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State of the Union

Interview With Trump Senior Adviser Kellyanne Conway; Interview With South Carolina Senator Lindsey Graham; Interview With Former Virginia Governor Terry McAuliffe; Partial Government Shutdown Enters Day Nine; The First Lady Heads Back To Florida Solo For New Year. Aired 9-10a ET

Aired December 30, 2018 - 09:00   ET




DANA BASH, CNN ANCHOR (voice-over): No end in sight. The president is now blaming Democrats for the deaths of two migrant children at the border and backing away from his vow to own the shutdown.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Nancy Pelosi is calling the shots.

BASH: Is anyone trying to make a deal to reopen the government? Counselor to the president Kellyanne Conway and Republican Senator Lindsey Graham are here to respond next.

And decision time. All eyes are on Democrats considering a presidential run.


SEN. CORY BOOKER (D), NEW JERSEY: Meet with family, friends and advisers, and decide.

BASH: The race to 2020 starts now. Former Virginia Governor and potential presidential contender Terry McAuliffe weighs in.

Plus, making her mark -- the first lady settling into her White House role, proving time and time again she always goes her own way.

MELANIA TRUMP, FIRST LADY: I want to stay true to myself.

BASH: The notable moments from a momentous year coming up.


BASH: Hello. I'm Dana Bash, in for Jake Tapper here in Washington, where the state of our union is counting down to a new year.

And, the way things are looking, hundreds of thousands of government workers across the country may find it hard to pop the champagne, not knowing when their next paycheck is coming. As President Trump digs in over his fight for funding a border wall,

spending his holiday writing angry tweets and taking his battle with the Democrats to a dark place, tweeting: "Any deaths of children or others at the border are strictly the fault of the Democrats and their pathetic immigration policies that allow people to make the long trek, thinking they can enter our country illegally."

The tweet coming days after an 8-year-old migrant died in U.S. custody on Christmas Eve.


BASH: Joining me now, counselor to the president Kellyanne Conway.

Kellyanne, thank you so much for joining me this morning.

That was President Trump's first comment on the deaths of those two children at the border, explicitly saying Democratic lawmakers are culpable in those children dying.

Is that something you want to defend this morning?

KELLYANNE CONWAY, TRUMP SENIOR ADVISER: Dana, the president's press secretary and incoming acting chief of staff had already weighed in publicly about these tragic deaths.

And it is a tragedy. I have discussed them directly with the president. And I requested and received a briefing from CBP about both Jakelin and Felipe's deaths.

Any death of a child, any death of anyone is an utter tragedy. I think the president's point is an important one, which is that he has stayed in Washington to negotiate border security and to get funding for DHS and ICE and CBP and, of course, enhanced border security, which Democrats, until he took over as president, were all in favor of.

And we're allowing these people to take their children on a perilous journey without correcting the falsities. They're being promised something that people can simply not deliver upon.

BASH: Kellyanne -- Kellyanne, I want to talk about the...

CONWAY: We don't want people to subject these children to these perilous journeys. But both of them...

BASH: I want to talk about that policy in a minute.

CONWAY: But...

BASH: But the idea that the president's aides -- now you're one of them -- have said that they have empathy for the deaths of children who are coming across the border with their parents...

CONWAY: Absolutely.

BASH: But the president hasn't.

The only thing he has said is something that is very political and, frankly, misleading, with regard to Democrats being culpable for the deaths of children.

CONWAY: Dana, the president would like the Democrats to be in 2019 who they have been in 2006 with the Secure Fences Act.

Earlier this summer, in fact, a number -- dozens of Democrats voted for DHS funding. In a certain committee, 10 Democrats voted to approve enhanced border security funding. Where are they now?

And what -- the point he's making is that our DHS and CBP, Customs and Border Patrol, statistics show that, unlike in the past, where the vast, vast majority of those coming over the border illegally were single males and were coming from Mexico, they're coming from the Northern Triangle countries now, and they're coming as families, or they're coming as unaccompanied minors, as you know, unaccompanied children.

We simply cannot absorb all that. And, unfortunately and very tragically, it does results in some deaths.

BASH: When...

CONWAY: Now, in Felipe's case, his father and he came into El Paso, I'm told, one of the busiest ports of entry. They were being held while their claims were being processed. He took ill. He was taken to the hospital twice. And, unfortunately, he's now deceased.


In the case of Jakelin, they were very, very far from a -- from a port of entry; 163 people needed to be put on a bus that...


CONWAY: This is important -- that accommodate 50.

I went and got -- I went and got a briefing because I'm concerned about this.

BASH: And that's -- and that's important.

It's also important to note that the president tweeted, not just the Democrats are responsible, but that they're -- that they were ill before they were coming over.

And his own government, the CBP says -- has said in several statements that they have tracked them, and that that's not the case.

I want to move on, Kellyanne, to where we are right now.

CONWAY: Well, but I -- I don't want to move on from children's death and what the president is saying, because I think this is very important. BASH: OK.

CONWAY: I don't like -- I don't like some of the Democrats using these deaths as political pawns.


BASH: But isn't that exactly what the president just did?

CONWAY: No, the president is not doing that.

The president does not want these children to come on the perilous journey to begin with. They are paying now -- some of them are paying the ultimate price. But many of them, all of them are paying these coyotes who don't give a whit about human life.


BASH: But this is not a new policy. This is a policy that has been in place with Democrats in...

CONWAY: That's not true.

BASH: ... in true -- in charge of the White House, with Democrats in charge of Congress, and Republicans in charge of both the White House and Congress.


CONWAY: No. The courts have screwed this up, and the Congress has failed to close loopholes that make people believe they should come here as a family unit.

We simply are trying to absorb the new illegal immigration, which are larger, higher numbers of family units and unaccompanied minors. You know the statistics. You have seen them.

And I do want to say that those Democrats who in the past voted for the Secure Fences Act of 2006, if they want to call it the Secure Fences Act of 2019, call it whatever you want, because the House passed -- they did their job. They passed over 45.6 billion in funding that is not just for a wall. It's for technology. It's for steel slats.

BASH: Kellyanne, let's talk about this. Let's talk about the solution, if there is any solution.

We are nine days in to a shutdown.


BASH: I want to ask you about something that John Kelly, the outgoing chief of staff for the White House, just said in an interview.

He said: "To be honest, it's not a wall. The president still says wall. Oftentimes, frankly he will say barrier or fencing. Now he's tended towards steel slats. But we left a solid concrete wall early on in the administration."

First, is he right that it's not a wall anymore?

CONWAY: Well, I think many people who don't want to fess up to border security and get Congress to do its job and close the loopholes insisted it's a wall, a wall, a wall.

The president has said -- he said last week and he tweeted out pictures of steel slats. Things are already happening in California, in terms of that. It's been a priority for CBP since 2009, I'm informed. And because of this president's leadership, it's finally getting done.

I saw a Democratic congressman on your network, clips were played earlier today -- I guess the interview was recent, Dana -- where he said, hey, but we need technology, we need enhancements. We need -- OK, let's do that. People say, we want something to look -- look -- we -- we need to look through.


BASH: So, we don't need a wall?

CONWAY: The president has said, that is fine.

BASH: So, the wall -- is John Kelly right that an actual wall, which we heard umpteen times on the campaign trail, that that is no longer the case?

CONWAY: No, the president -- it -- it really depends on what Customs and Border Patrol says they need. And they have said they need barriers, they need, the president says, a wall, a barrier -- barriers. They need still slats. They need technology enhancements.

But those who have completely walked away from the table are doing no justice to the people of this country. We have 31 sanctuary cities now. We have six sanctuary states. So many of them would make us a sanctuary countries.


BASH: But, Kellyanne, the government has been shut down for nine days over a wall.



BASH: It has been shut down over a wall.


CONWAY: No, no, no, that is incorrect. That is completely false.


BASH: The president said it in the Oval Office. He said very, very clearly, "I'm fine..."


CONWAY: It is shut down because of border security.


CONWAY: Remember, though, the House then -- the House later passed $5.6 billion for border security. They didn't pass it for a wall. That is not restricted to just wall-building.


CONWAY: I talked to leadership last night. It's for any number of things.


BASH: And to the senators in the Republican and Democratic Party who say they did pass a bill in December before leaving that they thought the president was going to sign that didn't necessarily have money for a border wall, but had $1.3 billion for more border security, you're telling those Republicans in the Senate that that wasn't enough?

CONWAY: Well, I noticed that Senator Marco Rubio of Florida said, after the House passed this package, this was reasonable. And his comment was, he hopes Democrats will come forward, because they voted for $800 billion or so in a stimulus package in the last administration. They could vote for $5 billion for border security.

That's a very important point. And the president could stand firm on the $5.6 billion and ask the Senate, you know, why is this not a modest investment in our nation's security? Border security is national security.


And it is naive and partisan for anybody to suggest that...

BASH: But is it border security or is it the wall?

CONWAY: ... we don't have a drug crisis at our border...

BASH: Is it the border...

CONWAY: It's anything -- it's all of the above.


BASH: Because this is -- I'm sure you're hearing this. Republicans and Democrats are frustrated, because they say the goalpost keeps changing...

CONWAY: No, where are they?

BASH: ... where they're not sure what the president... CONWAY: The president has said -- the president tweeted yesterday, where are they? He wants to make a deal on border security. Where are they? Nancy Pelosi is in Hawaii.


BASH: They argue they haven't heard from the president in 19 days.


CONWAY: ... more moola to fund the government, to reopen the government.

BASH: They haven't gotten a phone call from the president in 19 days.

CONWAY: But where are they?

BASH: Waiting to hear from the president.

CONWAY: That's not fair. They know where he is. They know where he is. He's exactly where he's been the entire time, working in Washington, D.C., in the White House. He tweeted out yesterday that he's ready to make a deal.

BASH: But if he wants to get this wall, then you invite people to the White House, and you sit down, and you do the art of the deal. That's not happening.

CONWAY: He wants all types of border security.

The House passed this package. It went to the Senate. It was tendered to the Senate, and the Senate did not counteroffer. Dana, why aren't they countering offer with something that means something to them?

We haven't heard from them. It's complete crickets, for partisan political reasons, while, just two days ago, we saw writ large the president's entire point...

BASH: When...

CONWAY: Excuse me.

We have Officer Singh in California murdered in cold blood after taking a Christmas picture with his 5-month-old son, who will never know his father now, murdered by a criminal alien who shouldn't have been here.

This is the president's entire point. The Democrats that voted against Kate's Law. They voted against removing criminal aliens. They voted against sanctuary cities law. They're voting against the -- they're not coming to the table for border security.

The Democrats in 2018 helped put on the president's desk...

BASH: Kellyanne... CONWAY: ... two major bipartisan packages, opioid legislation and criminal justice reform.

BASH: One of the things...

CONWAY: Border security is a nonpartisan issue. Let's have a bipartisan solution.

BASH: One of the things that the Democrats say that they will do when they take over the House on Thursday is pass a bill to reopen the government, which may end up on the president's desk. If...

CONWAY: All of the government, including Department of Homeland Security?

BASH: Yes, that will fund the Department of Homeland Security, not the border wall.

CONWAY: Border security.

BASH: If the president gets that on his desk, will he veto it?

CONWAY: It depends what's in it. What is it going to say?

In other words, they're not even discussing it over the Christmas and New Year's break, Dana, what could possibly be in that package.


BASH: If you got something that the Senate already passed, would he would he veto it or not?

CONWAY: It depends what's in it. And the Senate -- no, the Senate -- the president likes the $5.6 billion that was in the House package.

His incoming acting chief of staff has -- and his vice president have offered less than that as a compromise. We have heard nothing in return.

And negotiation, by definition, has to include both sides. He's in the -- he's in the White House. He's in Washington ready to negotiate.

BASH: But...

CONWAY: This is important for border security and keeping the government open.

But if you keep saying wall, wall, wall because you want wall to be a four-letter word, and we're not being honest about everything CBP has asked with respect to border security...

BASH: Kellyanne, the president is the one who explicitly said in the Oval Office it's the wall and it's the reason why the shutdown is happening. CONWAY: And he said in a tweet yesterday -- you can't cherry-pick his tweets. He talked about border security just yesterday. He mentioned it to me yesterday in a phone call.


CONWAY: "I'm here ready to make a deal, negotiate on border security."

He's ready.

BASH: Well, we look forward to seeing...

CONWAY: But they need to come to the table. This is not a negotiation.

BASH: We look forward to seeing that negotiation start back up when they come back.

CONWAY: Well, I also think, when Speaker Pelosi -- I think, when Speaker Pelosi comes in, she's got a weakened hand. There are 33 Democrats coming in, Dana...

BASH: How does she have a weakened hand? She now has control of the House.

CONWAY: ... that won in Trump districts, because -- right.

Well, she's got a smaller margin than the Republicans had when they were there. And it's difficult to get everybody in agreement on everything.

BASH: And they had two years with complete control of Congress, and they didn't give the president this border wall.


CONWAY: By the way, put me down as totally agree with you. I think the courts and Congress have failed to do their jobs. There's no question.

Democrats and Republicans have promised border security. They have voted for it in the past. I like Chuck Schumer circa 2009 talking about how border security has helped stem the flow of illegal immigration, vs. Chuck Schumer, 10 years later, who won't even deal with us on this.

BASH: Kellyanne -- Kellyanne Conway...

CONWAY: And, by the way, CBP told me yesterday 4,000 people were rescued by them last year. We need those stories as well. It's a tragedy that these migrant children have died.

We need the -- we need the uplifting stories of 4,000 or so -- 4,300, actually, CBP tells me, they helped rescued.

(CROSSTALK) BASH: Listen, CBP and the Border Patrol, the individuals, are doing yeoman's...


BASH: And ICE -- are yeoman's work.


BASH: Thank you so much, Kellyanne Conway, for joining us this morning.

CONWAY: Thank you, Dana. Happy new year.

BASH: You too.


BASH: And up next, he's a Republican, a fierce Trump ally, who's now accusing President Trump of acting more like President Obama on national security.

Senator Lindsey Graham is here to explain why next.



BASH: Welcome back to STATE OF THE UNION. I'm Dana Bash.

President Trump is spending his holiday at the White House making new threats over funding for his border wall, days after his surprise visit to U.S. troops in Iraq and Germany, where he defended his controversial decision to pull U.S. forces out of Syria in very Trumpian terms.


D. TRUMP: If they want us to do the fighting, they also have to pay a price. And, sometimes, that's also a monetary price, so we're not the suckers of the world.


BASH: Joining me now is Senator Lindsey Graham, Republican of South Carolina and the incoming head of the Judiciary Committee.

Senator, I want to talk about national security in a moment. Let's start with the -- with the shutdown.


BASH: You have been on the phone with your colleagues. Any movement in breaking the impasse?

GRAHAM: Yes, a bit. The one thing I know for sure, that nothing will get out of the Senate without wall/border funding. And Democrats are not going to give us any money for a wall, border security, without getting something themselves.

So here's what I think might work, $5 billion for the wall/border security -- Democrats have voted for more than that in the past -- married up with the BRIDGE Act, which Senator Durbin and I wrote, a three-year one-time renewable work permit for the DACA population, about 700,000.

We have about 400,000 TPS people who came here from natural disasters and war-torn countries decades ago. Their visa is running out. So, basically $5 billion for the wall, plus the BRIDGE Act, TPS, and some legal changes to do away some of these magnets to illegal immigration...

BASH: But...

GRAHAM: ... might save the day in the Senate.

BASH: OK, Senator, this is the gist of this, which is money for the border wall, in exchange for legal status, at least, for the so-called dreamers.

GRAHAM: Right. Right.

BASH: It has been out there before. Democrats have rejected it. The White...

GRAHAM: And TPS reform.

BASH: Right.

The Democrats have rejected it. The White House has rejected it. What makes you think it's going to fly now?


GRAHAM: Well, the bottom line is, everything I just outlined has been offered by each party before.

You know, President Trump is not going to walk away from this fight without border security funding, money for the wall, for lack of a better way of saying it.

And Democrats have a chance here to work with me and others, including the president, to bring legal status to people who have very uncertain lives.

I'm not asking anybody to do something new. I'm just asking people to sit down...

BASH: You probably...

GRAHAM: ... and rearrange the deal that was offered before. BASH: You probably hear this from Democrats and Republicans -- if I'm hearing it, you're hearing it -- that they don't trust -- they don't want to go into a potential deal like you just described, because they're not convinced that the president is going to pull the rug out from under them, just like he did on December 19, when you and your fellow Democrats and Republicans...


BASH: ... approved a funding bill that he later said he would veto, even though he didn't say that at the time.

GRAHAM: Well, we need to start talking again.

And let's talk about pulling the rug out from under each other. I have been working on this for 10 years. Democrats have voted for 700 miles of secure fencing in 2006. They voted for $25 billion for the wall in February. In 2013, we voted for $42 billion for -- $42 billion for border security, including $9 billion for a wall/fence.

The bottom line is, they want Trump to lose more than they want the country to win, I fear. At the end of the day, there's a deal to be had.

But everybody's changing their position here. And most Americans are pretty tired of it. So, to my Democratic friends, there will never be a deal without wall funding. And many Republicans are going to offer something as an incentive to vote for wall funding that you have supported in the past.

BASH: You talk about everybody changing their position.

I have to ask you about something that seems to be getting lost in this conversation, which is that, when you were running against the president in the Republican primaries and then all through the general election, he did say that this was a campaign promise to build a wall.

GRAHAM: Right.

BASH: But he also said Mexico would pay for it, not the American taxpayers.


BASH: What happened to that?

GRAHAM: Well, I'm not asking Mexico to pay for it.

BASH: But he did.

GRAHAM: I'm asking the American people to pay for it.

Yes. Well, at the end of the day, we will see how the NAFTA deal -- I think he will claim that Mexico is paying more under the new NAFTA deal. But I'm not talking about what he said back during the campaign. I'm talking about what we can do now to open up a government that needs to be opened up. The Coast Guard's not going to get paid here soon. DHS is an important national security function.

We need wall money. Democrats have voted for it in the past. The president's put on the table more than the BRIDGE Act, more than TPS. So I hope calmer heads will prevail.

I have talked to several Democratic senators. There's a deal to be had, I think, if the president would get behind it, $5 billion for the wall, the BRIDGE Act, TPS, and some legal reform, and we can reopen the government and be a more secure nation.

BASH: Real quick, are you going to -- assuming you do take the gavel as Judiciary chairman -- hold hearings on the deaths of my children?

GRAHAM: Yes. Yes.

Yes, I'm going to hold hearings on the deaths of these two children and the policies that entice people to come. One of the mothers of these children was not seeking asylum. She was just trying to come here to find a job.

Right now, we have 11,000 unaccompanied minors from Central America; 98 percent of them never leave. In 2014, Dianne Feinstein asked President Obama to change our policy. We have an unaccompanied minor from Central America, they should be sent back to their home country, just like if they were from Mexico.

That's a legal change we need to make with this deal.

BASH: Senator, let's talk about foreign policy and President Trump's decision to pull American troops out of Syria...


BASH: ... half of the U.S. troops of Afghanistan, a place you just returned from.

You have said this could pave the way for a second 9/11 in the U.S.


BASH: If ISIS reconstitutes itself after the U.S. leaves, does President Trump bear responsibility?

GRAHAM: Well, number one, everything we're dealing -- we're dealing with today falls on Obama's watch. He's the one that withdrew from Iraq.

In 2011, October the 21st, I said, I hope...

BASH: But he did it because there was a status of forces agreement with Iraq, right?

GRAHAM: Listen -- well, no, that's a bunch of bullshit. Pardon my French.


GRAHAM: That's a complete lie.

BASH: Why? That didn't happen?

GRAHAM: That's a complete, absolute lie.

I have been there. Yes, I was there talking to the prime minister of Iraq. And he said, how many soldiers you're talking about?

Obama wanted to get to zero. He got to zero. And 20 -- October, the 21st, 2011, I said, I hope the president's right and I'm wrong, but I fear this decision will come back to haunt us.

ISIS came about as a result of our withdrawal from Iraq. The caliphate was established in Syria because Obama sat on the sidelines and watched the place be dismembered.


BASH: Let's focus on now, because now President Trump is in the White House.

GRAHAM: Yes, let's focus on now.

BASH: Go for it.

GRAHAM: OK, now, he was dealt a bad hand by Obama, and he needs to play it better than he's playing it.

Keeping the troops in Iraq is great. Right now, after having been back from Afghanistan, I can tell you that ISIS is on the rise in Afghanistan. But if Pakistan would help us, we could get Taliban to the table and end the war in Afghanistan. Our presence then would be focused on counterterrorism, ISIS.


As to Syria, there are three things important this country. Number one, make sure that ISIS never comes back in Syria. That's why we need to keep some of our troops there. They're inside the 10-yard line in defeating ISIS. But we're not there yet.

If we leave now, the Kurds are going to get slaughtered.

BASH: How are you going to convince President Trump of that?

GRAHAM: I'm going to talk to him at lunch.

He has talked to General Dunford. I got a call from General Dunford. The president is reconsidering how we do this. He's frustrated. I get it. People should pay more. They should fight more.

But we're not the policemen of the world here. We're fighting a war against ISIS. They're still not defeated in Syria. I'm asking the president to make sure that we have troops there to protect us. Don't outsource our national security to some foreign power.

If we leave now, the Kurds will get in a fight with Turkey. They could get slaughtered. Who would help you in the future? And if we leave now, there will be a land bridge from Tehran to Beirut in terms of supplying weapons against Israel.

BASH: And this is something you're going to tell the president at lunch today?


I'm going to ask the president to do something President Obama would never do: Reconsider. This is being done by President Trump against sound military advice. The president is -- went to Iraq. Thank you very much for going.

I'm going to ask him to sit down with his generals and reconsider how to do this. Slow this down. Make sure that we get it right. Make sure ISIS never comes back. Don't turn Syria over to the Iranians. That's a nightmare for Israel.

And, at the end of the day, if we leave the Kurds and abandon them and they get slaughtered, who's going to help you in the future? I want to fight the war in the enemy's backyard, not ours. That's why we need a forward-deployed force in Iraq and Syria and Afghanistan for a while to come.

Here's the good news. If we play our cards right, we can reduce our footprint in all three countries. Have more -- have people do more and pay more is a goal I share with the president.

BASH: Senator, you were one of the president's biggest critics in the campaign. You're now one of his closest confidants, as evidenced by the fact that you're going to go have lunch with him today about this.

GRAHAM: Right.

BASH: But you have done in part because you have felt like you could help guide him on issues that matter the most to you, like foreign policy.

GRAHAM: Right. Right. Right.

BASH: So far, he hasn't listened to your advice on Syria, or on the Saudis, on really holding the Saudis to account on the murder of Jamal Khashoggi.

GRAHAM: Right.

BASH: So, do you feel like this relationship that you have cultivated has been worth it?

GRAHAM: Absolutely.

I feel like I have had more access to this president than every president combined. We don't always agree.

BASH: Access, but actual influence in policy-making?


Well, let me tell you, I'm generally very pleased. He pulled out of the Iranian agreement, which was a nightmare. He's increased military spending to a level that I could not be more pleased with. He changed the rules of engagement in Afghanistan, Iraq and Syria, so ISIS is just about destroyed.

All I ask him to do is make sure we don't fumble the ball inside the 10-yard line. Sit down with your generals. Make sure we get Syria right. See if we can go to Pakistan and put a free trade agreement on the table to get the Pakistanis to push the Taliban to the peace table, and you can end the Afghan war.

He has destroyed ISIS virtually on his watch. He has put Iran on the run. He has rebuilt our military from a foreign policy point of view, and we now talk to North Korea from a position of strength.

I'm generally pleased. But the Syrian decision caught me by surprise. I fear it's going to undercut all we have achieved. And I will ask the president to reconsider. And I think he's going to sit down with his generals and make an informed, well-thought-out decision.

That's all you can ask any president to do. Obama knew better than anybody. General Obama was a disaster. He never reconsidered any decision. I hope President Trump will. And I believe he will.

BASH: Let me get, quickly, before we let you go, to one question about the role that you're going to have coming into the next Congress, Judiciary chairman.

GRAHAM: Yes. Yes.


BASH: And that is going to be running the confirmation process for the president's new attorney general, Bill Barr.

GRAHAM: Right.

BASH: In a memo this summer, Senator, Barr wrote that Robert Mueller's investigation into possible obstruction of justice by President Trump is -- quote -- "fatally misconceived and could have disastrous implications for the presidency."

If this were a Democratic nominee overseeing an investigation into a Democratic president, would you see that memo as a problem?

GRAHAM: I think, when you fire an attorney general, it's pretty hard to obstruct justice if you can have almost unlimited ability to fire the attorney general.

I share many of Mr. Barr's thoughts about the consequences of obstruction of justice for personnel decisions. But, having said that, he will need to defend his reasoning. I have a lot of confidence in Mr. Barr. I think he's a great choice.

Like any other citizen, he can offer his opinion. And that's why we have the hearings. He will be tested. I will support him, unless I hear something really out of left field.


I think he's a good choice by the president.

BASH: Senator Lindsey Graham, thank you so much for joining us this morning.

Have a good lunch.

GRAHAM: Thank you.


GRAHAM: Thank you. Thanks.

BASH: And while you're counting down to 2019, they're looking at 2020.

One Democrat who says there's nobody better to take on President Trump than himself will tell me why next.


BASH: Welcome back to STATE OF THE UNION. I'm Dana Bash.

Even as they have been making moves behind the scenes, a slew of 2020 Democratic hopefuls have said it's too early to announce their plans.

Well, 2019 starts on Tuesday, and things are about to change.

Joining me now is former Virginia Governor and potential challenger to President Trump Terry McAuliffe.

Thank you so much.

TERRY MCAULIFFE (D), FORMER VIRGINIA GOVERNOR: Dana, great to be with you. Happy holidays.

BASH: Happy, happy. You too.

I want to talk about that in a moment, but let's talk about the shutdown.

You represented -- you were the governor of Virginia, where there are a lot of people...

MCAULIFFE: A lot of federal employees.

BASH: ... who are not having their paychecks come through, or might see that happen in the future.

What should Democratic leaders in Congress do?

MCAULIFFE: Not give an inch. Democrats should not give an inch.

Donald Trump owns this. He said he wanted to own it in the December meeting in the Oval Office. They had a deal. The Senate unanimously voted for a C.R. to take it into February. The White House condoned the vote. They took the vote.

And guess what? He listened to some right-wing folks on radio who were his puppet masters. They challenged his manhood. And they pulled the strings, Ann Coulter and Rush Limbaugh. And he just moved. And he said, we're not going to go for it.


And here's where we are today. And we have people, thousands of people in Virginia, many of them will not be paid, because, if you work for a federal contractor, like a woman who -- story in the paper today -- she works at the State Department. She's a cleaner. She's not going to be paid.

People can't live without a paycheck.

BASH: But the...

MCAULIFFE: Contrary to what a Republican congressman said yesterday, Congressman Perry of Pennsylvania said, oh, they don't need their paycheck.

BASH: The counter to the argument you just made at the beginning is, those people will not be paid longer if Democrats don't negotiate a little bit with the president.

MCAULIFFE: Well, here's what we're going to do.

January 3, I assume the Democrats will come in. On January 3, the first day, they ought to take up the bill that the Senate passed, day one, pass it, send it to the Senate, Mitch McConnell. They already voted for it unanimously. And send it to the president's desk.

This wall, this concrete wall, is never going to be built. Now, it's not a campaign promise. His campaign promise, Dana, was, we're going to build a wall and Mexico is going to pay for it.

He did not campaign saying, Americans are going to build a wall and you're going to pay for it.

So, this is a fallacy. He owns this. Now, maybe we can get to a place where we can have immigration reform tied together with border security. And that's what we ought to do moving forward.

But the Democrats should not give an inch on this. Donald Trump owns this. He's been in the White House. He's been isolated. He is too emotional. He is too unstable. And he has now forced people to go through the holidays without a paycheck.

And contrary to what some Republicans believe, people need that paycheck, not only for gifts for the holiday season, Dana. It's for putting food on the table. They have to pay rent. They have caused such problems for 800,000 Americans.

People who go to work for this federal government believe in our federal government. And Donald Trump, because of his tricks and because of Republican radio hosts pushing him, challenging his manhood, he has caused so many problems for so many people in this country.

BASH: Let's look ahead.

MCAULIFFE: He is an angry, emotional, unstable man sitting in the White House.

BASH: Is that your campaign -- your campaign speech for 2020? Is that what we're hearing?

MCAULIFFE: Well, I think what Americans want is, they're tired of this angry man, emotional man in the White House, who -- he's a constant liar.

I mean, just look at this week. He went over to Iraq and told the military, oh, they wanted a 2 percent, 3 percent -- oh, no, I got you 10 percent.

Well, he didn't. It was 2.6 percent. He said, you haven't had a pay raise in 10 years. They had had a pay raise every year. Under President Obama, actually, for several years, they had a bigger pay raise.

Then he has the audacity, the temerity to come out and blame Democrats for the death of these two children. That is the lowest act I have ever seen any president in the history of our country...


BASH: Governor, you sound like a man who's running for president. You want to announce right now?

MCAULIFFE: Well, I'm not going to announce right now.

I'm obviously looking at it. I have got time. I have got a lot of great relationships, 40 years of...

BASH: Do you have time?

MCAULIFFE: Sure. I have 40 years of working for this party. I have plenty of friends in many states. So I don't have to rush into this.

But what folks want and let's be clear, Dana. Here's the message for Democrats. They don't want an angry liar in the White House. They want someone who is compulsively optimistic and realistic. And the Democrats have to lay out an agenda of success of what we plan to do. I look at my record as Virginia -- a record amount of jobs created,

what we were able to do to build a new Virginia. And people want politicians to get results. That's why I think governors are always important. We have to balance budgets. We have to build roads. We have to clean the roads. We have to fund education, very results- oriented.

We don't have filibusters as governors. I think governors are very important to this.

BASH: Well...

MCAULIFFE: But we can't be making promises that are not realistic.

Listen, I like the idea of free college, but there is no way the Democratic Party should support paying for children of wealthy parents to go to school. I can afford to send my children to school. The federal government shouldn't be paying for my kids.

But there are things we need to do, access to credentialing and apprenticeships to match the skills with the jobs. That should be the debate.

BASH: What about Medicare for all?


BASH: What about Medicare for all?

MCAULIFFE: We all support Medicare for all. The system as it exists today...

BASH: You support Medicare for all?

MCAULIFFE: Yes, but it -- we have got to figure out how we pay for it. It's unrealistic in terms of how we pay for it today.

But do we want everybody covered under health care? Of course we do.

BASH: But this is specifically -- you know what we're talking about. This is an original Bernie Sanders idea that a lot of potential 2020 competitors have signed on to.

You're saying you're for that?

MCAULIFFE: I'm saying I support that everybody in this country gets access to quality, affordable health care, whatever you may want to call it, because the system today -- and I was a big support of the ACA, but we do need to tweak it to take it to the next level. We have got to fix it.

Am I for health care for all individuals, affordable, quality care? You bet I am. The key is -- and this is why I say governors are very important, because, when we make promises, we have to deliver. We have to actually pay for what we're actually promising.


So, as we get into this debate, let's have an honest, realistic discussion of where we need to go as a nation.

But, clearly, what we have in the White House today is not working. You look the people who have been affected. I mean, you just saw that China, in November, did not buy one single soybean from America. In November of 2017, they bought 4.7 million metric tons.

His tariff policies are not working. As governor of Virginia, I was a big trader. I went on 32 trade missions around the globe to five continents. You give me a fair trade deal, I can compete with anybody.

BASH: Governor, you talk about Democrats being realistic.

Are you being realistic, considering that you are a white man? You have been part of the party establishment for 30 years. You were campaign chair for Bill...

MCAULIFFE: Forty years.

BASH: Forty years. Thank you.



BASH: You're making my point even more.

MCAULIFFE: I know, right?

BASH: Former chair for both -- both Bill and Hillary Clinton, DNC chair.


BASH: Why do you think the party, the way it is now, will pick you as their 2020 nominee?

MCAULIFFE: Well, I think, first of all, this is what campaigns are all about.

What I would do, if I decided to run, I would run on my record as governor. I believe, you look at the progressive things, I restored more felon rights than any governor in the history the United States of America. I reformed our criminal justice system, record amount of economic development.

I took a state that had been battered by sequestration. I inherited one of the largest deficits in the history of our state, $2.4 billion. I left with one of the biggest surpluses of $500 million, 200,000 new jobs.

What do voters want? They want results. They want someone who's going to deliver on jobs, the largest investment in K-12 education in Virginia history. I was proud to work with the Republicans and sponsor that legislation for Virginia. Look what we did on health care, $10 billion on road construction.

So my argument would be, I am a governor. I was a southern governor, and at a time of very few statewide elected officials. And I took a state that was red. All statewide were Republicans, and when I left office, all Democrats. We are now a blue state.

Why? Because we delivered on the things that matter to the voters in this country.

BASH: Terry McAuliffe...

MCAULIFFE: And that's the message.

BASH: ... thank you for joining me.

You sure sound like somebody who's running for president.

MCAULIFFE: Well, we will see what happens. Thank you, Dana.

BASH: I appreciate it.

MCAULIFFE: Great to be with you.

BASH: Thank you.

MCAULIFFE: Thank you.

BASH: And in the next few weeks we'll likely see the 2020 Democratic field start to take shape. Who's going to jump in first? Governor? That's next.




BASH: Kellyanne, the government has been shut down for nine days over --

CONWAY: They failed to pass --

BASH: -- a wall. It has been shut down over a wall.

CONWAY: No. No, no, no, no. That is incorrect. That is completely false --


BASH: The president said in the oval office. He said very, very clearly --

CONWAY: It is shutdown on the border security.


BASH: The wall, border security. That is the question. The White House seems to be moving the goal posts all the way down the field. That was my interview with Kellyanne Conway, counselor to the president earlier in the program.

I'm here with our panel. You were a voting member of the Senate Republican conference not that long ago. What are you hearing from your colleagues and how are you feeling about this notion of it being unclear what the president wants? Do you buy that?

RICK SANTORUM, CNN SENIOR POLITICAL COMMENTATOR: Yes, I don't buy that. Look, there's a deal here. I don't think there's any question on the policy side. There is a deal to be made.

The question is whether there's the deal to be made politically. And there's pressure on both sides.

Look, the Democrats do not want to give the president a win on this issue. They do not want him to be able to go out and say I've got wall funding. And if that's the case, if they're that dug in, we're going to be here for a long time.

Because I don't think the president is going to back down. At least some colorable money that can be used for wall funding. So if the Democrats are dug in, then I think we're here for a long time.

And you can say, well, the president doesn't know what he wants and the president -- you're right, he is not clear on this, but I think he is clear that some wall money is necessary and it's really up to the Democrats whether they're willing to do that.

BASH: Luckily we have a sitting member of the House, who is a Democrat, sitting right next to you. Is he right?

REP. DEBBIE DINGELL (D), MICHIGAN: No, he is not right. First of all the president has not reached out to Nancy Pelosi since they met December 11th. There have been no discussions.

The Senate passed and thought that they were done, with a continuing resolution that would have funded the government through February 8th. Paul Ryan refused to bring it up because after the president suddenly after telling them he would sign it said that he wouldn't sign it.

Right now we have Republican president, Republican House, Republican Senate. They're in control. We need to have discussions.

I will tell you right now on January 3rd, on the first actions that day will be a resolution to pass through the House that will be to reopen the government.

SANTORUM: But it won't be to fund the wall and that's the problem.

LINDA CHAVEZ, DIRECTOR, BECOMING AMERICAN INITIATIVE: Well, you know what the real problem is? Is that there is a big lie going on. We are not in the middle of an immigration crisis in the United States. In the year 2000, 1.6 million people were apprehended trying to get into the United States. In fiscal year 2017, it was about 300,000.

Now it did tick up in 2018 and there has been a shift. We are no longer seeing single men coming to work in the United States. We're seeing families who are fleeing violence in their countries.

We do need to do something about the asylum system. I mean, it doesn't make any sense that people have to come all the way to the United States and set foot on U.S. soil to seek asylum if they have legitimate claims for asylum and we could change that. But this idea that we need a border wall is ridiculous.

We have exponentially increased the amount of funding that goes to protecting our borders and, in fact, it is more money that we spend doing that than we do all other federal law enforcement combined.

BASH: And then let's talk about the fact that we're talking about this and we're not talking about the issues that Democrats, Nancy Pelosi was hoping to set the table with as she presumably will become the house speaker again. Is that a problem?

SYMONE SANDERS, CNN POLITICAL COMMENTATOR: Look, I don't know if you've ever met Nancy Pelosi or any accomplished woman, for that matter, but I think we know how to multitask very well. And I think this Congress will know how to multitask very well. I'm not concerned at all.

Look, well over 57 percent of Americans do not support or did not support shutting down the government for this border wall. They wanted to avoid this gridlock. They wanted the president to compromise.

So even if he hadn't told us he owned a couple of weeks ago, he definitely owns it now. So I think that Democrats are right. They're going to put the bill on the floor then the ball will then be back in the Senate and the president's court. If they do not want to compromise, if they do not want to get the government back open, they are just hurting more Americans.


SANDERS: The Department of Homeland Security, the Department of Justice, the Department of State, the Department of Agriculture, among other departments have been affected by this partial shutdown. If you all thought it was bad when we couldn't eat romaine lettuce a couple of weeks ago, think what happens if the Department of Agriculture stays shut down for another two weeks, another three weeks.

Testing -- important testing that needs to happen for our food is not happening. You want to secure -- you want our borders to be secured, but the Department of Homeland Security is affected by the shutdown.

SANTORUM: Well, look, essential services are continuing. So anything that's considered to be public health and safety, those people are going to work -- you're right, they're not getting paid, but they will eventually get paid. But everyone who's an actual government employee will get paid. Now, government contractors won't get paid, and that's a lot of people these days. They won't get paid, but everybody else will get paid, and essential public health and public safety things will be continuing.

DINGELL: We shouldn't be playing games with these people lives. These people are not Republicans or Democrats, they're public servants or --


SANTORUM: It takes compromise. It takes compromise. Democrats are not --

DINGELL: We are ready.

SANTORUM: No, you're not.

DINGELL: We are ready to go to the table. We've been trying --


SANTORUM: Debbie, everybody on the Democratic side is saying, no wall funding. That's not compromise.

DINGELL: We have not. What we have said is we are for border security.

I don't know a single Democrat that is not for national security. But let's do something that's common sense, that's -- by the way, there are hundreds --


SANTORUM: All of these Democrats have voted for barriers in the past.

DINGELL: -- that this order doesn't work. We are for increase custom border patrol. We're for drones, we're for biometrics, we're for using --


SANTORUM: You're making my point, Debbie. You're making my point. You're just saying, we'll do everything what the president says he needs.


SANDERS: But what's the wall going to do? What is the wall going to do?

SANTORUM: Democrats -- you're making the case about something Democrats have voted for, supported in the past, and all of a sudden, because the president is for it you're against it.

SANDERS: No one has ever voted for an actual wall. Can you tell us what will the wall do? What will the wall do?

SANTORUM: Well, physical --

SANDERS: The majority of folks that come in to this country undocumented, come in with visas and they overstayed their visas.

SANTORUM: I agree with that but that's not -- that's only one element of the problem.

CHAVEZ: We don't have as many people trying to get into United States. We are down to a low in illegal immigration to the United States.

This idea that putting up a wall is going to do something, what it's going to do is it's going to invoke eminent domain, we're going to have lots of problems in that arena. And who's going to build that wall, by the way? Who's going to stand in 105-degree weather down on the Texas/Mexico border --

SANTORUM: We build lots of walls. I mean, there's hundreds of thousands of --

CHAVEZ: Yes. Who's going to build it is a bunch of Mexican immigrants, that's who's going to end up building it. And we're preventing people from coming into the United States that we need.

We are in a labor shortage right now. Employers are desperate for workers. And the president doesn't just want to cut down illegal immigration, he wants to reduce legal immigration, and that is a travesty.

BASH: So this absolutely is on congress' plate now, but there's already talk about this issue and many other among potential 2020 candidates. Four hundred days until today is the Iowa caucus, are the Iowa caucuses. You have a glint in your eye, senator.

SANTORUM: A little experience there. Yes.

BASH: I know you do. Texas Congressman Beto O'Rourke got some attention yesterday. He had a flashy video which we can show, criticizing the president on what we're talking about, the border wall fight. Other candidates are making moves.

Elizabeth Warren changed her Twitter handle last night. She took Massachusetts out of her Twitter handle, the name of her home state. Kamala Harris, senator from California is considering, reportedly, already where she's going to put her campaign headquarters.

Symone, you, obviously, are very invested in -- were invested in one particular potential candidate, Bernie Sanders.

SANDERS: I was. Yes.

BASH: What do you make of all of this?

SANDERS: Look, I think that we need to have a robust primary on the Democratic side of the aisle. I'm excited that so many people are talking about putting their names in the hat. And I think come about -- in about two weeks, we will see -- we will start seeing folks announce exploratory committees and actual campaigns.

BASH: And senator, as the only one at this table that I know of who's actually run for president more than once, as they're making their decisions, what's your advice?

SANTORUM: Well, my advice is to run, number one. Because there will be so many people. It is really an open and tremendous opportunity for someone out of the blue.

Look, Democrats do well when they take someone and you saw the surveys that reflect this. When they take someone unexpected. Someone who's not known. Someone who's that bright, shiny object.

And so if you're a bright, shiny object sitting out there in America and you think, I've got what it takes, there's no better time like the now, then to step up and try. Because it is a wide-open field.

BASH: OK. Good advice. Everybody standby.

I want to turn to the first lady, Melania Trump, because she's ringing in the new year at Mar-a-Lago without the president after a year in the harsh spotlight. CNN White House reporter, Kate Bennett, joins me now. Kate, in a lot of ways, the first lady isn't following the traditional path.

KATE BENNETT, CNN WHITE HOUSE REPORTER: Definitely. I mean, she's the most independent first lady in terms of what she's doing, making up her own rules, that we've seen quite frankly in modern history.


She does what she wants to do, whether that's tweeting, whether that's expressing something that doesn't necessarily fall in line with her husband's administration, policy wise, like visiting the border, for example. That's something that Melania does.

We saw her begin the year by watching her marriage sort of under a microscope, just 12 days into the new year, we got the Stormy Daniels news broke. And she sort of had to find her footing in that scenario.

She's done a lot of things, Dana, that people haven't noticed with children, you know, talking about going -- visiting the military just this past week, going on osprey, the first lady to do so, and be in a war zone. But at the same time, this is a first lady who sort of wants it both ways, right? She wants to talk about stopping cyber bullying while not addressing the elephant in the room, that she's married to a big cyber bully. And that's facing some hypocrisy there.

She also interestingly wants to, as she said in Africa, I wish people would focus on what I do and not what I wear, but she also this year wore a jacket that said on the back, "I really don't care, do you?" as she went to take the plane down to the border to see what was happening with the families in crisis there. So certainly there's still room to find that footing. She's doing both things while balancing like I said this privacy, this microscope she's under and wants to keep. And at the same time, being first lady of the United States.

BASH: Fascinating all around. Kate, you always keep us up to speed on all things first lady. Thank you so much. Happy new year to you.

BENNETT: Happy New Year.

BASH: And happy new year, everybody out there, from us here in Washington.

Up next, a look at the history of impeachment, just days before Democrats take over the House.