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Workers without Paychecks Today; Shutdown Standoff Continues; Diverting Funding to Pay for Wall. Aired 12-12:30p ET

Aired January 11, 2019 - 12:00   ET

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

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[12:00:18] JOHN KING, CNN ANCHOR: Welcome to INSIDE POLITICS. I'm John King. Thank you for sharing your day with us.

The partial government shutdown is about to become the longest on record. This as tens of thousands of federal workers mark a payday without pay and feel the pinch of being pawns in a political standoff.

Plus, House Democrats schedule their first big witness, longtime Trump fixer Michael Cohen says the president broke campaign laws and lied about his Russia business dealings. The president says Cohen's a liar.

And, help still wanted. Ten days shy of the two-year mark, new numbers show a stunning number of senior Trump administration jobs are vacant. Record-breaking chaos and turnover in a White House we were promised would be exceptional.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: We're going to make America great again. We're going to use our best people.

We're going to get the best people.

We're going to deliver. We're going to get the best people in the world.

We don't want people that are b level, c level, d level. We have to get our absolute best.

We're going to use our smartest and our best. We're not using political hacks anymore.

It's a sophisticated chess match, but I have the best people lined up.

You need people that are truly, truly capable.

We have to get the best people.

(END VIDEO CLIP)

KING: Back to those numbers in a moment.

But we begin with the politics and the pain of a now 21-day-old government shutdown. Today, negotiations are nowhere. The president and the Democratic House speaker, Nancy Pelosi, both publically say they will win the border wall fight. The other, they say, will fold first.

Last hour on Twitter, the president again calling the border situation a humanitarian crisis and saying without his wall, quote, our country cannot be safe. The president still weighing whether to declare a national emergency, perhaps the only way out of this stalemate.

While the country waits on Washington, payday brings fresh pain across the country. In every state, all 50 of them, federal workers today seeing zeros in their bank accounts, where there would normally be a paycheck courtesy of their employer, the United States government. Federal paystubs read, you see it right there, zero dollars and zero cents.

Furloughed federal workers that live paycheck to paycheck say they're facing new financial stress, and, in some cases, financial peril. Federal workers and contractors hawking their things online, in some cases, to make ends meet. I need to pay bills, buy my stuff, one wrote.

The Coast Guard sending a top sheet on how to avoid a shutdown brought bankruptcy. Some describe a mountain of expenses coming due that will now go unpaid.

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CARL HOUTMAN, FURLOUGHED FEDERAL WORKER: The year-end bills kind of come all at once. I mean our property tax bill. I have two kids in college, and so, you know, there's about $10,000 worth of college expenses that are coming due. There's a car payment -- like a car insurance payment coming up. And so, you know, I can fairly quickly do the math and come up with about $15,000 worth of expenses right now.

(END VIDEO CLIP)

KING: CNN business reporter Vanessa Yurkevich is in Brooklyn.

Vanessa, you're in an unemployment office today where you're seeing federal workers, many more than usual.

VANESSA YURKEVICH, CNN BUSINESS CORRESPONDENT: That's right, John. On a day when federal workers were expecting a paycheck, they're now having to file for unemployment. The Department of Labor is saying the in the last week of December, that was the first week of the shutdown, 5,000 federal employees applied for unemployment. And that is significant because the week before it was around 900. That's a 400 percent increase.

So who is eligible for unemployment? It's federal contractors and it's furloughed workers. Those are individuals who are not on the job and not working. However, people that are on the job and not getting paid are not eligible for unemployment.

We spoke to one woman who was incredibly frustrated by this and said she would love to be collecting unemployment. Here's what she said about how she's doing and how her colleagues are doing as well.

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JUNE BENCEBI, TREASURER, AFGE LOCAL 2008=5: I already have members who have told me that they are -- they've been feeding their children for dinner peanut butter and jelly sandwiches because they don't have the money to pay for food to get them dinner. And so once Saturday, Sunday, Monday hits, I believe that more people will be unable to come to work because they don't have the money. A majority of our staff live paycheck to paycheck.

(END VIDEO CLIP)

YURKEVICH: And that is what we're hearing from local labor unions who represent a lot of federal workers, that they're going to be expecting an uptick in members, in federal employees who are going to be filing for unemployment. The Department of Labor also hasn't released its unemployment numbers for federal workers from last week, John, and they're expecting that number to rise again.

[12:05:08] KING: The personal tolls as we watch this play out.

Vanessa, appreciate the live reporting there.

With me in studio to share their reporting and their insights, Seung Min Kim with "The Washington Post," Eliana Johnson with "Politico," Olivier Knox with Sirius XM, and Molly Ball with "Time."

When you see the personal stories, and today is when it comes into most focus in the sense that it's supposed to be payday and you get those zeros, the Democrats are counting on that to help them win the argument. The question in Washington, the question across America is, what do you do if you don't get a paycheck? The question in Washington right now appears to be, who blinks? The Democrats say the president wants the wall and we're going to fight for those workers and they think -- they think that as days like this pass, it helps them. Are they certain?

SEUNG MIN KIM, WHITE HOUSE REPORTER, "THE WASHINGTON POST": It's unclear who wins at the end of the day because for a while you did see the cracks form more and more within the Republican Party as we got more of these stories about the pain that the federal workers are going through. But I think that once the president made his way to Capitol Hill this week, particularly among Senate Republicans, he was able to rally at least a sense of unity after he said, we need to stick together, we just need to stay unified, and it was really only senators such as Senator Susan Collins of Maine and Lisa Murkowski of Alaska who spoke out in that private meeting with the president.

Now, if and when he goes ahead with this national emergency declaration, we know that's another act that will divide Republicans, those who think this is the only option they have left, those who think this is a wrong -- abuse of executive power. But it's clear to see, like, who comes out at the end of the day because, again, Democrats do feel that they do have a strong hand in this, that the wall is very unpopular, but at the same time, you know, they are the party that tends to feel more sympathy toward federal workers, and I think that is also a calculus that we shouldn't dismiss at this point.

ELIANA JOHNSON, WHITE HOUSE REPORTER, "POLITICO": Yes, I think the question is, as these hardship stories of federal workers accumulate in the coming days and weeks, who does that increase the pressure on? Federal workers are, you know, a largely liberal bloc, and the question to me is, do they put the pressure on Nancy Pelosi to say, you know, you've got to bring this to an end. We're really feeling the crunch here. Or do they back her and say, you can't give in -- you can't pay ransom to a terrorist.

I don't know which way that's going to go. And I think Democrats are waiting -- Democrats and the president are waiting to see here. I think the thing that Democrats maybe didn't expect is that president can be sort of a madman on these sorts of things. He's simply not going to bend. And I don't think it's at all clear if he declares a national emergency that he'll reopen the government.

KING: Right. If he declares a national emergency, he may have to reopen the government. That's an interesting point there.

Just again, as we focus on the political debate in Washington, just want to remind people, we'll show you the numbers here. There are 800,000 federal workers who don't get a paycheck today. They're supposed to get paid today. They're pretty much across, if you look at the pay scales there. Most of them you would define as middle class making -- some of them make below $40,000 a year, many of them make in the $40,000 to $60,000 range. You see a bunch there in the $60,000 to $80,000 range. There are some people at the higher income skills who you would presume -- you would presume, depending on where they live, housing costs, other costs could be high depending on where you live in the country. You presume some of those at the higher end at least might have more savings who can survive at least missing one paycheck.

But does Washington get this? I mean you talk to members of Congress. They say their phones were ringing off the hook already even before today.

OLIVIER KNOX, CHIEF WASHINGTON CORRESPONDENT, SIRIUS XM: This -- that -- those graphics actually understate the problem because all those people go to restaurants, all those people go to the movies --

KING: Great point.

KNOX: All those people go to box stores, buy their kids' clothes, buy their -- so there's actually a much bigger ripple effect than just federal workers. All the people who need a federal license to do something. People who are, say, the fisheries in Alaska is the classic example. All these other people who need the federal government to get off its butt and help them, that has a broader impact.

In terms of the winners and losers, I thought it was really telling that the administration was taking steps to ease the pain on some of its own constituencies. That tells you that that pain is something they felt that they need to avoid. So farmers who were getting transfer payments to help them because they were suffering as a result of the president's trade war, right? That program got locked up. Well, they ended up extending the deadlines to apply for it.

So to the degree that the White House is moving to ease the pain on its own constituency tells you that that is a potentially influential lever.

KIM: And I do want to point out too that we talk about the 800,000 federal workers who are going without paychecks, but remember the federal contract workers who work through contractors. They are not guaranteed pay after the shutdown ends, whenever that is. I mean the Senate passed legislation to guarantee back pay for whenever the shutdown ends. The House is taking up that essentially as we speak. But it's the contractor workers who are not guaranteed back pay as well.

KING: Right.

And let's listen to more of some of the federal workers who are saying, look, you know, maybe I'm for the wall, maybe I'm against the wall, the politicians should work this out under normal circumstances, not on our backs.

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JOANNA MCCLELAND, FURLOUGHED FEDERAL EMPLOYEES: It's quite possible, even if we open this week, I don't see a paycheck before the first of February, and where's my rent going to come from?

AMBER OLSEN, COAST GUARD WIFE: My husband's in there making homemade bread because it's cheaper than buying a loaf at the store.

[12:10:04] LYNN STRATTON, FURLOUGHED FEDERAL EMPLOYEE: I have enough for one more mortgage payment, then I've got to go to CarMax tomorrow and sell my car.

(END VIDEO CLIP)

KING: You hear that. And, again, the Democrats believe they're in the stronger position because they say let's reopen the government, Mr. President, and then we'll negotiate. The president says, no way, because that's my only leverage, right? Is it -- is it any more complicated than that?

MOLLY BALL, NATIONAL POLITICAL CORRESPONDENT, "TIME": That's pretty much what's happening. Well, you do hear -- the Democrats believe that they are winning the public argument, and that does appear to be borne out in polls so far, that more -- a lot more people blame the president and Republicans than are blaming the Democrats.

And -- but as Eliana was just saying, that doesn't necessarily do you any good if the other side doesn't care what the polls say.

KING: Right.

BALL: And you do hear -- you notice in the talking points that the Democrats are reciting on this, they're focusing much more on opening the government than they are on the wall issue. They're trying to make that a secondary issue, trying to focus people's attention, because they feel like that's their strongest argument is to say, let's get back to normal and then we can negotiate. And they are making the case against the wall and they are making the case against the president's argument about the crisis at the border. But, first and foremost, they're saying, let's get the government back on track, get back to regular order.

KING: You make a key point there because Democrats have passed three, I think, of the four bills they say would reopen most of the government. It would reopen Treasury, Agriculture, Transportation, HUD. They're working today on the bill that would fund the Interior Department and the Environmental Protection Agency. That leaves open one department, the Department of Homeland Security.

At what point will House Democrats, now that they're in power for a week now, at what point will they bring forward that bill in which they will have to say, is your proposal, Speaker Pelosi, is your proposal House Democrats zero for barriers, fencing, borders, or will they put some number in there that essentially is, OK, here's our starting point, Mr. President. You want 5.7. Here's our number. Let's --

KIM: I think they generally -- I know Nancy Pelosi has said zero dollars, maybe $1 for that border wall. But they've shown that they do -- or they are willing to put forward some funding for border security.

BALL: Right.

KIM: It's one point -- it's varied from 1.3 billion or 1.6 billion. They're talking about new technology, repairing existing fencing that is there.

And it's been interesting. You've been -- you've been seeing efforts to kind of conflate the two and kind of confuse the debate, and I think that's another issue here. I'm recalling the latest situation remaining with the congressional leader this week which didn't go all too well, obviously, when the president reportedly slammed the table and left.

But Republican leaders came out saying the president requested border security and Nancy Pelosi said no. And Democrats say -- and also -- later the vice president and Senator John Thune confirmed, the president asked for a wall and Democratic leaders say no. So you do see how the conflation of border security and the wall, which are two different things, is causing a mess of the debate as well.

JOHNSON: This is also why you've heard the president say, when Democrats say they want border security but won't build the wall, they're pulling one over on you because walls work, they're medieval technologies like the wheel, and that's why people have gone back to them over and over again. This is why wealthy people put walls around their house. He wants -- he wants people to think that border security means very little without a physical barrier on that border.

KING: Right. And at some point -- I assume at some point, if the president declares a national emergency, that would go into court. But at some point -- we'll get to this in a minute -- there have be negotiations -- resumed negotiations. We would think -- we would think the Democrats -- the Democrats believe they're winning right now. At some point they've got to say, how much? They're -- they will get, at some point they have to put on the table how much they're willing to give and then we'll see.

Some news as we go to break. The House just passed the bill to refund and reopen the Interior Department and the Environmental Protection Agency. That's the House. The Senate majority leader, the Republican, Mitch McConnell, so far says, I'm not touching those.

Up next, the president considers one potential off ramp to the shutdown crisis amidst the chaos. The new class of House committee chairs channeling one thought as they pose for a team photo.

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REP. NANCY PELOSI (D), HOUSE SPEAKER: Think majority, majority, majority.

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[12:18:10] KING: Welcome back.

As we went to break, the House passing an additional piece of legislation. This one makes sure that those furloughed government workers get paid. They'll get their back pay. It just passed the House by a vote of 411-7. It now heads to the president for his signature.

As we watch this play out, it's playing out this hour. Vice President Pence pressing the administration's case in the shutdown fight. We'll see if he says anything interesting. We'll bring it to you, if so.

Later today, the president himself hosts another roundtable on border security. The bet on Capitol Hill is that the next big move is for the president to declare a national emergency to pay for his wall. CNN is told the administration actively looking into using billions of dollars in unspent Defense Department money. Originally other money -- also funds originally budgeted for disaster recovery and some military construction.

Here's what the president told Fox News last night.

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SEAN HANNITY, FOX NEWS: You said earlier today that it's likely that you're very likely going to declare a national emergency. How soon would that happen?

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: You know, if we don't make a deal with Congress, most likely I will do that. I would actually say I would. I can't imagine any reason why now, because I'm allowed to do it. The law is 100 percent on my side. So if we can't make a deal with Congress -- we should be able to make a deal with Congress.

(END VIDEO CLIP)

KING: Now, it's important to note, as we discuss this, even if the president declared a national emergency, the government does not just immediately reopen. The Senate, the House and the president would still need to reach agreement, and he would have to sign, a plan to fund the shuttered parts of the government. This has been a fascinating debate, though. Many do see it -- even a lot of Democrats are saying it's the only off ramp for the president to do this, then they'll sue, or somebody will sue, and we'll let the courts figure it out, but at least then you could get back to the table and try to reopen the government.

But a lot of the Republicans -- a lot of Republicans who were on the record when President Obama did some national emergency saying that's an overreach, we have a Congress decides how money gets spent in this country, even a lot of Republicans, including Chuck Grassley today, who's moving from Judiciary to be the new Finance Committee Chairman, saying, I don't want you to do this, Mr. President. Where's this going to end up?

KIM: That's such an important caveat that you just said as well, that this does not guarantee the government reopening. We talked to Mark Meadows yesterday afternoon, a close Trump ally, and he told reporters that -- he's like, I don't understand why people are saying, just because he does this national emergency declaration that the government will automatically reopen now. So it is by no means a process that the president would agree to do that, even if he goes ahead and makes this declaration.

[12:20:21] But we've heard so much about -- some of the complaints that we've heard about from Republicans are those potential concerns about an overreach of executive power because it's something that they've talked a lot about when President Obama was in office. So the fact that, you know, the concerns within his own party, the fact that this isn't necessarily a guarantee, the government reopening, and also the fact that this will get challenged in the courts. I talked to House Armed Services Committee Chairman Adam Smith yesterday. I asked him how Democrats would respond if this happened. He didn't even let me finish my question before he said, we would sue.

Now, there's a question whether Congress has standing to sue and there are lawyers working that out right now, but this is going to get tied up in the courts for a very long time.

JOHNSON: I think there are a couple things to think about. The first is that, in terms of Republicans being uncomfortable with this, there have been a lot of hypocrisies. You know, Republicans criticizing Obama for executive overreach who haven't criticized Trump for the same thing. I don't think we'll hear a lot of that because Republicans tend to go along with the president.

But I do think that there is a faction of people around Trump who see -- who are hoping that the president declares a national emergency, gets sued in the courts, and the president says, well, I tried. You know, that's the end of that. They don't actually believe he'll press ahead after there is a lawsuit challenging him. And so I think there is a sort of -- that's sort of a red herring and that the president knows he's likely to lose if he goes down that path, but views that now as the only way out of this that doesn't -- that doesn't look like he's caving on a central campaign promise. You know, he had thousands -- hundreds of thousands of people chanting "build the wall" and I think there are a lot of people who see it as an exit ramp. Again, a smaller minority who don't, who actually want him to build this wall. But I think that's where things stand right now.

KING: Right.

It leaves on the table, why didn't he do a better job of getting it when his party controlled both chambers of Congress.

JOHNSON: Absolutely.

KING: But we are where we are. We are where we are now. And the question is, again, who will blink.

One of the interesting things, the president went to the border yesterday. He wore a "make America great again" hat, which should tell you just about everything you need to know, that he views it, at least in part -- that's a campaign hat, it's a campaign slogan -- that he views it, at least in part, as about politics.

But here's something. The agents -- the Border Patrol agents were talking to the president about drug crossings. The agents were very honest with the president, saying much of the drugs, if not most of the drugs, come through legal ports of entry. The bridges, the openings, the roads where all the commerce goes back and forth, in addition to the tours, not through the sections of the border that runs through ranchlands in the fight (ph). The president, though, says this.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Somebody get up and give us just for the media a little definition of exactly what's in front of us, because it looks pretty brutal. This is not a manufactured deal, as you say, this is the real stuff. And this is nothing compared to what they have. (INAUDIBLE). And this is just all recent. This is all very recent. They didn't have to go -- they didn't have to go very far. This is all very recent.

(END VIDEO CLIP)

KING: The striking thing to me here from the beginning is, the president won an election -- won a nomination and then won an election with this as a signature issue. His party controlled both chambers of Congress in the first two years. He didn't get this done. He has every right to press forward now and every right to tell the Democrats, yes, you won the House. I know. I get it. But we still control the Senate. I control -- but why be misleading about things? He has -- he has a case to make without being misleading. And, you know, when he talks about drugs, when he talks about people, there's a problem at the border. Most of the drugs come through a point of entry. They will tell you that if you go there.

KNOX: They're hearing that exact question from their allies outside the White House, some of the people that they deploy as surrogates or quasi-surrogates to the networks, they are hearing, you guys need to tidy up your statistics. You need to tidy up this case. You cannot hand Democrats day in and day out small victories, either through fact checks or gotchas. They're hearing that argument.

The thing is, though, that starting at the top there is a certain casualness with the facts and the truth and it's hard to get that message across. They have dialed back. They've rolled back some of the numbers that they used to use, false numbers that they used to use, don't make any -- don't make appearances anymore.

JOHNSON: I would note on that point, you know, the president and his allies like to talk about terrorists coming across that border. The press secretary, Sarah Huckabee Sanders, getting challenged on that by Chris Wallace last Sunday. And Kellyanne Conway, interestingly, saying that was an unfortunate misstatement, which I thought was an enormous concession by the White House on the facts they're martialing in support of --

KNOX: That's the number I was thinking of because you haven't heard it nearly as much.

JOHNSON: Right.

KNOX: And one of the really interesting things about some of this stuff, as you point out, some of the stuff that the president was being shown was, yes, we got this at the ports of entry, or, you know, we got this -- I mean it was -- it didn't necessarily back up the president's -- the president's --

KING: Now, there's an argument, if you build more wall, or more fencing, you can then dedicate more resources at the point of entry where it's coming through. So there is an argument that the wall, or barriers of some kind, can help you then focus your attention where it's coming through. But the president conflates things and exaggerates things and --

[12:25:13] KNOX: The White House proposal from the day of his remarks in the Oval actually had line items for all of that. It had line items for shoring up points of entry security. It had line items for more agents. It had all of those other line items, in addition to the wall. And it sort of felt, for just one little moment, like they were playing down the wall (INAUDIBLE) with the debate.

BALL: And Trump himself has actually played down the wall at various points. He's talked about, oh, well, actually, we've already made the border tighter in all these other ways. That was his line back in December when he was preparing to sign the bill that the Senate had passed and before he reversed himself. At various times, you know, he spent two years sort of explaining why he wasn't doing this or being put off, because the fact is that the Republican Congress didn't want to do this. They didn't think it would really do any good. They didn't view it -- even the immigration hardliners don't think this -- that the wall itself is the real solution to tighten the border and reduce illegal immigration and even reduce legal immigration. You do need people, you do need technology, you do need other stuff, and there's places where a physical barrier isn't appropriate according to basically experts on both sides. The president's real argument for the wall has always boiled down to, I said I would do it and people liked it.

KING: He also --

BALL: That's pretty much the extent of the argument.

KING: He also said Mexico would pay for it and he ran from that one yesterday as well.

Up next for us, the first official signs now of a withdrawal of U.S. troops from Syria. The question, just how long will it take?

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