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Trump's State of the Union; Division with Congress; Investigation into Inaugural Committee. Aired 12-12:30p ET

Aired February 05, 2019 - 12:00   ET

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

(COMMERCIAL BREAK)

[12:00:21] JOHN KING, CNN ANCHOR: Welcome to INSIDE POLITICS. I'm John King. Thank you for sharing your day with us.

President Trump delivers his State of the Union Address tonight and the White House is promising a message of unity and bipartisanship. But, let's be real, there is anything but unity and bipartisanship in the nation's capital. We're just days removed from a government shutdown in a fierce debate over the president's demand for a border wall, and in the first act of the 2020 campaign. So even if there are bipartisan moments tonight, it would be wise to question their shelf life.

Let's take a closer look at the moment.

The biggest change tonight you will see. Right away, this was the House of Representatives when the president spoke last year, a Republican majority. This is the House of Representatives tonight, a Democratic majority. Which means behind the president will not be Paul Ryan, it will be the new Democratic speaker of the House, Nancy Pelosi. That is the biggest optic change you will see tonight and it changes the dynamic of the speech, it changes the dynamic of the moment.

The president will speak tonight from a position that you cannot describe as strength. He has weakened as a president. Forty-two percent in his approval rating among registered voters. It's been pretty static throughout the Trump presidency, right around the 40 line, down a little bit from early on, but right at four in 10 Americans.

However, the president does have a good story to tell when it comes to the economy. That's what he wants to play up. That's his inauguration. Here's the Dow now, up. The unemployment rate back when he took office, down. Now, jobs, especially if you look at the last few months, the president can make the case the economy, because of his tax cuts, because of deregulation, he can make a strong case the economy right now is booming.

But where are we in terms of the Trump agenda? Well, let's take a look at some of that.

He's trying to negotiate a trade deal with Congress -- I mean with China. Congress on the sidelines for that. He needs Congress to pass his new replacement for NAFTA. Can he get that done this year? Forget about this. This was a priority in the first two years of the Trump administration. We're not going to replace Obamacare with Nancy Pelosi as the speaker of the House.

Infrastructure. One applause line tonight most likely. Build the wall. That is the big divide here in Washington right now. And the president sometimes talks about paid family leave. Republicans get nervous about that.

So here we are in the big divide. He will say, let's be bipartisan, let's be unified. Listen to the top two leaders in the Senate. America is divided.

(BEGIN VIDEO CLIP)

SEN. CHUCK SCHUMER (D), MINORITY LEADER: The state of the Trump economy, failing America's middle class. The state of the Trump health care, failing American families. The state of the Trump administration, chaos.

SEN. MITCH MCCONNELL (R), MAJORITY LEADER: the story of the last two years has been one of immense policy progress for our country. The American people are less interested in beltway melodrama and more interested in that classic question, am I better off now than I was two years ago?

(END VIDEO CLIP)

KING: Let's talk over the big moment. With me to share their reporting and their insights, the Democratic strategist Maria Cardona, Margaret Talev of "Bloomberg," CNN's Abby Phillip, Karoun Demirjian with "The Washington Post," Molly Ball with "Time," and the Republican strategist Kevin Madden.

Somebody please correct me. It would be nice to have a big bipartisan moment in Washington. The president will talk bipartisan. But is there anybody at the table who thinks the legacy of this speech will be that the president found the circuit breaker and Washington got back to being a happy place?

MARIA CARDONA, CNN POLITICAL COMMENTATOR: Absolutely not.

KING: So then what is -- what is the moment? What is the moment? We have been wall or nothing for the past six weeks here in Washington. Even had a shutdown over it. The president is gearing up for re- election. He has to be cognizant of that. Any president would be. Nancy Pelosi is going to be behind him. What will define this night?

ABBY PHILLIP, CNN WHITE HOUSE CORRESPONDENT: Well, I don't know that this is going to be one of those State of the Union moments where we see some kind of grand vision or some kind of breakthrough moment. In fact, this could be one of those State of the Union Addresses that is unremarkable because it does not have anything that really moves us substantially forward on some of the big issues of the day. And one of the problems and the reasons for that is because the

president, and Democrats as well, have -- neither side have been willing to step off of their starting marks. You cannot have a breakthrough bipartisan moment if you insist on this one thing. And I think the president really has insisted on this one thing, which is his border wall. It's made it very difficult for there to be progress forward. I think Republicans would say Nancy Pelosi has insisted on her one thing, which is no wall.

But, because of that, we can't get through this. We can't really talk about infrastructure because literally nothing is going to happen in Washington until someone is able to say, I won, let's move forward from that particular fight on the wall.

KING: And so on that point -- so on that point, this will be giving -- his speech will be given during the backdrop of continuing negotiations hopefully to avoid another government shutdown.

CARDONA: Right.

[12:05:06] KING: If you're the president of the United States, you know you're not going to get your wall money. It's just not going to happen. You make get a modest amount of money. It's possible to compromise a deal. But even that's a big question mark. You're not going to get what you want and so you're preparing a national emergency.

Kevin Madden, if you were a strategist advising the president and you know you're going to declare a national emergency, if not today, sometime in the next two weeks, do you do it from that platform or do you hold it?

KEVIN MADDEN, CNN POLITICAL COMMENTATOR: I think you have to hold it.

And I think to Abby's point, you know, bipartisanship is not really achieved in any one moment. And I think that's why this speech tonight is probably not as important as like the next three weeks after this speech. Because I think -- and that's what his real charge is tonight, is to lay out and provide some of the specifics on the areas where they are going to agree, because they're not going to agree on the declaration of an emergency. But there is broad bipartisan agreement and appetite for work together on infrastructure.

You know, a lot of other things that are out there and can he offer specifics about that? Infrastructure, opioid epidemic --

KING: Has he ever? He's been president for two years. Has he ever focused on anything for more than a couple of days in a sustained way?

MADDEN: That's -- that is the problem.

KING: I raise it as a question. He has not. Especially someone on which he needs the other party's help.

MADDEN: No. MOLLY BALL, NATIONAL POLITICAL CORRESPONDENT, "TIME": And I think -- I think that that really highlights the big challenge that he has, is all of the credibility that he has squandered, no matter what he says tonight, it's difficult for his audience, either the politicians on Capitol Hill or the American public to believe that that's something that he's committed to and is going to stick to. He could give all the specifics in the world. He could sing Kumbaya and say, Nancy, I love you, I know I'm not going to get the wall, let's get together and talk, and nobody would have any faith that that would be the same president that would come to work tomorrow and actually follow through on what he said he was going to do.

MARGARET TALEV, SENIOR WHITE HOUSE CORRESPONDENT, "BLOOMBERG": There's also a governing challenge for the president, which is that as he heads into 2020, in order for him to be operating from a position of strength, he has to know he has his base with him. And if there is one group, according to all the recent pollings that do not want a bipartisan approach and are not looking for deals with Nancy Pelosi, it is President Trump's base. So as we've proceeded over the last several weeks and through the shutdown about what kind of a deal could he make on immigration if there was going to be a grand bargain, the president up till now has not been willing to look at -- forget about citizenship, permanent residency for some of the DACA people, some of these real bare bones building blocks that could get you to some kind of a -- a grand bargain with the Democrats.

CARDONA: But even --

KING: Let me -- to that point, as you jump in, Maria --

CARDONA: Yes.

KING: Define what a grand bargain would be, because one of the things -- we can't -- no, we can't -- we can't answer some questions tonight --

CARDONA: That's right.

KING: But one of the ideas is, you know, so -- so will -- can -- somebody came to him and said, they'll give you your wall money if you give them this. If it's a temporary extension of DACA, Democrats are not going to accept that, right?

CARDONA: No. Nothing on temporary, John.

And I think the other thing is, is that, let's remember that there have been moments in the past, not very long ago, where this president was given a grand bargain because he asked for it. And it was a bipartisan grand bargain. And then what happened? The Stephen Millers and the Ann Coulters and everybody else from his base who told him don't you dare make this deal that really would allow any additional -- whether it's protections for the DACA students or any additional even legal immigration, that is something that, to your point, Margaret, is anathema to his base.

But even further, what the president is going to face tonight is something that he has not faced before, which is, he's going to look out into the audience to a new Democratically controlled Congress that has a lot more women, a lot more Latinos, a lot more African- Americans, a lot more Muslims. And the symbolism, I think, we cannot underscore more because this is a representation of all of the communities that have felt besieged and attacked by this president. And let's remember that the midterms were a complete repudiation of Trump's agenda.

And the economy is going great and he will absolutely talk about that. But if you look at the polls and when you have two-thirds, maybe three-fourths of the American people that believe this country is going in the wrong direction, that is not a good place for this president to be.

KING: You make a good point about this is always a signature moment, annual event in Washington theater. All the more so because of the changes. Nancy Pelosi behind him. It will be interesting to watch her face. It will be really fascinating to see, does the president make any personal gesture beyond, you know, the traditional, hand the copy of the speech? To your point, does he turn -- I think he's going to say, I love you, let's work together on things.

KAROUN DEMIRJIAN, CONGRESSIONAL REPORTER, "THE WASHINGTON POST": I think he will.

KING: But can he -- can he say, we haven't gotten off to a -- you know, would he say something like, we're not off to a good start. Let's -- I commit to you, I'll try to fix it. And then the -- the other faces in the audience, we're going to be watching the traditional up and down, but the faces in the audience, to your point about the new diverse Democrats, this is going to be fascinating theater.

DEMIRJIAN: Yes, it's going to be a fun night for cameramen and producers to pick who they're going to focus in on at each line because those reactions are going to be just very political and (INAUDIBLE).

TALEV: And all the presidential candidates in the audience.

DEMIRJIAN: Oh, exactly, for sure.

I mean, look, the president has the cameras mostly focused on him. He has the ability to try to make some ameliorating sounding statements. He has the ability to read off of a printed script that he's mostly going to stick to and make this pitch as much to the public as he can over the heads of Congress as he can because, again, this kind of goes to both Maria's and Kevin's point, but tomorrow this -- the show is on the House Democrats. They are picking up their probe starting this week. They are going to run with everything. So basically whatever the president says, that's fine for that one day, but House Democrats are going to start going after him hard immediately this week. The president's going to react impulsively the way he always does. And we will see how that compares to what he says. But this is his chance to say something that sounds like it has a broader appeal. [12:10:35] MADDEN: I would just say real quick too, he's going to be

looking out into an audience of a few senators on the Republican side that where there's been a fragmentation of support after the 35-day shutdown. The president spent a lot of their political capital as well. So they're going to be looking for reassurances.

So I know oftentimes in State of the Unions we're trying to look at the audiences beyond the room. But the audience in that room there of senators, they are going to be looking for some reassurances at the -- the White House finally has a plan and a plan that they can get behind in unison.

DEMIRJIAN: In Syria and Afghanistan.

KING: Well, you see the cracks in foreign policy. The Republicans and Democrats breaking there on this issue of the Senate Republican leader making crystal clear, number one, don't shut down the government again, Mr. President. Number two, Republicans saying, we don't like your national emergency idea.

(CROSS TALK)

KING: Yes, some of them don't like it as a matter of principle because a Democratic president then could do the same thing. Some of them don't like it -- look at the letter from the Texans --

DEMIRJIAN: Right.

KING: Because they think their hurricane disaster relief, not just money for Puerto Rico, but money for Texas and whether -- if they're building a new bridge in your state, that that money will be taken and put. So all politics is local.

But on the question of immigration, the president will talk about a lot of things tonight. To everybody's point, the people in Congress, Democrats and Republicans, trying to see, are we going to be in another cycle of shutdown or does the president give us some way out on immigration? Here's his press secretary.

(BEGIN VIDEO CLIP)

SARAH SANDERS, WHITE HOUSE PRESS SECRETARY: What I can tell you that he will discuss, when it comes to the wall and immigration, is that the president is committed today, as he's ever been, to border security. He knows that we have to stop the cartels, the coyotes, the human trafficking coming across our border. He's serious about it and he's not going to stop until we fix this problem.

The crime and the drugs and those things drastically stops if you have real border security, and that includes a wall.

(END VIDEO CLIP)

KING: Now, she's not going to steal the president's thunder, but, you know, the staff sets the tone for the day. It does not sound like the president's moving anywhere here. He may not go and say, all right, fine, since you're not going to give me my money I'm going to announce tonight my national emergency, but it also doesn't sound like he's got any overture to try to break this -- break the ice here.

CARDONA: I don't think he will. And let's just look at how he has argued for his wall so far. And I think until he uses real facts, real evidence, talks to people who actually are from the border, even Republicans like Congressman Will Hurd, who has the longest district that touches the border, he is against a wall. He has got to use facts and not use Hollywood movies like "Sicario: Night of the Soldier," to make the argument about why he needs the wall. If we talk about border security, absolutely, we are all in to have real smart investments on border security.

But the other reason why I don't think tonight will actually lead to something that both sides can agree on is, look at the symbolism of the people who are invited to the speech. The Trump folks have angel mothers, and absolutely our hearts go out to them because anybody who has to go through that, whose kid or a family member has been murdered by anybody, but their focus is to continue to demonize immigrants. On the Democratic side, they're going to have a woman who was separated from her child, and they will be in the audience. So when you have that kind of symbolism, I think that underscores how, you know, Democrats are from Venus, Republicans and this president not even from Mars but probably from Pluto.

PHILLIP: It has been interesting that the White House has not changed their strategy even after the last shutdown. You know, when you talk to sources about what is going to happen tonight or what's going to happen tomorrow or at the end of this -- at the end of this CR on February 15th, nothing has changed in the way that they talk about the wall, in the way that they talk about the politics around the wall and the border issue and the shutdown. And so you have -- you can draw no conclusion other than you're going to hear much of the same from President Trump tonight and that behind the scenes the White House is just waiting out February 15th, waiting until they get to the end of this line, because as the president has said, he doesn't think anything is going to come out of -- out of the congressional negotiators who are working on this. And they're working behind the scenes to figure out how he can do some kind of national emergency, which is not compromised, it's not really a way forward, it's a way out of dealing with Congress.

KING: And to that point, nobody on Capitol Hill who talks to the staff believes what the staff is saying, and they're not critical of the staff, they just have lived through this too many times and they don't trust until the president says it, and says it twice, and says it three times and tweets it. They don't --

CARDONA: Or signs something.

KING: Or sign -- they don't believe it, which is why we're in this -- it is a fascinating moment.

[12:15:00] And you can watch our special coverage of the president's State of the Union Address tonight. Special coverage starts at 8:00 p.m. right here on CNN. Please come back. Stay with us throughout the day.

Next, a new reason for the president, oh, to be more than a little mad at his long-time lawyer, Michael Cohen.

(COMMERCIAL BREAK)

[12:20:09] KING: Today, a major new legal headache for a president whose entire life is under investigation, a lot of it courtesy of his long-time fixer and lawyer turned witness, Michael Cohen. Federal prosecutors hit the Trump presidential inaugural committee with a broad subpoena yesterday. The committee says it intends to comply and will hand over documents related to virtually every donor and donation and items including vendor contracts, federal disclosure filings, ticket packages and photo opportunities with the president, during that time the president-elect.

The subpoena cites a serious and sweeping batch of potential crimes in the demand for documents, including conspiracy against the United States, lying, mail fraud, wire fraud, money laundering, and election law violations, including those laws barring foreign nations from funneling money through straw donors. "The New York Times" reporting the investigation into the inauguration grew out of the investigation into Trump attorney Michael Cohen. Of note, "The Time" says Cohen recorded a conversation with a top inauguration official whose companies were paid $26 million by the inaugural committee.

CNN's Kara Scannell joins our conversation.

You look at the list of crimes alleged here, and that's -- a, it's very weighty, and, b, it also reminds us that as people talk about the Mueller investigation winding down, there are other investigations that seem to be ramping up.

KARA SCANNELL, CNN REPORTER: That's right. I mean the list of potential crimes here also goes in a way to the heart of this investigation as well. I mean were there foreign donors that were funneling money into the campaign ostensibly to try to gain some influence? And that's one of the violations that is in this subpoena that they're looking into, whether people were having the donors pay money directly to vendors to bypass disclosure laws, or whether they were making donations in another's name, kind of this notion of a straw donor to avoid disclosing that, too.

You know, but it's -- it's also very interesting that this investigation has some overlap with the Mueller investigation. Sam Patton (ph) was one of these guys who was involved in the inauguration and fundraising and he pleaded guilty and has been cooperating with Mueller since the summer.

We know that Mueller's team had stopped Russian oligarchs, had questioned them and people related to them. This time last year, about, you know, this concept of straw donors. So now we're seeing it all come to a head and taking shape with SDNY really leading the charge as Mueller appears to be winding down. KING: And if you look at the top of the inaugural committee, two

people who have been in the news quite a bit, Tom Barrack, who's a long-time friend of the president, he's a big developer, he was a big player at the convention, the Trump convention, chairman of the convention, then chairman of the inaugural committee. Rick Gates, who was a cooperative witness now in these federal investigations, was the deputy campaign chairman, then was the deputy chairman of the inaugural.

In terms of, this takes you right into Trump world. We'll hear in a minute the White House reaction saying this has nothing to do with the president. But this, again, takes you deep into not just Trump campaign, Trump presidential campaign. Well, Tom Barrack was a friend longstanding way before Donald Trump came into politics.

PHILLIP: Right, one of this closest friends currently, even as he's president right now.

This inaugural committee investigation is one of those things that is part of the Pandora's box of that Michael Cohen raid when investigators went in there and grabbed all these documents. It opened the door to a lot of potentially serious problems, perhaps even more serious problems for some of these people than even the Mueller probe.

And the White House seems to kind of acknowledge that in some way. They are calling this -- they're implying that this is sort of a witch hunt. Like in the same way that the Mueller probe is a witch hunt. But unlike the Mueller probe, the Southern District of New York is being led by someone who was appointed by President Trump.

KING: Right. So they're going to have a really hard time making that political argument. But this is really serious stuff and it makes me think back to the inauguration when you saw all of these like tens of -- hundreds of millions of -- $100 million coming into this committee and yet, you know, the cake that was put out there was a replica of the Obama cake and it was made partly of Styrofoam. A lot of people wondered even then, where was all of this money coming from and where was it going? And we might be getting some answers to that.

KING: And you mentioned all of this money. Let's just show you, by comparison. We know President Trump likes things big. And we know President Trump likes to say he set records. $107 million brought in for the Trump inauguration. Twice as much as President Obama. $0 million for George W. Bush. $33 million for Bill Clinton. But $107 million. And, remember, Donald Trump had three inaugural balls. Those events cost money. Obama had 10. Bush had eight. So it was a smaller inauguration in many ways in terms of events, but a giant fundraising bonanza. And the question is, where did the money come from, where did it go?

BALL: Well, when you think about this period, the transition period, that is a really crucial time for a lot of these investigations because obviously there's been a lot of focus on the campaign and the potential Russian involvement during the campaign period. And then there -- the White House has often spoken about, well, none of this extends into the presidency or they consider that to be off limits, walled off. But there's this period in between that's really crucial because that's when everybody realized, oh my gosh, this guy's actually going to be president. This is our chance to get in on whatever he's going to do. So that is when the potential for corruption, I think, was the highest. That's when Michael Flynn was having his contacts with the Russians. That's when a lot of this stuff was going on. And that is going -- and this, I think, really throws that into (INAUDIBLE).

[12:25:25] KING: And I just want to show a few -- if you're not familiar with how this works, it's like a campaign essentially. You want to give to the president's inauguration. Molly makes a great point, some of this is done, there's gambling in the casino, done by people trying to buy influence or at least curry favor with the new administration. Maybe you didn't support him during the campaign. You realize now he's going to win, so you give money to the inaugural committee to try to get on the good side.

This is how you're supposed to do it. You're a donor, whether you're an individual or somebody else, you get your money to the inauguration committee, then it gets sent out to the vendor. The person providing the lighting, you're renting a hotel space, you need security for something. But the allegation is, you see the end around there, is that they knew some of this money was dirty, and it couldn't come in for the legal purposes, either the contributions are too big or they're from foreign sources, so you do an end around so you don't have to report it somewhere.

But if you talk to the people -- remember, it was then President-elect Trump. He's the CEO of the operation, right? His chairman's under indictment, about to be sentenced. His national security adviser, Michael Flynn, pleaded guilty. His deputy campaign chairman pleaded guilty. There are others. The list goes on. His lawyer, Michael Cohen, pled guilty.

Talk to somebody at the White House. This is the president-elect's inaugural campaign that's under scrutiny. Nothing to do with us.

(BEGIN VIDEO CLIP)

KELLYANNE CONWAY, COUNSELOR TO PRESIDENT TRUMP: Well, I only know what I've read about the subpoena and I'm sure everybody will comply, as we have with any such request here.

SARAH SANDERS, WHITE HOUSE PRESS SECRETARY: Look, I'm reading the same reports you are this morning and gathering that information. What I do know at this point is this has nothing to do with the White House.

I think the common thread is a hysteria over the fact that this president became president. The common thread is that there is so much hatred out there that they will look for anything to try to create and tie problems to this president.

(END VIDEO CLIP)

KING: The hatred part you alluded to earlier, there are people out there just digging this up. But how could you say this has nothing to do with the White House?

Number one, to your point, Michael Flynn worked in the White House in one of the most sensitive jobs in the White House. Manafort and Gates continued to have contacts with people at the White House, especially in the very early days of all this.

He's the CEO of the organization. Whether it's a widget factory or the United States of America, how can so many people be in trouble around you and you -- the people who work for the president get to say, but he has nothing to do with it. Isn't he at least responsible for the culture?

DEMIRJIAN: Yes, I mean, look, it's the hair splitting that they're doing because it becomes closer and closer to him with every stage of this investigation as it proceeds.

Yes, yes, OK, if you're the president and you're in the White House, there are certain way that that does shield you with executive privilege, but that really does not apply to the organization. It doesn't apply to the transition period. And we're seeing the president, though do this every time. That if something gets too close that it might implicate him, he cuts that person loose, except for it becomes more difficult to do that when it's the same cast of characters. It's rotating through each of these different environments, which is not the Oval Office specifically yet itself, but it's getting close.

KING: And again -- and again, the moment -- the moment. The president delivers his State of the Union Address tonight. He's just passed the halfway mark in his first term, trying to gear up for re-election, and this is with us today, tomorrow and for some time to come.

As we go to break, something that, at least to me, is much more uplifting. Let's take a live look. We call that a duck boat parade. Boston hasn't had one in a couple of months since the Red Sox, so they're in desperate need for a new one. You see Tom Brady there with some of his children, the Lombardi Trophy. I could watch this forever. I suspect they're going to tell me take a break.

We'll be right back.

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