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New Day Saturday

Federal Judge Strikes Down Obamacare; Mick Mulveny to Become Acting Chief of Staff; Michael Cohen Likely to Spend His Sentence at Otisville Prison; Johnson & Johnson Baby Talc Powder Contains Cancer- Causing Toxic Asbestos; Westbrook Involved in Shoving Match; "Love, Gilda" to Air on CNN. Aired 6-7a ET

Aired December 15, 2018 - 06:00   ET

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

[06:00:00]

(BEGIN VIDEO)

UNIDENTIFIED FEMALE: Ho, ho, hey, hey, Obamacare is here to stay.

BARAK OBAMA, FORMER PRESIDENT OF THE UNITED STATES: If you like your doctor, you will be able to keep your doctor, period.

UNIDENTIFIED MALE: The law that brought health care to millions of Americans has been struck down by a U.S. Judge.

UNIDENTIFIED MALE: It's troubling for 130 million Americans with pre-existing conditions.

UNIDENTIFIED FEMALE: Liberty, yes, Obamacare, no.

UNIDENTIFIED MALE: The first order of business is to repeal and replace Obamacare.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: People are hurting. Inaction is not an option.

(END VIDEO)

ANNOUNCER: This is "New Day Weekend" with Victor Blackwell and Christi Paul.

VICTOR BLACKWELL, CNN HOST: Good Saturday morning to you. We're starting with this dramatic ruling that could affect the future of health care coverage for millions of Americans. A federal judge in Texas has struck down Obamacare.

CHRISTI PAUL, CNN HOST: He asserts that the key part of the law - the individual mandate is unconstitutional and according to his ruling, that includes the rest of the law that he says it cannot stand without the mandate. So the entire Affordable Care Act itself must fall.

BLACKWELL: So attorneys general in several states are already preparing their appeals while others are cheering this decision along with the White House. There is happening on the same day as the year's Obamacare signup deadline; it ends at midnight in most states.

PAUL: An important point we need to make here. The judge did not block the law. What does that mean for you? It means that you can still sign up. More than four million people have already done so this year but now the future of where it goes is what's uncertain.

(BEGIN VIDEO)

DAVID KATZ, FORMER ASSISTANT U.S. ATTORNEY: What just happened now is not going to be the last step, but it's a troubling first judicial step. It's troubling for 130 million Americans with pre-existing conditions. It's very disturbing to 12 million people who are on Obamacare as of 2018.

(END VIDEO)

BLACKWELL: Now you'll remember that Obamacare was upheld by the Supreme Court. That was in 2012.

PAUL: We're going to talk about why this ruling's different from that one in a minute. First, though we do want to start with reaction to the ruling from the White House. CNN White House Reporter Sarah Westwood joining us live. Good morning Sarah, what are you hearing there?

SARAH WESTWOOD, CNN WHITE HOUSE REPORTER: Good morning Christi and the White House is taking a victory lap after the judge's ruling invalidating basically all of Obamacare. The president saying that he's been claiming all along that Obamacare was unconstitutional, tweeting last night, "As I predicted all along, Obamacare has been struck down as an unconstitutional disaster. Now congress must pass a strong law that provides great health care and protects pre-existing conditions. Mitch and Nancy, get it done." Referring to Senate Majority Leader Mitch McConnell and soon-to-be the likely House Speaker Nancy Pelosi.

Now Pelosi responded with a statement of her own claiming that the ruling will be immediately appealed and that this is a step back for healthcare. She said in a statement, "While the district court's absurd ruling will be immediately repealed, republicans are fully responsible for this cruel decision and for the fear they have struck into millions of families across America who are now in danger of losing their health coverage. When House democrats take the gavel the House of Representatives will move swiftly to formally intervene in the appeals process to uphold the lifesaving protections for people with pre-existing conditions and reject republicans' efforts to destroy the Affordable Care Act."

Now as you mentioned, this was a case that was brought forward by nearly two dozen republican state attorneys generals and governors seeking to base their case on changes to the individual mandate that were included in the 2017 tax bill. Now the Trump Administration wasn't directly involved in the case, but as far back as June they said that they were not going to defend parts of Obamacare in court and the president said as far back as last year that republicans were content to let the Affordable Care Act fail and then hopefully the failure of the health care markets and the Medicaid expansion would push democrats to the negotiating table as they were trying in what was ultimately an unsuccessful attempt to repeal Obamacare legislatively.

Now of course the next steps appear unclear because, again, that appeal is coming to California. Democratic state attorney general is prepared to appeal the ruling, and it stands today, but Victor and Christi, the White House certainly counting this as a victory in their long quest to end Obamacare.

BLACKWELL: Of course the question is, what is next? Sarah Westwood setting the table for us there at the White House. Thank you so much.

PAUL: Now it's important to remember why the Affordable Care Act is such landmark legislation and where it launched this fight that obviously is continuing into this morning. It changed the game for insurance providers. They could no longer reject applicants who had prior health conditions or give them high-priced plans with limited coverage. It allowed millions of imperfect health records to get insurance. But it also pushed up premiums for the young people, for those who are healthy and it added a tax penalty if you did not have health care.

[06:05:00]

That is what was zeroed out this year by Congress and provided the opening for the ruling we're talking about this morning.

BLACKWELL: All right, so many questions raised by this ruling. Let's get some answers now with CNN Legal Analyst Joey Jackson and Daniel Littman, Political Reporter and co-author of "The POLITICO Playbook." Gentlemen welcome back to "New Day" and Joey, let me start with you. Explain for us how this judge, Judge O'Connor in Texas can say that the individual mandate is unconstitutional, the rest of the law is invalid but nothing changes in the short term.

JOEY JACKSON, CNN LEGAL ANALYST: So good morning to you, Victor. So sommething very important to understand -- remember the law, let's take a quick walk back. In 2010 the laws passed, Affordable Care Act. You might remember then in 2012, based upon challenges, we had a Supreme Court decision which upheld the law. So the critical question is on what basis did they declare the law unconstitutional when was assailed and attacked by republicans as being unconstitutional? There were two critical issues that need to be explained. Number one, the first issue was should the law be sustainable under something called the interstate commerce clause? That is that Congress has the power to regulate interstate. Right? They are the federal government.

The Supreme Court said no. On that basis, you can't regulate inactivity. That is the fact that you're imposing an individual mandate, right, you're forcing people to get insurance. You're not going to regulate inactivity unconstitutional. However, the law was upheld on the basis that the Congress has the power to tax. And as a result of that, you can tax people, Congress does that all the time, right, so as a result of that the law was declared constitutional on that basis. Now moving forward, last piece, that's this -- so how this different?

It's different inasmuch as what the republicans did was they defunded it. What they said was that we're going to declare the tax as zero and if the tax is zero, Congress is no longer taxing. If Congress is no longer taxing, how could you now have the law declared constitutional on tax grounds when Congress is not imposing a tax? And so this judge said that on that basis, the law will be deemed unconstitutional since the law is tethered to the tax and to the extent that there is no tax, it's not tethered to that, therefore it's not constitutional but we're not going to do anything right away.

That's where we are now. I suspect there will be appeals. It's the fifth circuit, and it will go all the way to that place we call the United States Supreme Court.

BLACKWELL: And that's where I want to go with you next. First let me get Daniel in here. That's the legal element. Let's talk about the political. The most recent public polling on the affordable care act, also known as Obamacare, shows it's more popular than ever. That's from fox news before the election, 54% favorable, 43% unfavorable. What does this mean for the white house that's cheering this decision? The Republican Party that's tried to repeal it with those numbers as context.

DANIEL LITTMAN, POLITICAL REPORTER AND CO-AUTHOR OF "THE POLITICO PLAYBOOK": Yeah, those numbers have stayed steady or even increased as Americans with pre-existing conditions have gotten coverage and have not been blocked anymore from getting coverage. When it's a very personal issue so when you see your friends or family members get denied healthcare because they have an illness, that really strikes at your heart of your livelihood. So that's one reason why it's so popular.

But Americans haven't always understood that that is a big part of Obamacare. They have wanted to keep the pre-existing conditions part without actually the whole law. For the White House, that means that the political headwinds are in, you know, against them. And democrats were very successful in running in defense of the law just a month and a half ago. So this judge basically says Americans, what they thought of Obamacare and helping democratic candidates win who ran on it, that doesn't matter, let's just look at the strict legal definition.

BLACKWELL: Yeah. Joey, you brought up the Supreme Court here. What does - at that point Scalia was on the court, Kennedy was on the court. You've now got Gorsuch and Kavanaugh. What does this new make- up of the court portend for the law as it approaches the Supreme Court, which everyone says it or expects it will go there?

JACKSON: Yes, I certainly believe it will. So what happens is that this, remember just to put in perspective is one Federal District Court Judge in the Fifth Circuit. It's not uncommon for there to be splits in circuits, that is disagreements between judges, not everyone agrees. But to the core question, that split, we know this is, we should say, a republican judge. And again, I know the issue, there's no republican judges, no democratic judges, but just to be clear, there are ideologies. And with ... BLACKWELL: Conservatives.

[06:10:00]

JACKSON: ... regard to the judge's ideology, he's conservative, exactly. Appointed by George W. Bush and so what will end up happening is that as a result of the challenges, it will end its way to the conservative - you said it Victor - court which is the Supreme Court of the United States and that will have an effect upon a whole host of issues and we know that this bill, right, or I should say the law that was passed savaged by the republicans. In fact, the plaintiffs in this case who brought forth the lawsuit that we're speaking about this morning, right? Twenty different republican Attorneys General from various states, so I think when it does get to the United States Supreme Court, based upon the conservative bent of the court, it may have some problems.

BLACKWELL: Daniel, to you and what the democrats will do. And Nancy Pelosi says that democrats will intervene as they get control of the House. What are their options here?

LITTMAN: They don't have that many good options. Because although Trump said Chuck and Nancy, or Mitch and Nancy, get it done, Pelosi doesn't want to basically give in and say well this judge's ruling is going to stand. Democrats hope that John Roberts will continue to protect the law and even people who have -- legal experts who challenged the law in the past; they were reacting and said that John Roberts would not look favorably on this judge's ruling because it kind of said that what he decided was completely wrong.

And so I can expect democrats in the House to continue passing laws to protect Obamacare, but with the Republican Senate it doesn't matter that much because McConnell is not going to go through with it. But it it's going to be a potent talking point, and democrats can point to what they do in the House and say, "Well, we're not just doing investigations of the Trump Administration. We are helping people's health care, as well."

BLACKWELL: The president tweeted out, "Mitch and Nancy, get it done." Republicans couldn't do it when it was Mitch and Paul trying to get it done. We'll see how productive they'll be now. Quickly to you, Joey, on this element - severability which means the judge said in this case that the individual mandate was unconstitutional but because he could not sever just that part from the larger law, that he had to deem the entire law invalid.

JACKSON: That's right.

BLACKWELL. The - the democratic attorneys general who argued against the case, the lawsuit, said that it could have been severed. Where are you on that point, and where do you expect democrats will be as they try to preserve the rest of the ACA, independent of the individual mandate moving forward?

JACKSON: That's a bombshell question, Victor and an essential one. The question of severability is and what this judge answered was can you separate, that is take out one portion of the law, but yet allow the law in its entirety to be declared valid. This judge said no. I think there's certainly an argument to be made that that's not the case.

However, understand to what I started off at the beginning. To the extent that the Supreme Court said that you can have this Affordable Care Act because what you're doing with the individual mandate is you're mandating people get insurance or else their taxed. What the Supreme Court did was made it one and a whole, saying that because a tax is tethered to the law, the Congress is exercising its proper ability and, therefore, it's constitutional.

I think the severability question is where the fight will ensue. I do think there's a good argument as to it being severable and the law still remaining constitutional. I think the problem that you're going to have is the question you asked me before Victor, as it relates to the Supreme Court. Very conservative. And as we know, you know what, lawyers will disagree, and lawyers' reasonable minds can disagree depending upon your ideology. We know what the ideology of the Supreme Court is now and I think as it relates to this law, republicans hate it, democrats think it to be essential and we've already talked about, and Daniel has in terms of the impact in the midterms and what the democrats have done quite successfully I think in arguing that the law is very important and affects so many Americans.

BLACKWELL: All right, Joey Jackson, thank you so much for the analysis and explaining this as it came out late in the evening. Daniel Littman, stay with us. We've got more to talk to you about.

JACKSON: Thank you Victor.

PAUL: So I know a lot of you are think, well, I signed up for this, now what does it mean for me? Hopefully you got answers there. For those of you considering it, there are thousands across the country who are still signing up for Obamacare, at least 4.1 million people have already done so. They've selected their plans for 2019. Newly released -- newly released federal numbers shows the number of first- time applicants is down nearly 18 percent; those returning down less than 6 percent. A lot of factors could explain the drop in signups here. The Trump Administration cut the enrollment period in half, slashed the advertising budget by 90 percent. Also they've made it easier to buy cheaper alternatives and there's no longer the fine for, of course, not having insurance.

[06:15:00]

BLACKWELL: So we'll talk more about what this means and what's expected from this ruling from this judge in Texas throughout the morning. But let's talk about something else. This week of -- let's call them what they were -- rejections. President Trump now has a Chief of Staff, at least on an acting basis. How Budget Director Mick Mulvaney ended up getting the job that it seemed no one wanted.

PAUL: And a China correction has investors worried about a global slowdown. And that the president's trade war could be hurting your wallet. (COMMERCIAL BREAK)

PAUL: So Special Counsel Robert Muller's team is slamming a suggestion by Michael Flynn's lawyers now.

BLACKWELL: Here's CNN's Pamela Brown.

PAMELA BROWN, CNN CORRESPONDENT: Well the special counsel is pushing back at Michael Flynn's lawyer's assertion that the former National Security Adviser wasn't appropriately warned about the repercussions of lying to the FBI. In this new filing, Mueller's team says Flynn chose to lie weeks before the FBI interviewed him by claiming he did not discuss sanctions with the Russian Ambassador, Sergey Kislyak.

Now Mueller's team made the case that his false statements were quote, "voluntary and intentional"

[06:20:00]

and noted that the FBI gave him multiple opportunities in the interview to correct his false statements, and he only did so once the FBI used the exact language that he had used with Kislyak from that phone call. While the filing notes the FBI didn't think that Flynn was being intentionally deceptive at the time, it does say he should know better that lying to the FBI is a crime and he shouldn't have to be warned about it and what also stuck out to me is that the documents say Flynn told then Deputy Director Andy McCabe before the FBI interview that McCabe probably knew what was said in his conversation with Kislyak so it's unclear why Flynn would proceed to make false statements in his FBI interview if he thought they did know the truth. Pamela Brown, CNN, Washington.

BLACKWELL: Pamela, thank you. President Trump is almost wrapping up the end of his second year in office, and there are more than a half dozen investigations. We don't actually know how many there are because some may not be open or available or announced to the public.

PAUL: But this is what we know is being investigated: the Trump Organization, the Donald Trump Foundation, the Trump campaign, the Trump inauguration, the Trump transition, and the Trump Administration, all under investigation. And now CNN has learned Special Counsel Robert Mueller still wants to speak in person with President Trump about obstruction of justice; his lawyers, however, adamant that that cannot happen.

The president previously answered written questions, remember, from the special counsel. Trump's attorney, Rudolph Giuliani, tells CNN they are against it because they don't trust Mueller. The president announced last night on twitter, "Mick Mulvaney will become Acting Chief of Staff at the end of the year."

BLACKWELL: Now Mulvaney will not resign from his current position as the Director of the Office of Management and Budget. As CNN's Kaitlan Collins explains, his appointment puts an end to several days of confusion after the president's top pick turned down the job. KAITLAN COLLINS, CNN CORRESPONDENT: President Trump announced on twitter late Friday night that Mick Mulvaney, the White House Budget Director, will become the Acting Chief of Staff when John Kelly, currently the Chief of Staff, leaves at the end of the year. Now that word "acting" came as a surprise to most people in the White House since that was the word that led to the failure and breakdown in negotiations over Nick Ayers, Vice President Mike Pence's Chief of Staff, becoming John Kelly's replacement and becoming the Chief of Staff here in the West Wing.

President Trump told Nick Ayers he wanted a two-year commitment and didn't want someone to be the Acting Chief of Staff; yet now he has got an Acting Chief of Staff. However, all of this comes down to timing because on Friday President Trump was discussing the possible government shutdown next week, and so was the senior staff throughout the day. And Mick Mulvaney, the Budget Director, came to the White House to sit down with the president, go over what would happen during the shutdown, and discuss it with him and he walked out with the top job.

Now it's a question of how long Mick Mulvaney is going to be in this position. This position is coming with quite a list of challenges, as we are seeing the number of investigations surrounding President Trump and aspects of not only his political but his personal life start to mount up. That is a job that Mick Mulvaney will take over at the beginning of the year. Kaitlan Collins, CNN, the White House.

PAUL: Kaitlan, thank you so much. Now like many republicans, the president's new acting Chief of Staff didn't necessarily have kind words for him before the 2016 election. Overnight video surfaced of Mulvaney was taken a week before Election Day in 2016. In it, Mulvaney explains why he reluctantly was supporting now-President Trump. Take a listen.

(BEGIN VIDEO)

MICK MULVANEY, BUDGET DIRECTOR OF THE UNITED STATES: Yes, I'm supporting Donald Trump. I am doing so as enthusiastically as I can even though I think he's a terrible human being. But the choice on the other side is just as bad.

(END VIDEO)

PAUL: The White House didn't respond to a request for a comment from "The Daily Beast" but we've reached out as well. We're waiting for a response from the White House. We want to get back to Daniel Littman, political reporter and co-author of "POLITICO Playbook." So he says he thinks he's a terrible human being. How does a man who thinks the president is a terrible human being serve said human being?

LITTMAN: A great question. He is emblematic of a number of republicans, basically almost the entire party that have shifted from being anti-Trump early on in the process and during the 2016 campaign to getting co-opted to become the Party of Trump. And so you look at Rick Perry and Kellyanne Conway, and they've both said critical things about the president and when you talk about when they were snapping up the agencies in the White House they were looking at everyone's tweets. Were they pro-Trump? Did they say anything wrong? Did they favor anything that was suspect? And if you did any of that then you were out if you were a lower-level staffer. I guess that is not applying to the senior ones.

[06:25:00]

PAUL: Okay. I want to ask you about the hierarchy here. You had the Vice President's Chief of Staff, Nick Ayers, who was first choice, who declined the position. Republican Congressman Mark Meadows, Chris Christie, both asking to be out of the consideration here. How unusual is it for this many people to say I don't want to work in the White House?

LITTMAN: They look at Reince Priebus and John Kelly and the tough jobs that they had and it's a tough job in any White House, how they were undermined by the president on a consistent basis, and you think to yourself, why would I want to do this. Even though it's a very prestigious job, it's under Trump. He is his own Chief of Staff so he doesn't need someone to run around and do the work of the actual Chief of Staff. And John Kelly was not able to stop Trump from tweeting things that were -- that led to countless firestorms. And so people who are saying they think to themselves this is not the road I want. And so that's one reason that Mick Mulvaney is Acting Chief of Staff. I think that he would rather stay as OMB Director or wants the Commerce Department, that's what everyone says in Washington if Wilbur Ross leaves.

PAUL: Well, I have -- I have literally five seconds. I want to ask this -- he is still going to be the Director of the OMB. Is there clarity as to whether he's being paid for both positions?

LITTMAN: So we don't know yet but the (inaudible) is going to be the takeover of the day-to-day operations and - so yes, that's how we see it.

PAUL: All righty, so Daniel Littman, we appreciate it so much. Thank you.

LITTMAN: Thanks.

BLACKWELL: We've got more on the breaking news this morning. A federal judge strikes down the Affordable Care Act and millions of Americans unclear on the future of their health care coverage. More on what this means for those covered by Obamacare.

(COMMERCIAL BREAK)

[06:30:00]

BLACKWELL: Millions of Americans are waking up this morning with the future of their healthcare coverage in limbo. Last night a federal judge in Texas struck down the Affordable Care Act also known as Obamacare. That judge ruled the ACA's individual mandate is unconstitutional. PAUL: That mandate required all individuals to have insurance and

would fine those who did not. Former U.S. Attorney David Katz explains it like this.

(BEGIN VIDEO)

DAVID KATZ, FORMER U.S. ATTORNEY: The argument goes like this -- the Supreme Court ruled 5-4 that the ACA was constitutional. Five justices were willing to say, including Chief Justice Roberts that it was okay as a tax. That's the individual mandate was a tax. If you didn't buy the insurance, you had to pay a tax, and that was within the taxing power of the United States federal government. As of next year, there is no more individual mandate. That was what the republicans put in the new ACA.

(END VIDEO)

PAUL: This doesn't mean you cannot still sign up for Obamacare. The law is still in effect. We want to make sure that that's known. This morning marks the final day though to enroll in the plan in order to be covered for 2019 so you have to sign up today by 11:59 tonight.

BLACKWELL: Okay.

PAUL: President Obama campaigned on reforming health care, of course, in America. In 2010 the Affordable Care Act was signed into law. It is widely seen really as his signature policy issue.

BLACKWELL: President Trump ran on repealing and replacing that law. His strongest effort was shut down by Senators, specifically John McCain, in July of 2017. It was the thumbs down that you saw there. Here's a brief history of Obamacare.

(BEGIN VIDEO)

OBAMA: If you like your doctor, you will be able to keep your doctor, period.

(APPLAUSE)

If you like your health care plan, you will be able to keep your health care plan, period.

REP. NANCY PELOSI, (D) CALIFORNIA: On this vote, the yeas are 220, the nays are 211. The bill is passed.

(APPLAUSE)

OBAMA: Today after almost a century of trying, today after over a year of debate, today after all the votes have been tallied, health insurance reform becomes law in the United States of America.

UNIDENTIFIED FEMALE: Liberty, yes, Obamacare, no. Liberty, yes, Obamacare, no.

UNIDENTIFIED FEMALE: Hey, hey, Obamacare is here to stay! Ho, ho, hey, hey, Obamacare is here to stay!

MIKE PENCE, VICE PRESIDENT OF THE UNITED STATES: The first order of business is to repeal and replace Obamacare.

REP. PAUL RYAN (R) WISCONSIN: We came very close but we did not get that consensus. That's why I thought the wise thing to do is not proceed with a vote.

TRUMP: People are hurting. Inaction is not an option. And frankly, I don't think we should leave town unless we have a health insurance plan.

UNIDENTIFIED MALE: On this vote, the yeas are 45, the nays are 55, the Amendment is not agreed to.

(END VIDEO)

PAUL: All right still to come, steak dinners, movie nights, Bocce ball. Apparently that's part of the lifestyle President Trump's former fixer Michael Cohen may have behind bars. More on that ahead.

(COMMERCIAL BREAK)

[06:35:00]

(BEGIN VIDEO)

COHEN: It's never good to be on the wrong side of the President of the United States of America. But somehow or another, this task has now fallen onto my shoulders, and as I also stated, that I will spend the rest of my life in order to fix the mistake that I made.

(END VIDEO)

BLACKWELL: That was the president's former personal attorney and fixer Michael Cohen. You'll remember this week he was sentenced to three years in prison. He also said he'd be - he'd been living in a personal and mental incarceration under President Trump and that he's looking forward to getting his freedom back.

[06:40:00]

PAUL: Well FCI Otisville is a minimum security facility "Forbes" magazine once named one of America's cushiest prisons. It is the facility that the judge in this case is recommending. We understand there are on the menu rib steak, smoked oysters. We have former Deputy Warden of the New York City Department of Correction Ed Gavin with us now to help understand what life will be like for Michael Cohen behind bars. Thank you so much Ed for being with us. We appreciate it. So, help us understand what life day in and day out, daily life, would be like for him if he does go to Otisville.

ED GAVIN, FORMER DEPUTY WARDEN OF THE NEW YORK CITY DEPARTMENT OF CORRECTIONS: Well obviously Otisville is a minimum security; they have what they call a minimum-security prison camp. At that camp, I believe the census, the population, is somewhere about 110 inmates. So it's basically, I would call it Camp Cupcake. It's not like Rikers Island. It's not like Pelican Bay in California or Attica.

I mean to me it's just like a super sweet place. He's going to do very well there. I know also that it caters to a lot of the Jewish inmates. They have special meals for the Jewish faith. So that will be good for him because I know he practices his religion so he'll be able to take part in the religious - exercising his religious beliefs but it's not going to be like a typical state prison environment. He's not going to have to worry about sexual assault, violence, getting stabbed or slashed. You know it's a nice place to be. I mean he's arguably the most high-profile white-collar non-violent felony offender that's going to ender the Federal Bureau of Prisons so they're going to have to really keep a close eye on him. I mean he was the president's attorney.

I believe he's still going to be cooperating with Team U.S.A. so I don't even think - me personally, I don't even think they're going to put him in federal prison. I think they're going to do with him like they did John Dean back in the Watergate days, have the U.S. Marshals take him to like a safe house and keep him there so he can cooperate because I don't think t hey want to have him comingled with other prisoners even if they're minimum security prisoners because you don't want to have these guys talking to him and then word getting out that these inmates are talking to him and things can get mucked up so I think they're going to probably not even put him in prison. That's my opinion.

BLACKWELL: Ed, I'd have to say this is the first time I've heard anybody describe a federal facility prison as super sweet. So that's a first for this show and that I've heard. But let me also ask you about the choice of Otisville because there's some analysts who believe that as you suggested here, as he continues to cooperate, that they chose a facility in New York so that it would be easy to get him back and forth. Do you think that specifically was why they chose if not Otisville specifically but in -- so close to New York City.

GAVIN: Well, I don't know who he's cooperating with. If he's cooperating with the Feds in the Southern District, that would make sense but if he's cooperating with Mueller's investigation in the D.C. area, I would think they would want to have maybe somewhere in Maryland like Cumberland. So I - I really don't know but I don't think they're going to want to comingle him at this point. I think he's going to be the MVP to Team USA. They're going to want to keep him happy and they're going to want to have him cooperate. I mean, you know, they want to line him up with David Pecker and Alan Weiselberg and they want - they want to make him a good witness. He's really, when you think about it, he's really a -- what's the word I want to say?

PAUL: If he is going to be taken care of, is that it? I'm wondering at the end of the day, who makes the decision? This is a suggestion by the judge, but that isn't the end all, be all. Who makes the decision as to where he'll end up?

GAVIN: The judge can make the recommendation but the Director of the Federal Bureau of Prisons are going - the Director of the Federal Bureau of Prisons is going to make that decision in all likelihood. BLACKWELL: All right Ed Gavin, thanks so much for being with us.

PAUL: Appreciate it Ed.

GAVIN: Thanks for having me.

PAUL: It was a roller coaster week on Wall Street if you've been watching your funds, I don't need to tell you that right? It ends with a big dip. Why does this matter? What should you know. We're going to talk about that. Stay tuned.

(COMMERCIAL BREAK)

[06:45:00]

BLACKWELL: A new report says Johnson & Johnson hid a damning fact from customers and government regulators for decades, that its bestselling baby powder contained cancer-causing toxic asbestos.

PAUL: Yes, a Reuter's investigation found executives, scientists and others at Johnson & Johnson undertook a massive effort to mask the problem and keep you and the government in the dark. Courts compelled the company to disclose the new evidence. We're talking about thousands of pages of internal memos and reports to do so in response to a class-action lawsuit. So investors moved quickly to shed the stock on Friday, wiping out close to $40 billion in Johnson & Johnson's market value -- $40 billion.

BLACKWELL: Yes and the company's tumble was part of a wild ride. You saw it from Wall Street this week. It ended with the dramatic sell-off yesterday. The big question heading into the holidays is, is the market's mood a sign of recession around the corner?

PAUL: Here's Alison Kosik with more.

ALISON KOSIK, CNN CORRESPONDENT: Hi Christi and Victor, good morning. It was another week of volatile trading, something that's become the new normal on Wall Street. The S&P 500 is on track for its worst quarter since 2011. A Bank of America-Merrill Lynch report shows investors pulled a record $39 billion from global equities over the past week. That includes $28 billion that came out of U.S. stocks which is the second highest on record. The biggest concern weighing on stock traders, the unresolved trade situation between the U.S. and China and the mixed messages coming out of the White House.

(BEGIN VIDEO)

PETER TUCHMAN, QUATTRO SECURITIES: To me the most significant thing is that I think the incoherent trade policies that's coming out of the White House is causing a little anxiety from the institutional trader and the retail trader. So if you're buying stock on fundamentals, if the portfolio managers are doing their homework and they're buying stocks for the right reasons and you can turn around and a headline or a tweet can come out and can dislocate your position, then you're going to be anxious.

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KOSIK: And then there's the domino effect of how tariffs are affecting the world's second biggest economy. China reported weak economic reports that deepened worries about how tariffs are hurting growth, and that's just reinforcing fears that economies around the world are slowing down, which is the other reason for the volatility that's been plaguing the markets.

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KEITH BLISS, CUTTONE & COMPANY: I'm not in the camp yet to say that oh my gosh the U.S. is tipping over but if you follow the data and followed those distinct data points that we get every week when we take a look at that, something is clearly happening of a bit of a slowdown. Again, it's not enough to really alarm me at this point in time, but the other problem that people have with the U.S. market right now is that if we start follow the trail of breadcrumbs on the economic data points and the Fed is still going to raise rates next week which the market is expecting, do we get to the point where the market says we've got a policy mistake?

KOSIK: The federal reserve on Wednesday is expected to hike interest rates and when Fed Chief Jay Powell holds his press conference, investors will be listening very closely to what he says about what the Fed will do in 2019. Christi and Victor, back to you.

BLACKWELL: All right Alison, thanks so much. Hey Christi gave me my Christmas gift this morning and it came in a burlap bag and I saw it and thought she gave me coal for Christmas. Have I been that bad? It wasn't. It was actually something great. It was this nice Ugg throw and an inflatable mattress for my office for when I want to take a nap.

PAUL: Because we work really hard here. I promise we do.

BLACKWELL: Very long hours. But you know, I didn't get cold but we know there's one NBA star who is going to get some coal this Christmas. Vince Celini is here.

VICE CELINI, CNN SPORTS CORRESPONDENT: Wow. Russell Westbrook goes hard all the time and maybe he was a little bit naughty this time. When push came to shove, Russ never backs down even with Santa making the rounds and maybe getting inflatable mattresses for people.

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[06:55:00]

PAUL: You know, I don't know what to say. Because this is what the prompter says -- there was a one-sided shoving match at the end of the Thunder-Nuggets game. So Victor says, "If it's one-sided, is it a match?"

BLACKWELL: Is it a match?

PAUL: And you are right. BLACKWELL: I don't know.

PAUL: And you are right.

BLACKWELL: It's a guy shoving another guy. And Russell Westbrook was at the center of this. Vince Cellini is here this morning with the "Bleacher Report."

VINCE CELLINI, CNN SPORTS REPORTER: Yeah, I guess it's a match by definition. I love Russ because he makes a slow night a lot of fun.

PAUL: All right.

CELLINI: Here's why -- Russell Westbrook, not what you would call the coolest customer in the room; 110 percent 100 percent of the time. This time he was triggered in a shoving match. Less than a minute to go in the game, Westbrook and the Thunder down nine at Denver. The Nuggests' Jamal Murray appears to shove him a little bit and Westbrook shoves him back with a little more emphasis. Whistles blow, the crowd swarms, everybody cools off. Both Westbrook and Murray were given technical fouls so afterward, Russ, what took place?

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RUSSELL WESTBROOK, OKLAHOMA CITY THUNDER BASKETBALL PLAYER: He was in my way.

UNIDENTIFIED MALE: Did he say anything to you in that last sequence there?

WESTBROOK: I don't know. Don't really matter.

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CELLINI: He was in my way. Rough shooting night for Russ; 5 of 15 from the field, the Nuggets won the 19th of the season.

The NBA will not let Steph Curry live down the lunar-cy. The King's troll step last night showing a clip of the moon landing on the big screen during the game; Steph and his teammates got a big kick out of it. This week Curry seemed to wonder whether humans ever really landed on the moon though he later called his podcast denial of the moon landings a joke. The king's prank didn't seem to phase him or the Warriors. Curry had 35 in the 130-125 Golden State victory.

Saturday NFL football, my Cleveland Browns still have a shot to make the playoffs. Only three games left and what do you do when you're looking for a breakthrough after 20 years of football misery? Well you seek counsel from a proven winner hence the Browns brought in Kobe Bryant ahead of their game against the Broncos tonight.

Kobe talked to the team about the mamba mentality or his killer instinct and they'll need it. Yes, they have a shot at post season, but they're under 500, in third place in the division. They have to win their last three games and get a lot of help. They haven't been to the playoffs since 2002. They've also lost 11 in a row to the Broncos but I guess this there is a chance and these are heady times in Cleveland. At least they're relevant once again. And that's our time.

PAUL: All right Vince. Thank you so much. The match. The match.

BLACKWELL: All right. She was one of the most influential cast members on "Saturday Night Live" in the history of the show actually and played a part in changing the course of comedy. Experience the incredible story of comedy great Gilda Radner in her own words, "Love, Gilda," a CNN film. It's New Year's Day airing at 9:00 p.m. right here on CNN.

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UNIDENTIFIED FEMALE: Ho, ho, hey, hey, Obamacare is here to stay.

OBAMA: If you like your doctor, you will be able to keep your doctor, period.

UNIDENTIFIED MALE: The law that brought healthcare to millions of Americans has been struck down by a U.S. judge.