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Conservatives Balk at GOP Plan to Avert Shutdown; Steve Bannon Refuses to Answer Lawmakers' Questions. Aired 6-6:30a ET

Aired January 17, 2018 - 06:00   ET

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

UNIDENTIFIED MALE: I don't think we're going to have a deal on DACA by the end of the week. What we need to do is to fund the government.

[05:59:32] UNIDENTIFIED FEMALE: With a shutdown looming, House Republicans scrambling to go find the votes to pass a short-term bill.

UNIDENTIFIED MALE: I hate to have a temporary spending bill. It's crisis management at its worst.

UNIDENTIFIED FEMALE: If we have a shutdown, it is the president's responsibility.

SARAH HUCKABEE SANDERS, WHITE HOUSE PRESS SECRETARY: Democrats' unwillingness to actually put the country ahead of their party is what's stalling things.

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: This has turned into a "S"- show. We need to get back to where Democrats and Republicans will work together.

UNIDENTIFIED MALE: And the White House said that any communications that happened in the White House or during the transition were off- limits.

UNIDENTIFIED MALE: This claim of executive privilege was meant to demonstrate Bannon's loyalty to President Trump.

UNIDENTIFIED MALE: Before the grand jury, he doesn't have that option.

(END VIDEOTAPE)

ANNOUNCER: This is NEW DAY with Chris Cuomo and Alisyn Camerota.

CHRIS CUOMO, CNN ANCHOR: All right. Welcome to our viewers in the United States and around the world. This is your NEW DAY. It's Wednesday, January 17, 6 a.m. here in New York. And here's our starting line.

House Republican leaders are hoping another one-month spending bill will avert a government shutdown this Friday, but they've hit a major snag. Hardline conservatives are balking at the plan, but military funding is what they want more of. Right now, the GOP don't appear to have the votes. That means they would need Democrats. That means DACA might have to be on the table.

The proposed short-term spending bill right now doesn't deal with DACA. That means it would leave the fate of hundreds of thousands of DREAMers in limbo. Some Democrats are demanding that any deal for this Friday has protections for DREAMers. So talks right now, square one.

Once again the president's vulgar remarks about immigrants have emboldened resistance.

ALISYN CAMEROTA, CNN ANCHOR: So this heated battle playing out at a Senate hearing with the homeland security director facing intense questioning about the president's language at that Oval Office. Kirstjen Nielsen insists she does not remember hearing the president use a vulgar term. And Democrats wonder if allies of the president are lying to protect him.

And several developments in the Russia investigation. Sources tell CNN Steve Bannon has been subpoenaed by Special Counsel Robert Mueller to testify before a grand jury. The president's former chief strategist refusing to answer questions from House investigators during a 10-hour interview. Two other Trump associates will appear today before the House Intel Committee.

So let's begin our coverage with CNN's Abby Phillips. She is live at the White House.

Good morning, Abby.

ABBY PHILLIP, CNN WHITE HOUSE CORRESPONDENT: Good morning, Alisyn.

Well, as you mentioned, a couple of big unanswered questions on some legislative priorities this morning. On immigration, the White House is insisting that president, not his staff, is running the show on that issue.

Meanwhile, we're just three days away from a potential government shutdown. And there are no signs that we're any closer to a deal or what the president will support.

As GOP leaders are on the Hill, they have unveiled a short-term spending bill to avert a shutdown by Friday. And that bill includes some provisions intended to get Democrats on board.

(BEGIN VIDEOTAPE)

PHILLIP (voice-over): House Republican leadership now attempting to go it alone to avert a shutdown, deciding their best strategy is to rally support behind another short-term spending bill to keep the government funded for another month.

The problem, the chairman of the conservative House Freedom Caucus says his members are not yet on board, warning that "Currently, just based on the 'no's' and 'undecideds' in the Freedom Caucus, there's not enough support to pass this with GOP only votes." REP. TED YOHO (R), FLORIDA: I hate to have a temporary spending bill.

This is the fourth one since the end of September, first of October. It's crisis management at its worst.

PHILLIP: Republicans hoping to pressure Democrats into backing the short-term fix by attaching the number of incentives to the continuing resolution, including nearly $3 billion to keep the popular Children's Health Insurance Program funded for six years. The proposal would also delay a number of key Obamacare taxes.

Meanwhile, Democrat leadership continuing to push for a deal that would protect DREAMers. In the Senate, Majority Leader Mitch McConnell urging lawmakers not to rush a DREAMer deal, despite the fact that he needs at least nine Democratic votes to stave off a shutdown.

SEN. MITCH MCCONNELL (R-KY), MAJORITY LEADER: It is clear that Congress has at least, at least until March, at a minimum, and possibly even longer, to reach a compromise that resolves the DACA question. There is no reason why Congress should hold government funding hostage over the issue of illegal immigration.

PHILLIP: The cosponsors of a bipartisan immigration bill rejected by President Trump last week expressing frustration at Mr. Trump's sudden change of heart.

SEN. DICK DURBIN (D), ILLINOIS: We call him two days later, Senator Graham and I, and say, "We've done it. We met your criteria. We have a bipartisan bill. We're ready to go." And then to be called into the president's office to explain it to him, and find that we've been sandbagged.

GRAHAM: Yes, I think somebody on his staff gave him really bad advice between 10 a.m. to 12 p.m. on Thursday.

PHILLIP: Both senators grilling Homeland Security Secretary Kirstjen Nielsen at Tuesday's Senate Judiciary Committee hearing about her insistence that she does not recall President Trump using the word "shithole" at last week's Oval Office meeting.

KIRSTJEN NIELSEN, SECRETARY OF HOMELAND SECURITY: The president used tough language in general, as did other congressmen in the room.

PHILLIP: Nielsen's testimony prompting this rebuke.

SEN. COREY BOOKER (D), NEW JERSEY: Your silence and your amnesia is complicity. When Dick Durbin called me, I had tears of rage when I heard about this experience in that meeting. And for you not to feel that hurt and that pain and to dismiss some of the questions of my colleagues, saying, "I've already answered that line of questions," when tens of millions of Americans are hurting right now because of what they're worried about, what happened in the White House. That's unacceptable to me.

(END VIDEOTAPE) [06:05:08] PHILLIP: Well, despite all that fireworks last week, yesterday on the Hill, White House chief of staff John Kelly is going to be over there this morning talking to congressional Hispanic Caucus members about the DREAMer issue.

And remember, John Kelly was in that other Oval Office meeting last week in which there was -- there was a slur thrown around. And he was one of the people convincing the president not to back the Durbin- Graham bill. Where we are expected to see the president also on the Hill today for an event honoring Bob Dole, there are no meetings scheduled at the moment. But all the key negotiators on both the DREAMer issue and on the shutdown will be close at hand, Alisyn and Chris.

CUOMO: All right, Abby. Appreciate it.

Let's bring in CNN political analysts John Avlon and David Gregory.

All right, David, so you have two layers of this. You have do they have enough votes within the GOP to get this done? And there's a sticking point there. And then if they need Democrats, obviously, DACA winds up being the issue there.

So let's start with the first part. The idea that the conservatives aren't happy with the amount of military spending that's in this. They -- they say that the military is at a dangerous disadvantage, and they need at least a full year funded. How big a sticking point is that?

DAVID GREGORY, CNN POLITICAL ANALYST: Well, I think it's big, but I don't think it's insurmountable. I mean, I think that there's going to be enough pressure from leadership, notwithstanding the concerns from House Freedom Caucus members about the crisis nature of this kind of leadership, just short-term fix after short-term fix. I don't think that's insurmountable.

To me, what I'm looking at is whether those who are negotiating over DACA think that there's enough room to give this a little bit more time, to wait another week, to see if there's a potential breakthrough with the administration. To say that the president of the United States has been mercurial on the issue of immigration is -- is an understatement of this new year. So they may want to leave that open a little bit longer. That's what I'm looking at, is those signals, whether they think...

CUOMO: Well, if they leave it open longer, what does that mean, that they don't do the C.R. this Friday? They have to.

GREGORY: They do the C.R. and create more space to negotiate DACA and do something bigger before March, which is what McConnell wants.

CUOMO: But then you have the problem the Democrats won't sign onto that; they want DACA now. They have their own division in the party.

JOHN AVLON, CNN POLITICAL ANALYST: Of course. Of course, this is government by punting. And that's what we've seen since September. Right? But now it's pretty clear that you're going to need a bipartisan margin to do anything. You know, McConnell can't simply rely on herding his cats on the Republican side of the aisle.

So what does that look like? Children's health insurance, is that going to be something that allows the government to go forward?

CAMEROTA: I want to ask you about that.

AVLON: Sure.

CAMEROTA: Because Paul Ryan has sweetened the deal. And it seems like a brilliant chess move. Right? We know Democrats and Republicans want CHIP, the children's health.

AVLON: Yes.

CAMEROTA: Everybody says that that's sort of, like, No. 1 on their to-do list. So he says, "Let's extend it for six years. We won't just kick the can down the road for the -- until the next continuing resolution. We'll extend it for six years."

Is that a sweet enough deal to get Democrats on board?

AVLON: That's a good deal as far as a moral perspective. It is outrageous that Congress has allowed the Children's Health Insurance Program to languish like this. And it would do good for the country. And to your point, it would solve the problem, or at least save it for another six years.

But on Thursday, it looked like there was a DACA deal in the Senate, albeit not the House. And so that sort of sweetened people. And before the president blew it all up.

I personally think that if you have to do a short-term resolution and you can get Children's Health insurance in the balance and then live to fight another day on DACA, that may be the best deal possible. The Democrats are feeling they're pretty flush. For a minority party, they feel like they've got a lot of leverage.

CAMEROTA: Yes, but you can't say, "I'm going to vote against children's health."

AVLON: Well, that's the calculus.

CAMEROTA: You set up the chess move so that you can't -- you can't, as a Democrat, then say that.

AVLON: I know.

CAMEROTA: But it can come back to haunt you.

AVLON: It's cynical. And the strategy is cynical, and the gamesmanship is cynical. It should not have gotten to this place.

CUOMO: David, no Democrats are talking about CHIP right now. That's something that matters. Obviously, it's part of their responsibility. But it's all about DACA.

GREGORY: That's right.

CUOMO: I mean, I've talked to two dozen of them in the last 20 hours. And that's what's on their mind.

But I don't hear anybody saying they can get a deal done in the next few days. And not just because of Trump's mouth, not just because of the politics of immigration, but the practicality. There's too much you'd have to build in.

GREGORY: Right. Which is why you would have to sign on to something short-term again, as they've done time and time again, and then just create more space to go back at this, which is why I think you have to look at the people closest to the negotiation, whether they think there's any potential room here.

You know, it's amazing to look at the short history of illegal immigration and how this has undermined presidents going back to President Bush, who very nearly -- he probably would have had a deal if not for 9/11. And then came back later in the administration and was undermined by, really, conservatives in his own party. So we see this over and over again. Whether it's hardliners on the White House staff who undermined this deal or something else.

But, again, you get something shorter short-term. There's no question that it's cynical. The question is, tumbling into a government shutdown is such a disaster no matter who claims they think that they can blame the other side for it. It's just not something I think if you're really interested in a DACA deal by March that -- that you do.

[06:10:14] CAMEROTA: So Attorney General Jeff Sessions was on TV left night. And, you know, it's telling to listen to his thoughts on immigration. Because they seem to reflect where the president is. And certainly, him talking about African nations. So listen to this.

(BEGIN VIDEO CLIP)

JEFF SESSIONS, U.S. ATTORNEY GENERAL: What good does it do to bring in somebody who's illiterate in their own country, has no skills, and is going to struggle in our country and not be successful? That is not what a good nation should do, and we need to get away from it.

A good debate needs to be happening this year. The president is right on the lottery. That's ridiculous. How absurd is that for a policy for a great nation?

(END VIDEO CLIP)

CAMEROTA: John, that's an awfully narrow view of immigrants. The idea that you're bringing in people who are it illiterate in their own country. I mean, again, he doesn't -- that is an awfully broad brushstroke and, as we learned during the entire African continent being condemned, they -- people who come in are often more educated than Americans, often do better...

AVLON: Yes.

CAMEROTA: ... often have higher graduate degrees. But he doesn't know, he doesn't talk about that part.

AVLON: No. And look, and Attorney General Sessions, who when he was a senator, Stephen Miller, the White House aide, was on his staff, are a big believer in what they call merit-based immigration.

But it is a restriction and redirection. This is not the Emma Lazarus view of "give me your poor, your tired, your tempest-tossed." This is about "give me your skilled, your wealthy, because we need to focus on American jobs and America first and American workers first."

He can defend that all he wants. The problem is the veneer got blown away by the president's comments the other way.

GREGORY: Right.

AVLON: And whether -- this president has an opportunity to do a Nixon in China on immigration and do an art of the deal, which is what he was articulating last week in the cabinet meeting and the lead-up to that meeting, or he can listen to, you know, the -- not the better angels of the administration's nature and blow it all up in favor of arguments that seem like policy but too often mask a degree of racism or racial resentment.

GREGORY: And demagoguery. I mean, let's just remember, in the history of immigration discussions, people like then-Senator Jeff Sessions exploiting this issue to blame people, to blame immigrants for crime and for terrorism.

How many Republicans did you hear after 9/11 who opposed comprehensive immigration reform say that terrorists would be coming through our southern borders to attack the United States?

AVLON: Yes.

GREGORY: Hasn't happened. Because it was just a shameful, fearmongering exercise on the part of opponents of comprehensive immigration reform. Which does not include all Republicans. But it just gets in the way of having what the attorney general says he wants, which is a real debate.

Let's just recognize who we are as a country, where we've come from. And again, as John just said, the president himself has -- has disputed that argument, not just wanting high-skilled workers but talking about a bill of love when it comes to immigration. So let's -- let's just call that out for what it is.

CAMEROTA: OK. John Avlon, David Gregory, thank you both very much for the conversation.

Meanwhile, this story: Steve Bannon refusing to answer questions on Capitol Hill for many hours. Was the president's former chief strategist silenced by the White House? Can he remain silent going forward? We discuss all of that next. (COMMERCIAL BREAK)

[06:17:04] CAMEROTA: Steve Bannon refusing to answer questions from House investigators, prompting a subpoena from the House to compel his testimony going forward in the Russia investigation. Lawmakers on both sides insist that Bannon should be more forthcoming.

(BEGIN VIDEO CLIP)

REP. ADAM SCHIFF (D-CA), RANKING MEMBER, INTELLIGENCE COMMITTEE: We served him with a subpoena during the hearing to convert it from a voluntary appearance to a mandatory one. His counsel then went back to the White House and came back to us with, essentially, the same gag rule from the White House, which is they've been instructed not to answer anything during those time periods.

REP. CHRIS COLLINS (R), NEW YORK: If I was in -- called into a Senate committee to answer questions, I would answer them.

(END VIDEO CLIP)

CAMEROTA: Bannon did acknowledge that he has been subpoenaed by Special Counsel Robert Mueller to testify before a grand jury.

So let's bring back David Gregory. And joining us is Michael Zeldin, a CNN legal analyst and Robert Mueller's former special assistant at the Department of Justice.

Michael, it's great to have your expertise here with us. How could he get away with 10 hours of questioning and not being forthcoming and not answering it, and does a subpoena change all of that?

MICHAEL ZELDIN, CNN LEGAL ANALYST: Well, so, with respect to the House Intelligence Committee, Bannon asserted, essentially, executive privilege as ordered by the White House. And that included the period of the transition, the period while he was in the White House, and the period after the White House firing. The breadth of that is pretty staggering, because typically, the executive privilege is only applicable to conversations during your tenure in office. So that has to get sorted out.

With respect to Mueller, it's a whole different ball game. There's no way that Steve Bannon is going to get away with asserting executive privilege on behalf of the president in that broad -- in those broad terms. He will be taken to court and ordered to answer those questions for the period at least during the transition and after he left the White House and probably, because I expect that a lot of conversations they want to have do not involve policy deliberations during his time in the White House. And that's why Mueller has subpoenaed him, so they can take him to court to enforce the questioning.

CUOMO: I mean, look, it's interesting politically and legally, David, obviously. This is being played as a loyalty test for Bannon. I was actually surprised that he complied with the White House counsel. He went there voluntarily to speak. He did answer their questions. And then, supposedly his counsel had gone to the majority. Another problem with this committee. His lawyer went to the majority, the Republicans, and said, "He's not going to talk about these things." They never told the Democrats. So Schiff and all those guys were surprised by this.

But it raises a political question of what happened to the White House saying "We'll fully cooperate. There's nothing to see here. Ask whatever you want"?

GREGORY: Well, I mean, I think they would argue that -- that the assertion of executive privilege is bigger than that, right? You're protecting the office. You're protecting private communications. We've seen this in fight after fight over executive privilege.

[06:20:05] But I think the real game here is what the special counsel is doing and the fact that there's been a subpoena there and that we know what Bannon has said in this book, in the Michael Wolff book, and in countering the president, objecting to the firing of Jim Comey, saying what a terrible decision that was. So we know that this is going to hit some of the areas that Mueller is looking at, namely obstruction of justice and how the president was handling this investigation.

And I think it's important to point out that, even as flawed as Bannon might be as a witness, even though he may have secondhand information, he was there. He's privy to conversations. And we don't know the full scope of what Mueller has in terms -- from other witnesses about potential obstruction of justice, meetings, contacts with Russians during the campaign that he can corroborate from other witnesses as somebody who is high up in the campaign, who is close to the president. So he becomes highly unpredictable and a pretty dangerous witness potentially.

CAMEROTA: Michael, here's what's happening today. Rick Dearborn, a former -- sorry, White House deputy chief of staff, and Corey Lewandowsky, the former Trump campaign manager, are going before the House Intel Committee. And then later this week, Hope Hicks, who really knows everything. I mean, she has been with the president before he was ever a candidate, while he was a candidate, now in the White House she's the communications director.

So can't they all do the same thing that Bannon did?

ZELDIN: Well, we have to remember, it's not Bannon who did this.

CUOMO: Right.

ZELDIN: According to Bannon's lawyer, the White House directed him not to answer these questions. So it's the White House who is doing it. Bannon is just the witness. If the White House asserts privilege, especially with the breadth that they asserted in Bannon's case, then this is going to be problematic for the committees. If they do it or try to do it before Mueller, I think Mueller's going to seek to enforce that subpoena in court and make them answer questions.

And if they hold fast to this strategy, I think it will be another brick in the obstruction of justice wall that Mueller will consider with respect to this White House.

So I think all of these people are, you know, sort of pawns in the game to a certain extent that the White House now seems to be beginning to play. We saw this play out a little bit when the president first said 100 percent he'll testify before Mueller back in June. And then at Camp David this past weekend he said, "Well, maybe." And now he's saying there's really probably not going to be any need. Now he's instructing witnesses to invoke executive privilege, I think spuriously.

So there's a change here in some respect. And we'll have to see how it plays out.

But we have to remember, as David said, Mueller holds all the keys. And they don't have the same prerogatives before Mueller.

CUOMO: Right. Let's talk about that, Michael. I mean, clearly, if nothing else, this shows that the White House isn't helping get this over any time soon. Because this is going to have to play out.

But it's very different when Mueller sends a subpoena than when the committee does. It says something good and bad. Right? I mean, on the good side, if you're Bannon or his counsel, if you're a target of an investigation, you don't usually get subpoenaed this way. There's a pretty narrow breadth of when the special counsel will send a subpoena to someone who's a target. So that's kind of good.

But on the bad side, if he wants to put you in front of the grand jury, you're going to have to go. The privilege won't hold.

ZELDIN: Well, that's right. I mean, well, there is an executive privilege that can be asserted. Nixon tried it and failed in the face of a grand jury...

CUOMO: Right.

ZELDIN: ... investigating criminal law violations.

CUOMO: Right.

ZELDIN: Espy did it. They tried to do it with respect to Espy and his communications when he was secretary of agriculture under an independent counsel investigation. So there are a few opportunities for them to legitimately assert it. But I don't believe it was legitimately asserted in this case. And I think Mueller has subpoenaed Bannon, essentially to put the marker down in the sand to say, "We are not going to tolerate this sort of behavior in our grand jury."

GREGORY: Let's just point out, too, that Bannon knows what he knows, right? And he may be -- he may have credibility problems. But he is in a rather unique place right now. I mean, he is totally out in the wilderness and has been trashed by this White House. And he's trashed people within the White House and -- and pushed out of Breitbart. So he's an unpredictable figure who doesn't have a lot of alliances left here, though he says that he's still loyal to the president. CUOMO: Well, he showed that. He didn't have to listen to this,

David.

GREGORY: Yes, right. Right. But he still -- but he still knows what he knows. And he hasn't held back so far on saying what he knows and his opinions about what went down in terms of contacts in the campaign and then the decision to fire Comey. So there's no question that he could do a lot of damage here.

CAMEROTA: Maybe they should call in Michael Wolff and have him ask the questions at some of these -- at some of these House intel panels. Because he seemed to get a lot out of Bannon.

Last word, Michael?

ZELDIN: Yes, I want to add one thing, which is that Bannon said in the Wolff book that there is, as far as he's concerned, a big money- laundering problem for the Trump financial empire.

[07:25:09] That money laundering problem is that of the relationship between the Trump Organization and Russian oligarchs and perhaps organized crime. There is no privilege that protects that conversation. And so Mueller may use Bannon on the money laundering investigation, as well as these other things that David Gregory has properly pointed out.

CUOMO: All right. Michael, David, thank you very much. Appreciate it.

GREGORY: Thanks.

CUOMO: One of the chief critics of Special Counsel Bob Mueller is Ohio Congressman Jim Jordan. He is also an example of the hardline conservative resistance to the continuing resolution. So tonight, we're going to attack where the resistance is coming from on getting anything done on DACA and the budget. So you have Jordan on the right and you have Democratic Congressman Keith Ellison, who is very hard line on getting DACA done. So we'll test both sides tonight, 9 p.m. Eastern.

CAMEROTA: So after a federal judge ruled the White House cannot end the DACA program, the Justice Department, in a rare legal maneuver, is taking the fight to the Supreme Court. All of those details next.