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Trump Threatens to Close Southern Border Entirely; Kirstjen Nielsen Heads to Border After Second Migrant Child Dies; Search Intensifies for Man Accused of Killing Police Officer; All Eyes on Markets After a Week of Historic Highs, Lows. Aired 10-10:30a ET

Aired December 28, 2018 - 10:00   ET

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

[10:00:00] JIM SCIUTTO, CNN ANCHOR: His dash cam caught the moment. He swerves seconds before the train barrel by. At least two other drivers were almost hit as well. Warning lights did not start flashing until after the train had arrived at the cross. The incident is being blamed on an electrical problem with the crossing gate.

Good morning. I'm Jim Sciutto. On the seventh day of a funding impasse affecting one fourth of your government, President Trump has made a new threat. Several new threats, actually, coming. The chief among them, I quote here, either we will build, in parenthesis, finish the wall or we close the border. Technically, Congress will be in session again on Monday, but no more votes are planned until the new Congress opens next Thursday. Not that there are any deals to vote on nor any real negotiations ongoing.

This morning the acting White House chief of staff declared, quote, "discussions have broken down."

Want to go to CNN's Boris Sanchez, he's at the White House. Boris, apart from the president's threats, we're also hearing a new attempt to shift blame to the presumptive new speaker of the House.

BORIS SANCHEZ, CNN WHITE HOUSE CORRESPONDENT: Yes, that's right, Jim. This morning, the incoming acting chief of staff, Mick Mulvaney, said that he had a gut feeling that Senate minority leader Chuck Schumer wanted to strike a deal with Republicans over the government shutdown, but he believes that it's Nancy Pelosi, the house minority leader, the likely future speaker of the House, who is holding things back because he believes that she doesn't have the votes to become speaker.

Effectively here the White House is at a standstill in discussions with Democrats over border wall funding. Mulvaney confirmed some reporting that the White House had made an offer to Democrats that included less than the $5 billion that the president demanded for his wall. Mulvaney would not give a specific figure, but that lines up with what CNN reported over the last few days, that an offer was made by Republicans, somewhere in the range of $2.5 billion reportedly.

Democrats apparently not taking that seriously. Mulvaney said that Democrats said we're leaving and ultimately left town for the holiday. Not much action, as you noted, on Capitol Hill yesterday. Lawmakers essentially gaveled in and then gaveled right out. The one Democrat tried to bring up a bill on the house -- on the floor of the house I should that was passed in the Senate to stop gap measure. That did not work out.

Ultimately, Democrats are waiting until January 3rd to move on with Nancy Pelosi as speaker. They have promised to pass one of three potential measures here. None of them include any funding over the president's desired border wall -- Jim.

SCIUTTO: Boris Sanchez, at the White House, thanks very much.

This morning we're learning new information about the condition of one of the two migrant children who died in U.S. custody. Those tragic deaths prompting Department of Homeland Security Secretary Kirstjen Nielsen to visit border patrol stations in El Paso today, although no press allowed to join her.

Joining me now is CNN correspondent Nick Valencia. He's been following this story.

So what do we know about what led to the death of this 8-year-old, Felipe Gomez Alonzo?

NICK VALENCIA, CNN NATIONAL CORRESPONDENT: Yes, good morning, Jim. This new information being released to us by the New Mexico Office of the Medical Examiner. And it comes after they conducted nasal and lung swab tests which concluded that Felipe Gomez Alonzo tested positive for Influenza B. Now this office of the medical examiner did stress that the official cause of death will need to be determined by further evaluation.

Gomez Alonzo died on Christmas eve, and the 8-year-old's death brought renewed scrutiny and attention on the medical care given to migrants after they're taken into U.S. custody. It's something that Sarah Huckabee Sanders spoke about this morning.

(BEGIN VIDEO CLIP)

SARAH SANDERS, WHITE HOUSE PRESS SECRETARY: We are doing everything in our capacity to make sure that when people do come that they're taken care of so that we don't have these type of instances. In many cases they show up extremely dehydrated without food and they're seeing the doctor for the very -- a doctor for the very first time in their lives, both adults and children.

(END VIDEO CLIP)

VALENCIA: Gomez Alonzo, of course, is the second migrant child to die in U.S. custody this month -- Jim.

SCIUTTO: That is called shifting the blame, I believe. So Secretary Nielsen, she's coming down to the border. Closed press. No press with her. What is she hoping to accomplish there?

VALENCIA: Well, we haven't been given many details about her trip, and as you noted, it is closed to the press. What we do know, though, is that Nielsen will be here in the El Paso area on Friday. She's going to shift to Arizona, in the Yuma area on Saturday and she's going to be visiting Border Patrol stations to check on the conditions as well as see these medical screenings.

Now if you remember, it was earlier this week that she announced a series of protective measures for migrants. Secondary medical screenings particularly focusing on children under the age of 10. Hoping, and the Trump administration hopes that these screenings among other measures will keep something like this from happening again -- Jim.

SCIUTTO: Nick Valencia, thanks very much.

Joining me now, White House correspondent for "The New York Times," Michael Shear, and Washington bureau chief for the "Chicago Sun- Times," Lynn Sweet.

Lynn Sweet, just first about this Nielsen visit at the border because I think it's worth highlighting going without press. Very different from when Nielsen went down to the border when U.S. troops were there close to election time. Interestingly. Now it's quiet after the deaths of two migrant children. Is that by accident?

LYNN SWEET, WASHINGTON BUREAU CHIEF, "CHICAGO SUN-TIMES": No, it's not by accident because now it's a controversy. Now there are things that she may see that will show the conditions are not what you would think the United States would offer migrant children. No matter how they got here.

Visiting the troops is actually so easy and it's such an easy photo op, and what could go wrong?

SCIUTTO: Yes.

SWEET: In something like that, and the troops come with their own provisions, housing, you know, everything is set up. This is tough for her. And the concern for children that Sarah Sanders and Secretary Nielsen showed, I don't doubt that it is genuine, but let's see what this concern does then to improve conditions for children coming to the United States no matter how they got here.

SCIUTTO: Or, frankly, change the policy, right? Because the evidence here, and we have been speaking to loads of folks is that you have hundreds of people dropped off in towns like El Paso without really the capacity to take care of them. Of course, you also have the issue of what you do with these folks when they come here, which you would hope would require an adult conversation in Congress and some sort of comprehensive deal to deal with this problem. But there's really no sign of that.

MICHAEL SHEAR, CNN POLITICAL ANALYST: Right, there's no sign of that. The kind of efforts to reach some sort of a deal that might have encompassed some of these issues really fell apart earlier this year. I mean, I think one of the things that these tragic deaths and the reaction to it from the administration now underscores back in the summer when the family separation policy first exploded into view, after that, the inspector general at DHS did an evaluation of what had happened. And one of the striking conclusions that they came to was that the

government was completely unprepared to deal with all of the sort of consequential issues that followed from bringing children across the border. So -- and they didn't specifically at the time look at medical care for the children, but it should come as no surprise given the extent to which that all different parts of the government, from HHS to the Border Patrol to DHS, they just weren't ready for it. And this is what you get when you make consequential policy decisions without being prepared.

SCIUTTO: And they were in U.S. custody, after all. Both sides here, Democrats on the Hill and the president, seem to believe they've got the politics right on this and they're digging their heels in. And there's evidence in the polling frankly that a minority of people who support funding the president's border wall. But this is clearly a base play by the president.

Is the conventional wisdom right, that the president is outgunned here on the issue of the wall?

SWEET: I think you don't want to hear yes and no. I mean, just in the last two hours he's done four tweets where he's threatening to close the southern border and cut off aid to Guatemala and El Salvador and Honduras where he says another caravan is going.

So two things could happen or more at the same time. Congress could maybe carve out something to -- some fund or something is needed, that's an easy vote. People could show out we're starting out bipartisan, if there's some emergency funding to help on the border, to show that they're not leaving children in terrible medical conditions.

And yes, it's a base play for both. And yes, I can't predict how this will unfold, but the president has yet to get his head around the reality of governing with a Democratic House majority.

SCIUTTO: "Washington Post" editorial writing today the following. "Democrats should let him have funding for the wall in return for a permanent fix to the immigration status of the so-called Dreamers. This would be a grand bargain that would give both sides something to brag about and in fact simply calls on them to do a version of a deal that both Democrats and Republicans have at least tentatively embraced in the past."

Is that the way out. Michael?

SHEAR: I mean, it could be, but the problem is, look, I talked to a former administration official, a former Trump official yesterday, who described some of the negotiations earlier in the year over just this kind of deal and the president was in fact onboard, at least for a time, with the idea of doing some sort of trade, which would have gotten him a lot more money for the border wall in exchange for some of these protections. But --

SCIUTTO: $25 billion. A heck of a lot more. SHEAR: Right. But the problem was that there are hard liners around

the president who don't want to settle for just in, quotes, "the DACA population," the Dreamers, the so-called Dreamers. They want all sorts of hard line immigration policies changed. What President Trump calls chain migration ended, that kind of thing, and the deal fell apart, ultimately, because the president wouldn't accept just a more limited deal for the money for the Dreamers.

And so, you know, the question of whether enough time has gone by and that dynamic has changed, it doesn't -- it's not clear to me that it has.

[10:10:03] SCIUTTO: Lynn, does the president want a deal or does he want the battle?

SWEET: He wants to have some wall that he could go cut the ribbon on before the State of the Union speech at the end of January. So because he has -- he negotiates on sand, he will decide where -- when he's a winner or not since he kind of calls his own balls and strikes.

SCIUTTO: Yes.

SWEET: So I think actually that's where you could take heart that there is a deal because he shifts where he wants his goalposts all the time.

SCIUTTO: He'll just redefine victory, you're saying.

SWEET: Yes. Yes. Actually yes, because deals have been put on -- as much as -- the wall has become an ugly symbol to Democrats. But parts of it have existing fencing, barrier, whatever you want to call it. Democrats have always in negotiations been willing to spend some money on more security, including some physical elements. But they -- right now, Trump is not offering them anything in return.

SCIUTTO: Lynn, Michael, thanks very much. Happy holidays to you.

Still to come this hour, a massive storm blamed for two deaths now as well as flooding in the south. Now could it get - make getting home for the holidays more difficult for millions of travelers?

Plus, police in California are hunting for a suspect accused of killing a fellow officer. Why this crime is attracting the attention of the president.

The Dow is up right now after a historic week of highs and lows. Could this Wall Street rollercoaster be the new norm? Seems like it. We'll discuss.

(COMMERCIAL BREAK)

[10:15:51] SCIUTTO: Right now, millions are bracing for a massive storm that has killed two people already. It's now going to hit the East Coast. This same storm hit the Midwest and hard. One person died when blizzard conditions wreaked havoc on roadways in Kansas in the south. Heavy rain triggering flash flooding. A falling tree killed a woman in Louisiana.

Meteorologist Jennifer Gray tracking the latest.

Good morning, Jennifer. Is it dissipating as it heads east?

JENNIFER GRAY, AMS METEOROLOGIST: It is. But it's going to take a while for the roads to clear across the Midwest. Temperatures are still very, very cold. It's also very windy there. So basically, just miserable conditions. So a lot of the roads still very snowy. Really, the severe part of the storm is what's gained all of the attention because of not only the severe weather but the flooding with it. And all of this rain is pushing to the east. It is impacting the big cities. All of these heavy downpours pushing through D.C., Philly, New York, Boston, even getting on the rain as well.

We're also looking at strong to severe storms across the deep south. We had a lot of cloud to ground lightning and rain through places like New Orleans, Birmingham, it's all pushing to the east. Atlanta getting all of the rain now. So this is really going to slow down the airports as well for people trying to travel home from the holidays.

Also, look at this rainfall total. Ten or more inches of rain across portions of southern Mississippi. This was in a very short period of time. So we saw some major flash flooding there. Also four to six inches across this entire area from Birmingham all the way down to Baton Rouge. So not only will air travel be slow, but people traveling by car will see the trouble as well.

Fifty million people under this flood threat that stretches all the way from south Louisiana into the northeast. New York City included in that. So here are the airport delays. Could see two-hour delays, Jim, in New York City alone. Of course, it's going to have a trickle effect across the rest of the country.

SCIUTTO: Goodness. Some tough travel days.

Jennifer Gray, thanks very much.

GRAY: You bet.

SCIUTTO: The brilliant blue light seen over the New York City skyline last night, the cause, a faulty transformer, it turns out, which created what's called an electrical arc. That's according to the utility provider there, Con Edison. Last night some speculated the eerie glow caused maybe by an explosion, there was talk of an alien invasion. Con Edison says there was no explosion, on the New York Fire Department says there was alien invasion. Thankfully there were no injuries.

Parts of LaGuardia Airport, though, were shut down for about an hour because of that outage. You can only imagine the headaches that followed as a result.

Manhunt underway right now for the gunman who killed a officer near San Jose, California. The local sheriff is not naming the killer but did say that he was in this country illegally. And that last bit of information of course attracted President Trump's attention.

CNN's Sara Sidner joins us now. Sara, what are we learning now about this crime and the suspect?

SARA SIDNER, CNN NATIONAL CORRESPONDENT: So we know about the victim. We know the most information about the victim where Neill was saying. He was a person who came to this country legally. He is an immigrant himself or was an immigrant himself, but came from Fiji. His family obviously like any family would be devastated to come to find out that on Christmas Day, he was working overtime, according to the department. He went out and then on Wednesday morning at 1:00 in the morning, he ended up in a shootout with a suspect who he had pulled over for suspected drunk driving.

That suspect now, we have a picture of, but we still do not know the name of the suspect. But authorities have that he is in the country illegally. And so you have this juxtaposition of two people trying to immigrate to this country. One of whom did it through legal means. The other who did not. One of them an officer, becoming a police officer and living out his dream. The other who has taken the life of the police officer.

We should also mention, there was an extremely emotional reaction to this that you don't often see, even when other officers are killed, from his police chief and from his department. Listen to what his police chief said about the Officer Singh.

(BEGIN VIDEO CLIP)

CHIEF RANDY RICHARDSON, NEWMAN, CALIFORNIA POLICE: I did not know Christmas morning at 4:00 in the morning when I said good-bye to him and sent him off to his family that it would be the last time that I saw him.

Please remember the man. Please remember the husband. Please remember what he was. What he came to this country to do. Yes, he was a police officer but more importantly he was a human being.

(END VIDEO CLIP)

SIDNER: And that is coming from the Newman police chief there. A small department obviously devastated by the loss of one of its officers. But we should also mention, as you did, that this is happening at a very politically heightened time where immigration is the number one thing that people are talking about in Washington.

The president tweeting out, talking about the fact that there's a manhunt and then bringing in his idea for the wall, saying basically that this would stop this sort of thing. And of course, this is going to play out, I'm sure, more and more as the days go on -- Jim.

SCIUTTO: Not surprising. President often does that.

Sara Sidner, thanks very much.

Market volatility in full display this holiday week. Stocks unsettled going into the final week of 2018. They were up earlier, then they were down, and now they're up again. What does this all mean for you at home? That's next.

(COMMERCIAL BREAK)

[10:26:04] SCIUTTO: Some investors are hopeful for a third straight day of big gains. They may need to get ready for another rollercoaster ride on Wall Street. We watched the market go up and down. It's down again by just a little bit. It comes after two days of big gains including a record-breaking day on Wednesday, the day after Christmas.

Sources tell CNN that President Trump is encouraged by the recent uptick. We know he uses the Dow as a barometer for his own political standing, although he's a lot more quiet about it when the market is going down.

Let's bring in CNN business editor at large, Richard Quest.

First, big picture, Richard. What is happening here? I mean, is this a bull market that's becoming long in the tooth? Looking for a reason to go down and all the bad news we're seeing?

You're a smart guy. You followed the markets for some time. What's your best assessment?

RICHARD QUEST, CNN BUSINESS EDITOR AT LARGE: Whether or not the bull market is dead is an academic question that we can look at in hindsight. We need to look at the reality of what we're seeing in the market. And that is a market that is deeply uncertain about the way forward which means, for example, you've got a trade dispute.

You've got a government shutdown. You've got a slowdown in the U.S. economy and then even bigger slowdown in the European economies that may even turn into a recession. And if all that wasn't enough, you have tax cuts which are seemingly not having the same effect this year as, of course, they did last year.

In this scenario, Jim, you've got to ask yourself, 10 years of running fast and hard, it's not surprising that this bull is resting. Some would say it's unconscious, and some would say the time is over. I think it's a moot point one way or the other.

The market, Jim, it's down 18 percent. It's well off its highs. And it's unlikely to rally considerably in a sustained fashion because of these downwinds.

SCIUTTO: Let me ask you this because a lot of those factors you mentioned.

QUEST: Yes.

SCIUTTO: The trade war, the shutdown, are directly the result of this president's decisions. Is the president, in your view, and you speak to a lot of folks on the market, a lot of big investors, I imagine, is the president making it worse? QUEST: Yes, what you're politely asking me is how culpable is the

president for what's happening. And if culpability there be, it is for creating this environment of uncertainty. Markets want to know what's going to happen next. Now if you tell them that the U.S. largest trading partner, China, and we have no idea about future tariffs and the prospect of government corporate earnings is weaker because of it, and then at the same time, you talk about tax cuts and you talk about an economy that was overheating and a Fed that's raising interest rates, and crucially, Jim, crucially, a president that has broken with tradition and is berating publicly the independent Fed chief.

SCIUTTO: Yes.

QUEST: Now, in these scenarios, it's not surprising that this market (INAUDIBLE), and Jim, look at the chart on the screen, Jim. Just look at it. Come on. That looks like a patient in a hospital that's having a very bad day on a heart monitor.

(LAUGHTER)

SCIUTTO: I hear you. It's not a comforting heart monitor to watch.

Richard Quest, thanks very much. Wish you a very happy new year.

QUEST: And to you, sir. And to you.

SCIUTTO: The Trump administration believes that an American journalist who disappeared in Syria six years ago, Austin Tice, is alive. We're going to speak with his parents who are doing everything they can, as you would imagine, to bring him home.

(COMMERCIAL BREAK)