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Early Start with Rahel Solomon

Trump Eager To Avoid Possible Second Government Shutdown; Border Czar Orders Eventual Drawdown Of ICE In Minnesota; Iran Warns Of Immediate Retaliation To Any U.S. Attack. Aired 5-5:30a ET

Aired January 30, 2026 - 05:00   ET

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

[05:00:18]

RAHEL SOLOMON, CNN ANCHOR: Good morning and welcome to our viewers joining us from the U.S. and all around the world. I'm Rahel Solomon. It is Friday, January 30th, 5:00 a.m. here in New York.

And straight ahead on EARLY START.

(BEGIN VIDEO CLIP)

MANU RAJU, CNN CHIEF CONGRESSIONAL CORRESPONDENT: The Senate is gone for the evening. They were unable to reach an agreement.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I think we're getting close. We don't want to shut down.

ELEX MICHAELSON, CNN CORRESPONDENT: The Trump administration is changing its strategy in Minnesota.

TOM HOMAN, BORDER CZAR: Certain improvements could and should be made. That's exactly what I'm doing here.

TRUMP: We have a lot of very big, very powerful ships sailing to Iran right now, and it would be great if we didn't have to use them.

UNIDENTIFIED FEMALE: President Trump is weighing a major new strike on Iran after preliminary discussions between Washington and Tehran have failed to make progress.

(END VIDEO CLIP)

(MUSIC)

SOLOMON: We're now just hours away from another likely U.S. government shutdown. Lawmakers have yet to agree on a spending bill. Now there are signs of progress.

The top Senate Democrat says that a bipartisan compromise has been reached, but the Republican majority leader said that there are still some, quote, snags that need to be worked out. If and when the bill passes the Senate, it still has to go through the House, and it's unlikely that vote will happen before Monday. If a bill passes early next week, the impact of the shutdown would be likely minimal. Still, though, this would be the second shutdown of President Trump's

second term. Just a few months back, the funding impasse lasted 43 days, which was a record.

(BEGIN VIDEO CLIP)

TRUMP: Hopefully we won't have a shutdown and we're working on that right now. I think we're getting close. The Democrats, I don't believe, want to see it either. So, we'll work in a very bipartisan way. I believe not to have a shutdown. We don't want a shutdown.

(END VIDEO CLIP)

SOLOMON: The president posted on Truth Social that he hopes both sides, quote, will give a very much needed bipartisan yes vote. And during the last shutdown, the sticking point was expiring health care subsidies. This time it's the Trump administrations immigration crackdown. Democrats are demanding changes to ICE enforcement tactics, and they've threatened no funding whatsoever for the Department of Homeland Security unless that agency is stripped from the proposed spending bill.

DHS would instead get several weeks of temporary funding while the two parties debate reforms.

More now from CNN's Manu Raju.

(BEGIN VIDEOTAPE)

MANU RAJU, CNN CHIEF CONGRESSIONAL CORRESPONDENT: The Senate is gone for the evening. They had hoped to have a vote on Thursday night to avert a government shutdown on this massive bill that would fund a vast majority of the federal government, but because of objections that were in the ranks, they were unable to reach an agreement to have a vote in the United States senate.

It requires all 100 senators to actually sign on and bless anything from happening, including having votes on the Senate floor. If anyone objects. Its very time consuming to get overcome those objections, and they were unable to resolve those objections on Thursday night, which is why the Senate Republican leader said, all right, were going to come back on Friday and see if we can resolve these objections then.

But the question is, can they get it done in time to avoid a government shutdown? Eleven fifty-nine p.m. is the deadline to avoid a government shutdown. And there's another complication, the house has been out of session all week, and they still have to approve this bill to keep the government open. And they don't expect them to come back until at least Monday at the moment.

Now remember what this deal is. What initially, the bill that had passed both the House was -- included six bills to fund 75 percent of the federal government or so, including agencies like the Pentagon, State Department, Health and Human Services Department.

But in the aftermath of Alex Pretti's killing in Minneapolis from -- in this fatal shooting involving federal immigration agents, Democrats said we need changes in how ICE is operating and said that they will not agree to funding the Department of Homeland security, which oversees ICE, until their changes to ICE.

Trump, recognizing where the politics are on this issue at this moment, cut a deal and said, okay, we can fund the rest of the federal government. But on the Homeland Security Department, we'll extend it only for two weeks. That would give them time to reach some sort of deal on ICE. Now, Democrats have a whole wide range of ideas on how to deal with ICE, whether it's requiring them to wear body cameras, forcing them to remove their masks, changing how warrants are being issued, changing use of force guidelines, ending roving patrols.

[05:05:00]

The question is going to be, can they get enshrined into the next piece of legislation, which would be the homeland security funding bill? That would have to be passed again in the next two weeks? That's a separate negotiation. At the moment, the current situation is, can they even keep the government open at the end -- by the end of the day on Friday?

A big question about, can they resolve those objections? How quickly can it pass Congress? If there's a shutdown? How long will that shutdown be? All major problems that are once again facing Congress as it returns to session on Friday.

Manu Raju, CNN, Capitol hill.

(END VIDEOTAPE)

SOLOMON: The Trump administration is now changing its strategy in Minnesota. In Minneapolis, Thursday, White House border czar Tom Homan held his first news conference since taking over the immigration operation there. He says that he has ordered authorities to work on a drawdown plan for federal law enforcement in the state. But he also says that key to that drawdown would be increased cooperation between local jail systems and federal immigration authorities.

The Trump administration is considering new guidelines for federal immigration officers in Minnesota. It includes plans to avoid engaging with people that they call agitators, and only focusing on immigrants with convictions or facing criminal charges

(BEGIN VIDEO CLIP)

HOMAN: President Donald Trump and I, along with others in the administration, have recognized that certain improvements could and should be made. That's exactly what I'm doing here. We will conduct targeted enforcement operations, targeted, what we've done for decades.

(END VIDEO CLIP)

SOLOMON: President Trump, though, offered a conflicting statement. He says that his administration is not pulling back at all. (BEGIN VIDEO CLIP)

REPORTER: Will you be pulling back immigration enforcement agents out of Minnesota.

TRUMP: We're going to keep our country safe. We'll do whatever we can to keep our country safe.

REPORTER: So, you're not pulling back?

TRUMP: No, no. Not at all.

(END VIDEO CLIP)

SOLOMON: Meanwhile, Homeland Security Secretary Kristi Noem is defending her statements around the killing of Alex Pretti by federal agents last week. Noem was among the top U.S. officials claiming, without providing evidence, that 37-year-old Alex Pretti was a, quote, domestic terrorist. She accused the ICU nurse of posing a threat to law enforcement when federal agents shot him multiple times. Here's what she told Fox News on Thursday.

(BEGIN VIDEO CLIP)

SEAN HANNITY, FOX NEWS HOST: You know, was that statement premature?

KRISTI NOEM, HOMELAND SECURITY SECRETARY: Well, Sean, I know you realize that that situation was very chaotic and that we were being relayed information from on the ground from CBP agents and officers that were there. We were using the best information we had at the time, seeking to be transparent with the American people and get them what we knew to be true on the ground.

(END VIDEO CLIP)

SOLOMON: Noem under growing scrutiny for her initial statements around the circumstances of Fridays killing and her job performance, Democrats and some Republicans in congress are calling for her to be impeached if President Trump doesn't fire her.

And we're expecting to see protests across the country today in the wake of Fridays killing and the fatal shooting of Renee Good. Organizers are calling for a general strike and national shutdown. They are urging people not to go to work, not show up for school and not spend money at businesses. They're demanding an end to federal immigration operations happening across the U.S.

Now to other major news this morning, sources say that President Trump will nominate Kevin Warsh to become the next chair of the Federal Reserve. That announcement is expected later today. Warsh had served as Fed governor for five years under former President George W. Bush. He met with Donald Trump at the White House on Thursday, according to a person familiar with the matter. But the White House announced nothing is final until we hear it straight from the president.

Fed Chair Jerome Powell's term ends in May. Powell has repeatedly been bashed by the white house for not lowering interest rates as quickly or dramatically as President Trump would like. Let's bring into the conversation now for more analysis.

William Lee, who is the chief economist at Global Economic Advisors, he is with us live this morning from Los Angeles.

Bill, we appreciate you being here. Look beyond what we just said there. Who is Kevin Warsh? How is he viewed within economic circles?

WILLIAM LEE, CHIEF ECONOMIST, GLOBAL ECONOMIC ADVISORS: He is really a fantastic economist. In fact, if he were to be appointed chair, I think he's going to be the most important chair of the Federal Reserve since Paul Volcker, because he really has very strong opinions about what the Central Bank should be doing. And it's not what the Federal Reserve is doing today. He's very convinced that the Fed has overstepped its boundaries. For example, its balance sheet is way larger than it should be.

In fact, he quit the board of governors because he disagreed with Ben Bernanke about expanding the balance sheet even more. What was called QE2 back then. He felt that the Central Bank really should step out of the way of the private sector. And, and I think what you'll find surprising, if he is to be appointed is that even if he were to lower interest rates quickly, he's going to offset that by contracting the balance sheet, which means that the inflationary impact of a very sharp decline in rates can really be offset by contracting the balance sheet.

[05:10:12]

And I think you'll find that kind of maneuver on the part of Kevin Warsh. And that's why I think he's going to be a really significant change in the way the fed does business.

SOLOMON: So, a smaller balance sheet, but perhaps lower rates. How does that impact people at home, Bill?

LEE: Yeah, it's going to help people get their mortgages and small businesses will be able to get their loans at a lower rate. But at the same time, the banks will find it more difficult to lend because the size of the balance sheet that's providing liquidity for banks to do lending is going to be pulled back. So. we have in some sense, two things that can offset one another. And I think day-to-day life will be a lot easier in the sense that the complaints about interest rates being too high can be, can be handled.

But at the same time, the financial markets fear that low rates will spur inflation can also be handled. So, if he's -- if he does this right I think he can actually square that circle and, and come out smelling good on both sides.

SOLOMON: Bill, it's interesting you paint a rosy picture of what he what he might be able to do if he does this. Right. To your point. So then how do you explain the market reaction we've seen overnight? You have S&P futures lower, Dow futures off, Nasdaq futures off. And yields on the ten year and the 30-year higher. What do you -- how do you interpret that. What's happening here.

LEE: A lot of the stock market reaction that were seeing right now is a holdover from what happened with the A.I. fears, that Microsoft is spending so much money on infrastructure that people are worried that they're not going to see any returns from it.

So, a lot of that, that, that, that stock market reaction, I think is over, over that kind of specific situation and not related to monetary policy. As far as interest rates and the dollar is concerned, that is a global problem right now, which is that Japan has really been under the microscope as insofar as whether it can actually have expansionary fiscal policy, given that Japan's debt burden is way larger than the United States. You know, their debt to GDP ratio is more than 200 percent of GDP, as opposed to like 100 percent for the United States.

So, interest rates, are and the dollar are much more influenced by global changes. And the stock market is very specific changes in the A.I. worries out there. But as far as monetary policy is concerned and fear of Fed independence, Kevin Warsh, I think would be a very smart way to square the circle. And really present a new approach to the dilemma that the Fed faces right now.

SOLOMON: Yeah. Speaking of Fed independence, I mean, this has been really remarkable to sort of watch the relationship between the White House and the central bank between Powell and Trump.

Do you believe and is the belief on Wall Street that Kevin Warsh can sort of, I don't know, stand up to President Trump the way we've seen Powell and, you know, Powell sort of does it in his own, in his own way. But do you believe that he will also be seen as a continuation of that Fed independence?

LEE: Well, Kevin Warsh is a man of convictions. You know, he quit his job as a governor because he really disagreed with Ben Bernanke's approach to monetary policy. So, he's not a voice afraid of voicing opinions, but he does it on the inside. And as far as the criticism of Fed independence concern, again, I want to remind the audience that the it's not about taking away independent monetary policy.

What President Trump has been trying to do is to say the Fed mission creep, the Fed bloat has been enormous over the last 20 years. Their budget has quadrupled when, you know, faster than the rise in federal expenditures.

And Kevin Warsh feels the same way that the Fed has really gone way beyond its mandate. And I think you're going to have a meeting of minds in terms of both parties wanting to have administrative accountability of the Fed, but in terms of monetary policy independence and bank supervision, independence, that's going to be left alone.

SOLOMON: Economist Bill Lee in Los Angeles, thank you for being here this morning.

LEE: Thanks for having me. SOLOMON: Still ahead, Iran is vowing to fight back if the U.S.

launches a military strike. We'll tell you what targets are potentially in Tehran's crosshairs, straight ahead.

Plus, people in the U.S. are still dealing with the impact of a bitterly cold, severe winter storm, just as a new storm heads their way. Latest forecast straight ahead.

(COMMERCIAL BREAK)

[05:19:13]

SOLOMON: Welcome back.

The war of words between the U.S. and Iran is heating up, as President Trump demands a nuclear deal and an end to Tehran's crackdown on protests. Iran's top army spokesperson is warning that any attack from the U.S. will be met with an immediate response. He says that targets could include U.S. military bases, aircraft carriers and other naval assets.

President Trump has been threatening military action for weeks after security forces killed thousands of protesters.

Here's his exchange with reporters on Thursday night.

(BEGIN VIDEO CLIP)

REPORTER: Have you had any conversations with Iran in the last few days? And are you planning on any?

TRUMP: I have had and I am planning on it. Yeah. We have a lot of very big, very powerful ships sailing to Iran right now. And it would be great if we didn't have to use them.

REPORTER: Can you say what the message was that you shared with Iranians?

[05:20:01]

TRUMP: Well, I told them two things. Number one, no nuclear. And number two, stop killing protesters. They're killing them by the thousands. You know, I stopped 837 hangings two weeks ago. But they're going to have to do something

(END VIDEO CLIP)

SOLOMON: Diplomats from a number of countries are working to bring down tensions. U.S. and Saudi officials met in Washington this week. And Iran and turkey are meeting today.

The U.S. defense secretary says other plans are in the works if diplomacy fails.

(BEGIN VIDEO CLIP) PETE HEGSETH, DEFENSE SECRETARY: Same thing with Iran right now, ensuring that they have all the options to make a deal. They should not pursue nuclear capabilities. We will be prepared to deliver whatever this president expects of the war department.

(END VIDEO CLIP)

SOLOMON: Okay, let's bring in now. Nada Bashir, live for us this hour in London.

Nada, good morning. Trump said that he's been holding conversations with Iranian leaders. So where do things stand with those conversations?

NADA BASHIR, CNN CORRESPONDENT: Well, nuclear details have been offered by the White House or the Trump administration with regards to the progress of those talks, or even which Iranian officials the U.S. president has been holding those conversations with, as we've heard from the U.S. president, those talks have taken place. And there is a potential expectation for further talks to be held with Iranian officials over the coming days. But again, no clear details or timeline on that front.

What we have been hearing from the U.S. president quite consistently now is that warning of potential U.S. military action if Iranian officials fail to agree to a deal and fail to bring an end to hostilities and killings targeting protesters in Iran. And of course, we have seen the devastating impact of the Iranian regime's violent crackdown on anti-regime protesters. Thousands said to have been killed, according to human rights organizations, thousands more are believed to have been detained. Their fate, of course, unclear, and there is certainly mounting international concern around this. We've heard from the European Union now designating the IRGC, the Islamic Revolutionary Guard corps in Iran, as a terrorist organization.

But we've also been hearing very firm rhetoric from the Iranian regime, both with regards to the E.U.'s decision, but also in particular in response to any warnings being put forward by the United States, by U.S. President Donald Trump around the potential for military action. Now, as you heard there from Trump speaking to reporters, he said he was very clear on two fronts. The first, no nuclear, the second to stop killing protesters.

What we've been hearing from U.S., from Iranian officials, is that any attempt to target Iran, any strike on Iran by the United States, will trigger an immediate and decisive response from the Iranian regime. They have said there will be no hesitation this time, that they will target U.S. assets in the region. This could, of course, include U.S. military assets that have been repositioned in the Middle East for any potential further military action.

We know, according to sources, that the U.S. carrier strike group is now believed to be in the Middle East, positioning itself for any potential moves on that front, but also, of course, U.S. military bases in the region. Just a few weeks ago, we had U.S. military officials in some U.S. bases in the region, including the largest U.S. base, the Al Udeid Air Base in Qatar, being warned potentially to evacuate as a precautionary measure.

So, certainly, concern there around what a retaliatory response from Iran could look like. At this stage, it appears there are hopes diplomacy could achieve some sort of agreement or settlement. And certainly, there are many in the international community pushing for that to be achieved.

SOLOMON: Okay, we'll see what comes of it. Nada Bashir in London. Nada, thank you.

Still ahead for us, millions of people already weary from a deadly weekend storm are bracing for another system that could quickly strengthen into what forecasters are calling a bomb cyclone. We'll be right back.

(COMMERCIAL BREAK)

[05:28:24]

SOLOMON: Welcome back.

The death toll has risen from the severe winter storm that hit the U.S. days ago. At least 85 people have died in states that were affected by the bitter cold from Texas all the way to New Jersey. About half of the deaths were reported in Tennessee, Mississippi and Louisiana. Millions of people who were impacted by last weekend's snow and ICE storm are now bracing for a new, rapidly strengthening storm this weekend.

A low pressure system is expected to form off the coast of the Carolinas late today, and then rapidly intensify into a bomb cyclone that could bring heavy snow, strong winds and coastal flooding.

CNN's Chris Warren is tracking the potential path of the storm.

(BEGIN VIDEOTAPE)

CHRIS WARREN, CNN METEOROLOGIST: This weekend, storm is going to bring some serious snow for some and for others still kind of on the line. So, the track of this weekend's winter storm is going to play a huge role in saying and determining who ends up getting serious snowfall and who may be left out. The western track brings more snow farther inland. Meanwhile, a track farther away from the coast still brings snow to South Carolina, North Carolina and Virginia, but not as much to New Jersey and New York and Connecticut, but still some in far eastern Massachusetts.

Here's what the European forecast model shows us does show even a chance for some snow in Atlanta with that area of low pressure bombing out. Or really strengthening over a short period of time, and the winds are going to be strong. So we're going to see this produce some very strong winds, especially offshore, possibly some coastal flooding and beach erosion. But the snowfall here again, it's just on the edge here.

So, the track is going to make a huge difference here. That's the European.