians? Do you think Democrats are doing enough to connect with this community?

CARDENAS: I think the Democrats are doing quite a bit to reach out to all minority communities and I think that what Donald Trump has done to disrespect people coming from other countries, disrespect American- born Hispanics, whether you're a judge or somebody else, to say disparaging things about you because you happen to be Hispanic, that's the Trump that people have come to know.

And I think that Trump's going to suffer at the polls for that, because he is treating people very viciously and he is treating people in a way that is not American.

AVLON: Still, it appears that a third of your fellow Californians, non-white Californians seem to be open to this message today, despite all of that. I want to get your reaction on some breaking news that we've got new sound of Senator Mitch McConnell voicing what appears to be a shift in his approach to impeachment. Let's take a listen.

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL (R-KY): All I'm asking of Schumer is that we treat Trump the same way we treated Clinton. We had a procedure that was approved 100 to nothing, Schumer voted for it, to go through the opening arguments, to have a written question period and then based upon that, deciding what witnesses to call.

We haven't ruled out witnesses. We've said, let's handle this case just like we did with President Clinton.

(END VIDEO CLIP)

AVLON: What's your reaction to that? Do you hear a shift in his position?

CARDENAS: Well, I hear just a little bit of softening, but what's unfortunate, this McConnell is talking more to Donald Trump's lawyers than he is to his fellow colleague, Schumer.

So the bottom line is hopefully, he will be communicating with his colleague to make sure that they have a fair and open trial in the United States Senate so we can move forward. And another thing as well. People need to enjoy the holidays. The

Senate is not going to come back, it is my understanding until January 7th. So hopefully they'll calm down and have some good conversations and then come out with a fair and open trial when it comes to January.

AVLON: Well, Congressman, you know, Speaker Pelosi raised a lot of eyebrows when she, after the historic impeachment vote said she was going to hold on to those Articles for a time. Were you aware she was going to make that announcement? And what leverage do you think she actually has?

CARDENAS: I think that Pelosi is saying that was a reaction to McConnell's unwillingness to work with Schumer in a very bipartisan way. So the bottom line is, those Articles will be moving over to the Senate.

Like I said, we have a couple of weeks before they come back. So the bottom line is, she is doing her job. She is making sure that she is being methodical and careful, as Nancy Pelosi always is.

AVLON: And were you aware that she was going to make this announcement about withholding them before she announced it publicly?

CARDENAS: I personally wasn't aware. But I started seeing the reports and with McConnell's own words, talking about how he is working with President Trump's lawyers much more closely than he is with his colleague, Schumer.

And I think -- I'm just speculating that she was a bit surprised at that and she has those Articles and those Articles will be turned over in a timely manner. But like I said, the Senate is not due back for a couple of weeks.

AVLON: Congressman, I want to get your take on one other thing, the USMCA historic trade agreement, getting support from both Democrats and Republicans. You voted against. Why?

CARDENAS: Well, one of the main reasons is, it would have been an amazing opportunity for us to set the tone and the pace for the rest of the world when it comes to trade.

[08:30:10]

END