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Trump Trashes Government Funding Bill As Shutdown Looms; House GOP Report Calls For Criminal Probe Into Liz Cheney; Sources Say, House Panel Secretly Voted To Release Gaetz Report; Stocks Tumble As Fed Warns Inflation Will Remain Stubbornly High; Supreme Court To Consider Whether Controversial Ban Of Popular App TikTok Violates First Amendment. Aired 6-7p ET

Aired December 18, 2024 - 18:00   ET

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

[18:00:00]

WOLF BLITZER, CNN HOST: Happening now, breaking news, the House speaker, Mike Johnson, is scrambling to rescue his must pass government funding plan from very angry conservatives. And now Johnson's fight just got a lot more difficult with President-elect Donald Trump publicly trashing the bill.

Plus, multiple sources now tell CNN the House Ethics Committee has secretly voted to release its investigation into former Republican Congressman Matt Gaetz. Stand by for a reaction to our new reporting and the response from Gaetz, who now admits to, quote, embarrassing behavior.

Also tonight, some House Republicans are backing Donald Trump's calls to prosecute his political opponents, a new GOP report urging the FBI to launch a criminal probe into Liz Cheney for her role investigating the January 6th insurrection.

Welcome to our viewers here in the United States and around the world. I'm Wolf Blitzer. You're in The Situation Room.

We begin our coverage tonight with turmoil here in Washington. The House Speaker Mike Johnson's fight to avoid a government shutdown just hit a major snag as Donald Trump joined the conservative revolt against this funding bill.

Our Chief Congressional Correspondent Manu Raju is up on Capitol Hill and CNN's Kristen Holmes has details on all of Trump's latest dramatic moves.

Manu, we're awaiting an update, first of all, from the House Democratic leadership, but what's the latest on the Hill and is Speaker Johnson in trouble?

MANU RAJU, CNN ANCHOR AND CHIEF CONGRESSIONAL CORRESPONDENT: Yes. Trump's 11th hour demand, Wolf, has sent Washington scrambling. They would look like they were on a glide path to pass a bill to keep the government open past Friday up until March 14th. But in the 11th hour, Donald Trump has come out opposing the plan, bashing the deal that Mike Johnson cut with congressional leaders and contending that it should also include an increase to the national debt limit. Remember, the debt limit is an incredibly complex negotiation that typically takes months and months to resolve. Trump wants this off the table now. He says, why deal with it now when Joe Biden is in office, add it to what is Congress is dealing with and get it off their plate.

He's also criticizing deals that Johnson cut in order to get Democratic support. Remember, in order to get this bill across the narrowly divided House, he needs Democratic votes. So, Democrats have their own demands. That's been all part of this complex negotiation that's been happening behind the scenes for weeks. But after Johnson as well as the other congressional leaders put this deal out on Wednesday night, it was roughly 1,500 pages, many lawmakers revolted, particularly on the right, arguing they did not have time to review the plan and people on the right were critical of Johnson's deal- cutting.

So, where does this leave things now? Uncertain, Wolf. Democratic leaders have been huddling behind the scenes trying to figure out their strategy on how to proceed, whether to fight this or whether to try to cut a deal with the president-elect or with Speaker Johnson. That's why this moment right now will be critical.

And we hear from Hakeem Jeffries and his Democratic leadership team, how do they plan to proceed? And how does the speaker of the House deal with this. On top of the all this on January 3rd is the day that he needs to be reelected speaker. He can't afford very few defections in order to become the next speaker of the House. Already at least one Republican member, Thomas Massey of Kentucky, told me that he will not vote for him come January 3rd, which is one big reason why, Wolf, that a lot of this is uncertain at this moment. How does Johnson navigate a position that Donald Trump has put him in against the wall? And how does he get the votes to avoid a shutdown? Huge questions at this moment in Washington, Wolf.

BLITZER: We'll hear shortly what Hakeem Jeffries, the Democratic leader, has to say.

Kristen, you're with us as well, as you know. Trump has played an enormous role in all of this. What are you hearing? What's the latest on his part?

KRISTEN HOLMES, CNN NATIONAL CORRESPONDENT: Yes. And just really quickly to bounce off of what Manu was just saying, I mean, up until just a few hours ago, it seemed as though Speaker Johnson was in the clear when it came to President-elect Donald Trump. Donald Trump has had nothing but glowing things to say about Speaker Johnson, but this, of course, throws a wrench in all of this.

Now, what we saw today was essentially a drip of information coming from Elon Musk --

BLITZER: Kristen, I'm going to interrupt for a moment. I want to listen to what the Democratic leader, Hakeem Jeffries, is saying.

[18:05:01] REP. HAKEEM JEFFRIES (D-NY): -- the bipartisan agreement to fund the government, keep it open, and meet the needs of the American people. We reached a bipartisan agreement to provide disaster assistance to everyday Americans whose lives have been upended and turned upside down as a result of hurricanes, tornadoes, wildfires, floods, and other types of extreme weather events.

We reached a bipartisan agreement to meet the needs of the American people and provide assistance to farmers, families, children, seniors, veterans, men and women in uniform and working class Americans. House Republicans have now unilaterally decided to break a bipartisan agreement that they made. House Republicans have been ordered to shut down the government and hurt everyday Americans all across this country.

House Republicans will now own any harm that is visited upon the American people that results from a government shutdown or worse. An agreement is an agreement. It was bipartisan and there was nothing more to say. Thank you.

BLITZER: All right. That was the House Democratic leader, Hakeem Jeffries, making a very strong point.

I want to bring in our analyst to assess what's going on because the stakes right now here in Washington are enormous. Alex Thompson, what's your understanding of this remarkable turnabout, a bipartisan agreement, Democrats and Republicans working together to keep the government operating and all of a sudden it collapses?

ALEX THOMPSON, CNN POLITICAL ANALYST: Yes, this could foreshadow how the next two years and four years could go under Donald Trump because clearly it broke apart in part because of Donald Trump and Elon Musk. But I did find it really notable that Hakeem Jeffries did not mention Donald Trump. He clearly was not trying to say this is the part of the Donald Trump chaos or government. He blamed it all on House Republicans.

BLITZER: Bryan Lanza, what do you think, because the stakes, as I keep saying, are enormous right now? The government shuts down a lot of Americans, millions of Americans are going to suffer.

BRYAN LANZA, SENIOR ADVISER, TRUMP 2024 CAMPAIGN: Certainly millions of Americans are going to suffer. But I think if you look at the standpoint for what President Trump is, is he feels that the C.R. is so loaded with so much pork, even more than enough pork to feed all of Iowa. That's a concern. And the debt ceiling is another concern.

You know, President Trump is being strategic on how he wants the lame duck to sort of benefit his administration. Certainly dealing with the debt ceiling and dealing with, you know, a temporary spending in March becomes a challenge and he wants to weigh in. And Speaker Johnson is going to do whatever President Trump says. We've seen that at the time. The speaker always acquiesces to what the president wants to do, and that's where in this situation.

So, he's breaking a deal, which is, let's get used to it. President Trump, if he doesn't like the deal, it's and he's not involved in the deal, it's not a deal. That's what we're doing now.

BLITZER: But they got to reach an agreement within the next two days. Otherwise, it's going to collapse. The speaker, as we know, Mike Johnson, he's a Republican, he accepted this bipartisan deal.

LANZA: And he's on the hook for it. I mean, his speakership is on the line, there are people, there are conservatives that are very upset with the deal he's cut. There are people in the Twitter space, whatever that means, you know, which is the MAGA space, that are very upset, and there's constituencies that are upset. Clearly, Speaker Johnson has a lot of work to do. He kept a lot of people out of the loop. He didn't completely complete the deal. Tell the complete picture to President Trump of what the C.R. was going to look like. And President Trump, the language has been made public. J.D. Vance and President Trump clearly have an objection to it. They told the speaker the way in and they think what it needs to take to fix. And they're being strategic.

It is a smart thing to punt a lot of these things to President Trump's, you know, term. It is a smart thing to try to deal with the debt ceiling now. But the pork that's being layered at this right now is just too much for President Trump and too much for conservatives to swallow and they're not going to swallow it.

BLITZER: We just heard from J.D. Vance up on Capitol Hill. I want to play a clip what he just said.

(BEGIN VIDEO CLIP)

REPORTER: Do you support a clean C.R.?

J.D. VANCE, U.S. VICE PRESIDENT-ELECT: Well, what the president believes is we should support a clean C.R. so long as it contains a debt limit increase. That's the position of the president and that's what we're going to try to push for.

REPORTER: Are you supporting a government shutdown then?

VANCE: Have a good night, guys. Thanks.

(END VIDEO CLIP)

BLITZER: Ameshia, what do you think is going on right now?

AMESHIA CROSS, DEMOCRATIC STRATEGIST: A lot of horse trading. President-elect Trump wants to preside as though he is currently president. He is weighing very heavily on these decisions. With that being said, he also is not in love with Speaker Johnson. This could be the ax that gets them a new speaker. And I think that he's walking him into that path.

Make no mistake, Americans are going to get hurt, several Americans will get hurt, from federal workers, so those who aren't, who are waiting on SSI checks and things like that.

[18:10:00] We know that this is going to cause a major issue. However, I think that he is willing to do it, one, to prove a point, but also to ensure that there aren't any major policy changes that happen before he is actually in the White House a second time.

BLITZER: Do you think it could undermine Speaker Johnson's reelection?

THOMPSON: Potentially, although I don't know anybody besides Speaker Johnson that could get the votes given like the slim margins. But, yes, it's definitely a risk. Also a risk for President Trump is he'd be the first unelected president to be blamed for a government shutdown, which is what -- you know, if this actually does go to a shutdown, he risks.

CROSS: But that's assuming that they blame him, because I do think it was very strategic that, to a point made earlier by you, actually, that Hakeem Jeffries came out and blamed the House Republicans. He didn't mention Donald Trump's name once. And I think that that says something.

BLITZER: It's not just Donald Trump, it's Elon Musk, who's deeply involved in opposing this bipartisan deal that the speaker worked out.

And Democratic Congressman Boyle, Bryan, let me get your reaction. He posted this, and I'm quoting him now. Seems like the real leader of the GOP isn't Donald Trump, the leader of the GOP is Elon Musk. He's now calling the shots.

LANZA: It's a cute statement. He probably gets a couple of re-tweets. But we've seen this movie long enough to know that there's only one executive producer to the show, and it's Donald Trump. Elon is an actor. And what do executive producers do? They fire actors, and they hire actors. That's the way the process is going to work.

BLITZER: Because Elon Musk came out against this compromise bill first, and then Trump followed with his statement.

LANZA: Sure, of course. And it's safe to assume that Elon most likely coordinated with President Trump, do the balloon first, I'll follow up. Like they're in coordinations right now, but it's also important to realize there's only one executive producer to the Donald Trump show, and that's Donald Trump.

CROSS: I think that's true. And the secondary part of that is that a lot of it plays into the whole DOGE theory that he has. If he's saying that there's way too much pork in here, he can also have that conversation about things that need to get cut, a bloated government. He's going to utilize that himself as well.

THOMPSON: But it does speak -- I was going to say, it does speak to inherent tension in their relationship, and that Elon not only is the --

BLITZER: Relationship between who?

THOMPSON: Elon Musk and Donald Trump. Elon Musk is the richest man in the world, and he also has billions and billions and billions in government contracts. And he's also been appointed to a huge position in Donald Trump's government. And he also is willing to say his mind. Donald Trump is too. What happens when they disagree? And we actually don't know how this, you know, you said actor. We don't know how this, you know, bromance is going to play out.

LANZA: We kind of do know. I would say this, you know, the Chinese have a saying, you know, you can't have two tigers live in one mountain top. So, we do know how this is going to end. At some point there's going to be a conflict, and there's one executive producer, and there's one president, and that's Donald Trump. And Elon wasn't always with Trump from the very beginning. Elon is a new factor in the Trump space, probably less than two and a half years, maybe two years into it. He's a bit character.

BLITZER: We're getting more reaction from lawmakers up on Capitol Hill. Let me play some clips for our viewers.

(BEGIN VIDEO CLIP)

RAJU: So, you won't vote for him?

REP. THOMAS MASSIE (R-KY): He does not have my vote.

RAJU: Will you change your mind?

MASSIE: That would take a Christmas miracle.

We just won the elections. We have a mandate and he's giving away the farm. He's turned this thing into a Christmas tree.

REP. RICH MCCORMICK (R-GA): I'm wondering why we have control of Congress if we're not going to do what we say we're going to do.

RAJU: Do you think the speaker, given the way he's handled this, deserves to be reelected on January 3rd?

MCCORMICK: I think there's going to be debate on it. If we're not careful, we'll be having some serious debate.

(END VIDEO CLIP)

BLITZER: How much trouble do you think Speaker Johnson's in right now?

LANZA: I don't think he has the votes to be speaker right now. I think if it was taken to the house floor, I don't think he'd get the votes. He's in trouble. I mean, first of all, let's talk about the trouble he faces with Trump world. You had the Republicans pick up Senate seats. You had the Republican president get the highest vote total of a Republican ever, and you had the speaker lose several seats. I mean, so he's underperformed in the electoral process. He's clearly underperforming the legislative process. And I've heard from easily more than six members just in the past couple of hours who are urging me to go to President Trump and say he can't support him for the speaker role. I mean, the speaker doesn't have the votes right now.

BLITZER: Interesting. Let's see what happens. That vote's going to be happening early in January too.

LANZA: Yes, he would need to be saved by President Trump.

BLITZER: We'll see how that unfolds. Right now, it doesn't look like Trump wants to save him. We'll see what happens.

Everyone stand by. Just ahead, there's more news up on Capitol Hill, dramatic news. House Republicans now recommending a former colleague be prosecuted for her role in investigating the January 6th attack.

Plus, the last-minute move that could save TikTok as the clock ticks down to a possible ban here in the United States.

(COMMERCIAL BREAK)

[18:15:00]

BLITZER: House Republicans have just given Donald Trump a new opening in his longstanding push to prosecute his political opponents.

Brian Todd is working the story for us. Brian, what can you tell us about this GOP report calling on the FBI to criminally investigate Liz Cheney?

BRIAN TODD, CNN CORRESPONDENT: Wolf, the report openly questions whether Liz Cheney might have broken the law in her dealings with a key witness before the January 6th select committee. Analysts see this as a pure revenge play from the president-elect.

(BEGIN VIDEOTAPE)

DONALD TRUMP, U.S. PRESIDENT-ELECT: Liz Cheney, a total loser.

TODD (voice over): The former and future president posting on Truth Social at 311 this morning, quote, Liz Cheney could be in a lot of trouble. Donald Trump's response to a new report from his Republican allies in the House, which recommends that former Republican Congresswoman Liz Cheney should be prosecuted by the FBI for her role investigating the January 6th attack on the Capitol.

PROF. LARRY SABATO, DIRECTOR, CENTER FOR POLITICS, UNIVERSITY OF VIRGINIA: This is just the first of many attempts to seek revenge and retribution, as Donald Trump has put it, for the January 6th report.

TODD: That report issued in 2022 asserted Trump incited the rioters who stormed the Capitol, and Cheney, serving as vice chair of the committee, was often seen as one of the leading public faces of the investigation.

FMR. REP. LIZ CHENEY (R-WY): President Trump summoned the mob, assembled the mob, and lit the flame of this attack.

VIVIAN SALAMA, NATIONAL POLITICS REPORTER, THE WALL STREET JOURNAL: He has deep grievances with Liz Cheney as she spoke out against him at a time where most Republicans were not willing to do that. And he believes deeply that she tarnished his legacy. [18:20:04]

TODD: Trump has repeatedly, personally insulted Cheney, including just before the election, calling her a warmonger, imagining how she would do if she faced combat.

TRUMP: She's a radical war hawk. Let's put her with a rifle standing there with nine barrels shooting at her, okay?

TODD: The new report from House Republicans accuses Cheney of colluding with Cassidy Hutchinson, a former Trump White House aide who became a star witness for the January 6th committee after ditching her Trump-provided lawyer.

CASSIDY HUTCHINSON, FORMER TRUMP WHITE HOUSE AIDE: I overheard the president say something to the effect of, you know, I don't effing care that they have weapons.

TODD: House Republicans implying Cheney might have broken the law by engaging in backchannel communications with Hutchinson.

REP. BARRY LOUDERMILK (R-GA): Did Liz Cheney commit subordinate perjury, which is when she's encouraging someone to not tell the truth?

TODD: But one legal analyst says this.

HARRY LITMAN, FORMER DEPUTY ASSISTANT ATTORNEY GENERAL: Nothing wrong happened. They communicated with a witness and helped her get another lawyer.

TODD: By calling on the FBI to go after Liz Cheney, Trump's House allies could be looking to Kash Patel, a Trump loyalist picked by Trump to be the FBI director, who's vowed to take retribution on Trump's enemies.

SALAMA: He is largely viewed, even among Republicans, as being a yes man, essentially, and will do whatever Donald Trump asks him to do.

TODD: One analyst sees this report as more about message sending than about whether Liz Cheney or anyone else actually broke the law.

SABATO: This is a warning to all of us about what is coming in the next four years. He's at the peak of his power and he intends to use it and use it fast so that he has four full years to crush his enemies.

(END VIDEOTAPE)

TODD (on camera): Liz Cheney has responded by saying that the new report, quote, intentionally disregards the truth, and instead fabricates lies and defamatory allegations in an attempt to cover up what Donald Trump did. Cheney said that January 6th, quote, showed Donald Trump for who he really is, a cruel and vindictive man. Wolf?

BLITZER: All right. Brian Todd reporting for us, Brian, thanks very much.

Let's get some analysis right now from CNN Legal Analyst Norm Eisen. Norm, thanks very much for joining us.

Just how serious is this threat to criminally prosecute Liz Cheney?

NORM EISEN, CNN LEGAL ANALYST: Wolf, as a legal matter, there's no basis to prosecute the congresswoman for witness tampering or suborning perjury. What she did in talking to witnesses and working to witnesses, perfectly normal. But as a political matter, there's a high degree of risk because Kash Patel, the chosen FBI nominee of Donald Trump has said that Liz Cheney suppressed evidence. He's criticized her. He's called for retribution. Donald Trump has done so. So, there is a political risk here. And in America, that is not what our officials should be doing. So, it's profoundly contrary to the American idea.

BLITZER: So, bottom line, Norm, how does it fit into Trump's vows of retribution when he takes office?

EISEN: Wolf, it's exhibit A to those vows. Donald Trump has a grudge against Liz Cheney because she crossed party lines and because she was so effective in leading the January 6th committee and exposing Donald Trump's role in stimulating the insurrection and then his failure to act that day.

So, this is a powerful evidence of this idea of revenge and retribution. We can't have that from a president, an FBI director. It's just wrong. It's dangerous. That is not democracy. It's not America.

BLITZER: Should President Biden, Norm, pardon Liz Cheney and other possible Trump targets before he leaves office on January 20th?

EISEN: Wolf, part of the legal baselessness here is that Liz Cheney enjoys speech and debate protection under the Constitution. She has legal protections. Other members of Congress, prosecutors, have different legal immunities. But there should, in my view, be serious whiteout consideration of protective pardons. I would call it amnesty. It's happened a lot in American history, many president categorically saying we should have an amnesty for witnesses, the Michael Cohens and the Cassidy Hutchinsons of the world. They are the most at risk.

BLITZER: Norm Eisen, thanks very much for your analysis.

And coming up, there's more news we're following. There's reporting that broke first right here on CNN, the House Ethics Committee reversing course and voting to release its report into former Congressman and Trump loyalist Matt Gaetz. Stand by.

(COMMERCIAL BREAK)

[18:25:00]

BLITZER: There's more breaking news here in the nation's capital, a major power struggle over avoiding a government shutdown as Donald Trump trashes Speaker Mike Johnson's plan.

All of this as the House panel investigating misconduct allegations against former Republican Congressman Matt Gaetz has now decided to release its findings.

Our Chief Legal Affairs Correspondent Paula Reed has details for us. Paula, this is a stunning reversal from the House Ethics Committee.

PAULA REID, CNN CHIEF LEGAL AFFAIRS CORRESPONDENT: That's exactly right, Wolf. And CNN broke the story that earlier this month, the House Ethics Committee secretly voted to release the ethics report on the former congressman. Now, we've learned it will be made public after the last vote. It's clear that lawmakers want to be on their way out of town when these new details are revealed.

[18:30:01]

(BEGIN VIDEOTAPE)

FMR. REP. MATT GAETZ (R-FL): It is a horrible allegation, and it is a lie.

REED (voice over): Former Congressman Matt Gaetz has repeatedly denied having sex with a woman who was just 17 at the time, an allegation that has been investigated by the Justice Department and most recently by Congress.

GAETZ: I am the most investigated man in the United States Congress.

REED: Back in 2020, the Trump Justice Department opened a criminal investigation into whether the Republican congressman had sex with a minor. Over two years, the investigation expanded to look into allegations of sex trafficking, prostitution, obstruction of justice, and public corruption.

GAETZ: If the things that the House Ethics report were true, I would be under indictment and probably in a prison cell. But, of course, they're false.

REED: While Gaetz denied wrongdoing, a former Trump aide testified to the January 6th committee that Gaetz sought a preemptive pardon from Trump before he left office. In February 2023, the Justice Department revealed it would not bring charges amid questions about whether central witnesses in the investigation would be perceived as credible before a jury.

But a House Ethics investigation, which started in 2021 and had been put on hold while the criminal probe was underway, was reopened. CNN previously reported that the Ethics Committee followed leads from the Justice Department investigation and also closely followed a civil suit in Florida filed by a Gaetz associate, where a witness allegedly testified to seeing Gaetz have sex on an air hockey table.

The committee also heard from two women who allege Gaetz paid them for sex. JOEL LEPPARD, ATTORNEY FOR WOMAN WHO TESTIFIED AGAINST GAETZ: She testified to the House that as she was walking out to the pool area, she turned to her right and she witnessed her friend having sex with Representative Gaetz, and her friend at that time was 17.

REED: And House investigators interviewed the underage victim who testified about her sexual encounters with Gaetz.

GAETZ: We're here voluntarily supporting our friend, President Trump,

REED: Meanwhile, then-Congressman Gaetz continued to demonstrate intense loyalty to former President Donald Trump, standing with him when he was convicted of dozens of felonies, which Trump disputed.

TRUMP: The people of our country know it's a hoax.

REED: That loyalty paid off when Trump was reelected and tapped Gaetz to be his attorney general.

GAETZ: We're going to end weaponization at the Department of Justice.

REED: After the nomination, he resigned from Congress, but questions about the Ethics probe's findings continued to dog him.

REP. MICHAEL GUEST (R-MS): He is no longer a member of Congress and so I think that this settles any involvement that the Ethics Committee should have in any matters involving Mr. Gaetz.

REED: Eight days after his nomination, Gaetz abruptly withdrew from consideration minutes before CNN broke the news that the Ethics report contained new details about a second sexual encounter with a minor.

(END VIDEOTAPE)

REED (on camera): In a statement today, Gaetz admitted to sometimes sending money to women he dated and talked a lot of this up to just playing too hard in his 30s. So, I will note he was a congressman at the time in question, but he also insisted that he, quote, never had sexual contact with someone under 18. The sources tell CNN that the alleged victim at the center of these investigations told the Ethics Committee about two alleged sexual encounters she had with Gaetz when she was 17.

Of course, that wasn't enough for prosecutors to file charges. Now, this evidence will likely be in the court of public opinion in the next few days.

BLITZER: Paula Reed reporting for us, Paula, thank you very much for that report.

I want to bring back our political experts, and, Alex Thompson, let me start with you, a lot to unpack here. Why do you think the Ethics Committee has now reversed its policy and is now saying they voted to go ahead and release this report, even though he's no longer an active member of the House? THOMPSON: In part because he's no longer subject to being the attorney general for Donald Trump. I think that changes some of the calculus clearly when he was the nominee to be attorney general. There was a huge political fallout even as senators wanted to privately read this report.

I'd also say that this Ethics report has basically been very consequential in ways beyond actually allegations at hand. This Ethics report was at the center of sort of the Kevin McCarthy-Matt Gaetz feud that ultimately Kevin McCarthy believes is why Matt Gaetz led the revolt to eventually replace him as speaker of the House.

BLITZER: Interesting, a lot of history there. Bryan, how damaging is this, once they release this report, assuming it'll happen fairly soon for Gaetz, and for Trump for that matter, who had actually nominated him to become the attorney general of the United States?

LANZA: Listen, I don't think it'll have a big impact on Trump. We've seen a lot of people try to attach things to Trump that had no impact, so we should assume that that will continue. But it is pretty devastating to Gaetz. It's gross. You know, parents sort of look at that and find it repulsive. They already have a negative view of Washington as a place that you can't trust. Now, they have a view of Washington as a place that you can't send your kids.

So, it's a bad thing for Gaetz. I don't agree. It probably shouldn't have been released. But now that we're doing it, I think more of these reports, these agreements should be released.

[18:35:04]

Because, you know, you're setting the precedent that, you know, the president was, as a former member, we don't do this. We don't go outside. Now they've broken that seal. Now, we're going to see more and more pressure for more of these things to come out, and I think that's probably a good thing for the American people.

BLITZER: Did Trump not know? Did nobody vet Matt Gaetz before he nominated him to become the attorney general of the United States, that he was under investigation by the House Ethics Committee?

LANZA: Yes. I think the biggest argument that Gaetz made in that argument was, you know, you had the Biden Justice Department didn't charge him with anything. What's the House Ethics panel going to come with? And I think that was a good argument for President Trump and certainly a good argument for the transition. It's like, you're right, we've already seen the weaponization of the Justice Department during Joe Biden. We'd expect that to take place during Matt Gaetz. They clearly didn't have enough to move forward. And I think that was enough to answer the questions with respect to the transition of President Trump.

BLITZER: Clearly didn't do a whole lot of vetting of Matt Gaetz before that nomination to become the attorney general of the United States.

Ameshia, Gaetz is floating the idea of actually swearing into Congress on January 3rd. He was reelected then he dropped out of Congress. What do you think? What do you make of that threat?

CROSS: I think it's him just trying to shift the news cycle. At the end of the day, Matt Gaetz has become the underage looker for OnlyFans at this point, like sex, lies, and videotape gets a lot of news coverage, but this guy is basically done politically.

I think he's going to sail off into the sunset of OAN, talk about conspiracy theories, live his best life, ultra right, but he's done here.

LANZA: In journalism?

THOMPSON: Well, I would say, I would agree with you, except for the fact of what Paula said before, is that he has a very, very, very good friend, and his name is Donald Trump. And Donald Trump maybe he doesn't get a job that requires Senate confirmation, but he could get another job that doesn't require that.

BLITZER: He's got a job. He's been offered a job at a conservative television.

LANZA: And even more unpopular, you know, group of people other than Washington, D.C., is journalism. So, he's choosing journalism as well.

BLITZER: We'll see how all of this unfolds. Guys, thank you very, very much.

Just ahead, there are new clues right now in the search for answers in Wisconsin tonight as we learn more about the 15-year-old school shooter.

(COMMERCIAL BREAK)

[18:40:00]

BLITZER: More breaking news we're following. We're getting new insight into the turbulent home life of the Wisconsin school shooter. Court documents show the teen's parents were married and divorced twice and that she had to split time between their separate homes throughout the week.

Let's discuss what's going on with Criminologist Casey Jordan. Casey, thanks for joining us.

Based on what we've learned about the teen's home life individually, this doesn't mean necessarily someone is going to shoot up a school, but how can it contribute to, quote, wanting to commit such horror?

CASEY JORDAN, CRIMINOLOGIST: Well, there are four primary factors that we look at as we try to kind of reconstruct and dissect the dynamics that may have contributed to this. Family dynamics is one of them. And we do know that ten years ago when the parents got divorced and the shooter would have been about four at the time, or five, parents were given joint custody and her mother was her primary caregiver until two years ago and something might've happened, but her father became her primary custodial parent. And what we've also seen recently are some confirmed photos of the father taking his daughter to a shooting range and practicing target practice with her. So, those family dynamics, whether they were completely calm and civil is really unknown. I mean, all parents are being cooperative at this time. But I think a lot more people are wondering why the father got primary custody or custody of her where she lived just two years ago.

BLITZER: We obtained that picture of the 15-year-old at a shooting range wearing a T-shirt of the same rock band the Columbine High School shooters referenced back in 1999. Was this a warning sign that was missed?

JORDAN: It could be. I mean, leakage is that communication that should be taken as a warning sign of an intent to perhaps do harm to themselves or others. That T-shirt, which was worn by the Columbine shooters, which features the acronym of a German metal band, shows a level of research and perhaps fascination, even obsession, with a school shooter that could have contributed to her mental state at the time of this attack. So, peers, family, school dynamics and mental health, these are the four prongs we're going to be looking at as we try to determine the many multifaceted areas that contributed to her motive.

BLITZER: And, Casey, what one person may think is a warning sign, another person may not. So, how are people to know when something is a red flag?

JORDAN: We live in an era where everything has to be taken seriously. And, again, we have a lot of reports of unconfirmed of her writings on social media. Everything that seems to revere a school shooter, because we know almost all school shooters have researched intently previous school shooters, any fascination or obsession with previous school shootings should be considered a warning sign. And access to guns under the age of 18 is never a help.

BLITZER: Casey Jordan, thank you very much for your analysis. I appreciate it very much.

Coming up, what happened today for the first time in some 50 years and how it will impact your wallet.

(COMMERCIAL BREAK)

[18:48:58]

BLITZER: Breaking news, stocks closed sharply lower today after the Federal Reserve offered a much gloomier outlook for the U.S. economy in 2025.

CNN economics and political commentator Catherine Rampell is joining us right now.

Catherine, how much is the Dow drop tied to inflation and the Fed's decision on interest rates? CATHERINE RAMPELL, CNN ECONOMICS AND POLITICAL COMMENTATOR: We've

actually seen the longest consecutive stretch of declines in the Dow for the past ten days. That's the longest stretch going back to the Ford administration. So some of what's been going on with the Dow predates what happened with the fed today.

But undoubtedly, the Fed's announcement today that it was cutting interest rates now by a quarter percentage point, but will likely hold off on cutting them quite as much as expected next year, that had a huge effect on markets, not just stock markets, by the way, all of the major indexes fell in relation to in response to that, but also lots of other measures of borrowing costs.

So mortgages, for example, are back at over 7 percent, 30-year mortgages are back at over 7 percent.

[18:50:06]

Whereas a year ago, they were in the sixes. So, you know, lots of responses to -- to this particular news.

BLITZER: Yeah. The Dow dropped more than 1,100 points today.

What is the Fed's decision, Catherine, on interest rates say about the incoming Trump administration's economic policies?

RAMPELL: So, look, inflation has been unfortunately quite stubborn. It's come down a lot. But that last mile, getting it from like 2.5 percent or around 3 percent down to 2 percent has been really difficult. And a lot of the kinds of policies that Trump has put on the table for next year might potentially reverse some of the progress that we've had so far.

The Fed will not say that they have been very cautious to avoid commenting on any sort of policies out there, but if you look at Trump's potential deportations, his potential increases in tariffs on China and on goods from around the world, as well as his fiscal policies, all of those things are likely to increase either the price level or inflation, and the Fed is potentially responding to all of that, even if they wont say so.

BLITZER: So how worried should Americans be, Catherine, about inflation going forward?

RAMPELL: You know, I don't think its time to freak out yet. It does seem like it's been really hard to wring out again that that last bit of inflation above the Fed's target. But you know, we -- we have been on the right course. I'm worried about what happens next year if some of these, in my view, misguided policies take effect. I think consumers will feel it, for example, if you have a 25 percent tariff on everything coming from Mexico, on everything coming from Canada, and maybe a 100 percent tariff on everything coming from China, and some of that could feed into trend inflation.

That would be quite bad. But so far, these things are all hypothetical. I don't think that we should get too worried at the moment. Instead, I would say, you know, keep an eye on what your members of Congress and what the president elect have in store.

BLITZER: Good, good advice. Catherine Rampell, thanks very much for your analysis.

Coming up, the U.S. Supreme Court announcing today it will decide whether the government can ban one of the most popular social media apps in existence.

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[18:56:47]

BLITZER: The United States Supreme Court has just agreed to hear a challenge to the very controversial ban on the popular social media app, TikTok. The court will decide whether the ban, which is scheduled to take effect the day before Donald Trump takes office next month, violates the First Amendment.

Let's get some more from CNN's Clare Duffy, who is joining us right now.

Clare, this ban is set to go into effect on January 19th. So how would a ban even work?

CLARE DUFFY, CNN BUSINESS WRITER: Yeah. Wolf, look, even if the Supreme Court upholds this ban, there is still a way that TikTok could avoid it. And that is to be sold off from its Chinese parent company, ByteDance.

But so far, ByteDance has indicated that it does not plan to sell TikTok. So what would a ban look like after this January 19th deadline? Well, you'll no longer be able to download it from the App Stores, but if you already have TikTok on your phone, it won't immediately disappear, but you won't be able to update it, so it will eventually become glitchy and stop working.

And this ban would have major implications. This is such a popular platform, 170 million American users, 7 million U.S. businesses use this platform. It has a huge impact on culture, and users are really concerned about this. I want to play you an example of some of the kinds of TikToks that people are posting in anticipation of this ban.

Let's watch.

(BEGIN VIDEO CLIP)

KATIE WOLF, TIKTOK CREATOR: I'm so mad at these politicians who wrote this law thinking that TikTok was just some silly dancing app for teenagers. TikTok changed my life. It changed my life on a personal level, which sounds dramatic, but it's not. It's grown my business, 80 percent of my clients come from TikTok, in my freelancing business, I just cannot imagine it going away.

(END VIDEO CLIP)

DUFFY: And she's right. I mean, people have launched their whole livelihoods here. It would have a huge deal if this app were banned. And you have to imagine that's part of why the Supreme Court decided to take this up so quickly.

BLITZER: Clare, how does a Trump actually factor into all of this? He actually met, I understand with the TikTok CEO earlier this week.

DUFFY: Yeah, it's interesting because it was actually during Trumps first administration that he began the conversation about banning TikTok. He tried to ban TikTok. It was unsuccessful during his administration, but now it appears he's had a change of heart.

Let's listen to what he said on Monday.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT-ELECT OF THE UNITED STATES: We'll take a look at TikTok. You know, I have a warm spot in my heart for TikTok because I won youth by 34 points. And there are those that say that TikTok has something to do with that.

(END VIDEO CLIP)

DUFFY: Now, it's not clear that he's actually going to be able to do anything to stop this because, again, this ban would go into effect the day before his inauguration. But experts have told me he has a couple of potential approaches here. He could ask Congress to repeal the law, although that is unlikely to be successful because they just passed it back in April and there are still many on the Hill who are very concerned that this app poses a national security risk.

He could also signal that his DOJ is not going to enforce this ban. He could signal to the app stores that they won't be fined for continuing to host TikTok.

But again, experts say those companies may not feel comfortable violating the law just because they have that reassurance from Trump. So it will be interesting to see what he tries to do here and if he's able to pull anything off.

BLITZER: And very quickly, Clare, what is TikTok saying about the case?

DUFFY: TikTok is saying they're pleased that the Supreme Court has decided to take this up, and they continue to think that this ban would be unconstitutional and violate the free speech rights of their 170 million American users. So the company is still holding strong with this argument here, Wolf.

BLITZER: We'll see what the Supreme Court decides to do. Thanks very much for that. Clare Duffy reporting.

And to our viewers, thanks very much for watching. I'm Wolf Blitzer in THE SITUATION ROOM.

"ERIN BURNETT OUTFRONT" starts right now.