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Countdown To Shutdown; Bannon Subpoenaed, Twice; DHS Secretary On The Hot Seat; North And South Korea Hold Third Round Of Talks. Aired 5:30-6a ET
Aired January 17, 2018 - 05:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[05:31:06] CHRISTINE ROMANS, CNN ANCHOR: The clock is ticking. Three days to go and a government shutdown is starting to look like a real possibility. A Republican plan to keep the lights on doesn't have enough support in the party and there's no immigration deal in sight to please Democrats.
(BEGIN VIDEO CLIP)
REP. ADAM SCHIFF (D), CALIFORNIA: If the White House is permitted to maintain that kind of a gag rule on a witness, no congressional investigation could ever be effective.
(END VIDEO CLIP)
DAVE BRIGGS, CNN ANCHOR: Frustration in Congress after Steve Bannon refuses to answer questions in the Russia probe. But he'll have to be more forthcoming after a subpoena from the special counsel.
(BEGIN VIDEO CLIP)
SEN. CORY BOOKER (D-NJ), MEMBER SENATE JUDICIARY COMMITTEE: That you could even say in your testimony that Norwegians were preferenced by him because they're so hardworking.
KIRSTJEN NIELSEN, SECRETARY, HEALTH AND HUMAN SERVICES: I didn't --
BOOKER: Excuse me, let me finish.
NIELSEN: I'd be happy to (eye roll).
(END VIDEO CLIP)
ROMANS: And the Homeland Security Secretary facing anger and pushback and rolling her eyes after, again, saying she can't remember whether the president used a vulgarity about African nations.
Welcome back to EARLY START this morning. I'm Christine Romans.
BRIGGS: I'm Dave Briggs.
The president also got a clean bill of health, but --
ROMANS: He sure did.
BRIGGS: -- did he give rise to the "girther" movement? We'll try to discuss that in a little bit.
But we start with the government shutdown looking like a possibility. Three days to go before a possible shutdown on Capitol Hill and the two sides are actually further apart.
House Republicans have introduced a short-term spending bill funding the government through February 16th. Now, it includes six years of funding for the Children's Health Insurance Program, or CHIP, and delays various unpopular Obamacare taxes.
Republicans hope the add-ons put pressure on Democrats to support the bill. Right now, even some Republicans oppose it.
ROMANS: The chairman of the hard-right House Freedom Caucus, Mark Meadows, says there are enough no's and undecideds among his members that the measure will not pass with just GOP votes.
Democrats face their own tough choices, many of them coming out against stop-gap funding without a long-term fix for DACA. But some Democrats, especially those facing tough races in the fall, worry about a shutdown over Dreamers if there's no real agreement in sight.
BRIGGS: White House Chief of Staff John Kelly meets with the Congressional Hispanic Caucus later today.
From Capitol Hill, CNN's Phil Mattingly has more on the search for a funding deal.
PHIL MATTINGLY, CNN CONGRESSIONAL CORRESPONDENT: Well, Christine and Dave, we're basically at the point now of waiting -- waiting to see what's going to happen in the House, waiting to see what's going to happen in the Senate.
To give you some context here there are really two questions right now.
Can House Republicans on their own get the requisite number of votes to pass a short-term continuing resolution? Basically, a government funding bill likely into mid-February.
If they can, then the drama moves over into the Senate where, obviously, Senate Republicans are going to need Democrats to come on board -- at least nine, potentially more than that depending on absences -- to decide whether or not the government will remain open past Friday night.
As to where the battle lines are currently drawn? Well, take a listen to the two leaders in the Senate.
SEN. MITCH MCCONNELL (R-KY), SENATE MAJORITY LEADER: With no imminent deadline on immigration and with bipartisan talks well underway, there is no reason why Congress should hold government funding hostage over the issue of illegal immigration.
SEN. CHUCK SCHUMER (D-NY), SENATE MINORITY LEADER: A very fair bipartisan deal remains on the table. It's the only game in town and we're making steady progress on building additional support in both houses of Congress. There's a deal to be had this week.
MATTINGLY: Now, guys, if you paid attention closely you can really see where the positioning is right now.
Majority Leader Mitch McConnell making very clear if Democrats don't come along, Republicans will most certainly attack them for leading to the government shutdown and for a government shutdown that is basically entirely because of an immigration issue.
What Senate Minority Leader Chuck Schumer is saying is Democrats have made very clear they need, they want a resolution to DACA and as it currently stands there is a bill that's on the table -- the Gang of Six bill, a bipartisan proposal.
Here's kind of the outlines of that, though.
President Trump has made very clear that proposal's not sufficient. Republican leaders, while quiet about it, have also said, according to aides, that they agree with the president on this. That means when it comes to DACA there is no deal in the offing at any point in the near future.
[05:35:03] That means all focus will be on the continuing resolution. And for the near-term, that means all focus will be on House Republicans.
Right now, House Republican leaders trying to figure out a way to craft the bill that can get their defense hawks that are worried about another continuing resolution without raising the current caps, as well as enough for their conservatives to get the requisite number of votes to move it forward.
That's the first step, then comes the Senate. Right now, we wait -- Christine and Dave.
ROMANS: Oh, we wait, with Phil Mattingly. Thank you, sir.
A long day of questioning on Capitol Hill for former White House chief strategist Steve Bannon and there's more to come. According to multiple sources, Bannon informed the House Intelligence Committee he has been subpoenaed by Special Counsel Robert Mueller to testify before a grand jury.
Bannon faced 10 hours of congressional grilling on Tuesday and things got combative when lawmakers pressed him about the transition.
BRIGGS: Yes. Bannon's lawyer cutting off the questioning and forcing the committee to issue a subpoena compelling his testimony. But sources say Bannon was still not forthcoming. Adam Schiff, the top Democrat on the committee, claims Bannon was instructed by the White House in advance not to respond on certain topics. Schiff calling Bannon's refusal to cooperate unprecedented.
(BEGIN VIDEO CLIP)
SCHIFF: This was effectively a gag order by the White House preventing this witness from answering almost any question concerning his time in the transition of the administration, and many questions even after he left the administration.
The scope of this assertion of privilege, if that's what it is, is breathtaking. It goes well beyond anything we have seen in this investigation.
(END VIDEO CLIP)
ROMANS: Connecticut Democrat Jim Himes says Bannon risks being held in contempt of Congress if he does not answer questions.
Bannon's attorney told the committee his client will answer questions when he goes to the special counsel because executive privilege will not apply.
Bannon is one of several key Trump associates coming before that panel. Among the others are Corey Lewandowski, Hope Hicks, and Deputy Chief of Staff Rick Dearborn, who sources say testifies today.
BRIGGS: All right. Let's bring in "CNN POLITICS" digital director Zach Wolf.
ROMANS: Welcome back.
BRIGGS: Good morning to you, sir.
ZACHARY WOLF, DIGITAL DIRECTOR, CNN POLITICS: Good morning.
BRIGGS: All right, we will get to Bannon shortly, but let's start with the possibility of a government shutdown, once again, if they can't get a continuing resolution. Pretty smart play by Republicans to put CHIP in there -- our Children's Health Insurance -- to fund it for the long-term.
Here is the deal presented by Republicans.
Are we headed for a shutdown, Zach?
WOLF: Well, no. Ultimately, I think they'll probably find a way to fund the government. It won't be a long-term spending bill, most likely. Nobody's talking about that.
It doesn't seem likely that it's going to address the issue of the so- called Dreamers -- the DACA recipients -- people brought here illegally as children. So it's not going to do a lot of the things that a lot of Democrats had wanted it to do.
WOLF: But you do start to see a path forward, I think, emerge in the -- on the House side. The question is are Democrats -- they have to have Democrats on the Senate side -- going to vote for it?
There are a lot of open questions on this right now and only three days to go, so we'll have to see what happens. But you can kind of start to see how they do it.
ROMANS: Well, if -- you know, if the Democrats were to gamble on a shutdown over DACA or the lack of a Dreamer deal who gets blamed for a shutdown, I wonder?
BRIGGS: Yes, yes.
ROMANS: I mean, we're three -- we're three days out here. Who takes the blame and what's the -- I guess, the conventional wisdom among both parties?
WOLF: You know, I think that's kind of the great unknown. It's hard to imagine -- you know, to me, it's hard to imagine the party that's not in charge of --
WOLF: -- the White House, the Senate, and the House getting at least some of the blame for a government shutdown. You can't just say oh, these guys won't vote with us if you control everything, and then say they're to blame.
On the other hand, Republicans do need some Democratic votes in the Senate to pass anything at this point just because of the numbers.
BRIGGS: All right. Up on Capitol Hill yesterday, the Department of Homeland Security Sec. Kirstjen Nielson got a grilling in front of Congress. It was intense. Here's how she held up.
(BEGIN VIDEO CLIP)
SEN. PATRICK LEAHY (D-VT), MEMBER, SENATE JUDICIARY COMMITTEE: Norway is a predominantly white country, isn't it?
NIELSEN: I actually do not know that, sir, but I imagine that is the case.
(END VIDEO CLIP)
BRIGGS: That was just one example of a very heated day. Cory Booker, New Jersey senator, was on the attack.
What is the takeaway from yesterday?
WOLF: I think the takeaway is that it's very hard to be Donald Trump's cabinet secretary and be questioned about whether or not he used strong language, and have to essentially have amnesia about it. I think most people agree that Trump said something in that meeting
and she was not going to go there even when questioned by Dick Durbin, who was in that meeting with her. It was extremely uncomfortable for her but such is the peril, I guess, of serving in the administration.
ROMANS: What we learned is there are a lot of -- a lot of profanity being thrown around -- that's what. I mean, we never -- yesterday, we never got clarity on whether it is s-hole or s-house and, you know, Sarah Huckabee Sanders saying we spent five days going over this one word.
[05:40:10] I would say we spent five days going over one sentiment --
ROMANS: -- not one word.
BRIGGS: The word is almost a distraction.
BRIGGS: And, Lindsey Graham's profanity was echoing it right back to the president, using his own words, just to be clear.
ROMANS: Speaking of the president's health, 55 minutes we heard about his health yesterday and a couple of things -- takeaways for me.
He needs to lose 10 or 15 pounds just like everybody in America, and he resets every morning. Did you notice that -- what the doctor said? He has the ability --
BRIGGS: He doesn't need sleep.
ROMANS: -- to wake up -- he sleeps for four or five hours, wakes up, and completely resets first thing in the morning.
Now, do you think -- do you think, Zach, that the questions about his mental acuity and all that are going to be over now? Does that wipe away all this?
WOLF: No, I don't think so. You know, I don't think even the people who are questioning his mental acuity would have seen the test that he was given and thought he was -- he was that far gone.
You know, there's -- this is going to be the de-conspiracy theory of the Trump administration, I think, for the time being going forward. But in a lot of ways, it doesn't matter.
He is the president. There is no one in his cabinet that is -- that is saying that he is having mental problems, so we just need to move forward and work with what we've got.
BRIGGS: Well, the new -- the new theory is that some are calling it girthers. They wonder how the president grew from six-two to six- three at age 71. That matters only because according to the CDC if he's six-two, 239, he is, in fact, obese. And you could see that stealing all the headlines yesterday, but that's just a theory.
Part of this is all a result of what happens when you so mistrust in our institutions. When you throw out all this fake news stuff everyone runs to their corners.
And we're going to see that play out on Capitol Hill today, Zach, because Jeff Flake takes to the Senate floor with a speech in which he will say, "It is a testament to the condition of our democracy that our own president uses words infamously spoken by Joseph Stalin to describe his enemies."
John McCain, the other Arizona senator, writes in "The Washington Post" today. He talks directly about this very notion.
"Mr. President, stop attacking the press. The phrase 'fake news' granted legitimacy by an American president, being used by autocrats to silence reporters, undermine political opponents, stave off media scrutiny, and mislead citizens.
Unfortunately, the Trump administration's attitude toward such behavior has been inconsistent at best and hypocritical at worst."
Are other members of Congress going to echo these sentiments or will it just be McCain and Flake on an island?
WOLF: I think plenty of Democrats would echo them with them. But as far as Republicans go, some of the White House's previous critics -- people like Bob Corker, people like Lindsey Graham have been sort of more open to working, it felt like, with the White House recently.
So, you know, Flake and Graham -- Flake and McCain, the two Arizonians, are certainly out there on this and they're the ones leading this charge. The question is, is anybody going to follow them?
WOLF: We haven't really seen that yet, at least on the Republican side.
BRIGGS: Yes, and Jeff Flake was interesting to put out excerpts of the speech ahead of it which kind of reduced the shock factor once he does say those words. But it should be an interesting moment today on Capitol Hill.
ROMANS: And the fake news awards, whenever that happens.
BRIGGS: I don't think it happens.
ROMANS: All right, we'll see. All right.
BRIGGS: That's just my bet.
ROMANS: Zach Wolf, nice to see you.
WOLF: You, too. BRIGGS: Thank you, Zach.
All right, another winter storm heading to the northeast this morning could make for one messy commute for millions of Americans. More, next.
[05:48:08] ROMANS: All right. Net neutrality pretty much the biggest story in business and consumer behavior right now. The future of the Internet could be decided in court.
Twenty-one states have filed a lawsuit to keep net neutrality. It is that Obama-era rule that forces Internet providers to treat all Web traffic equally.
Now, the Trump administration's FCC repealed it last month. The New York Attorney General says that repeal puts profits over consumers. It allows companies to control what we see, what we do, and what we say online.
A rollback means higher prices and slower speeds but FCC chair Ajit Pai says no, it stops the government from micromanaging the Internet.
A spokeswoman declined to comment on the lawsuit from these states.
Meanwhile, lawmakers are looking for a legislative fix to keep net neutrality. Senate Democrats need one more vote to overturn that FCC ruling. But even if the resolution passes the Senate, it faces an uphill battle in the House and then a likely veto, of course --
ROMANS: -- by the president. The White House supports the FCC's repeal of net neutrality.
BRIGGS: OK, another winter storm warning this morning. States of emergency in Alabama, Georgia, and North Carolina. Seventy million people under winter storm warnings from Texas to Maine. It could be a messy morning commute.
Meteorologist Pedram Javaheri with more in the forecast.
PEDRAM JAVAHERI, AMS METEOROLOGIST: Good morning, guys.
Yes, you know, the big story here across the southern U.S. is really a feature that extends all the way out towards the northeast but, really, mainly a player here for the southeast because some of the major metro cities across the southeast certainly could be impacted this -- at least the morning commute and that is what we're watching here.
And you take a look -- from the north to the south, parts of 23 states, upwards of 70 million people that are going to be impacted by this. And then you work your way towards portions of Alabama and Georgia where you have these states of emergency in place because snowy and also icy conditions that come in right around the morning rush hour.
How much snowfall? Really not a significant amount but, of course, you know it doesn't happen too often across the south so one to two inches could be problematic with respect to what they're used to across the region.
[05:50:08] While you work your way towards Raleigh, the blockbuster area -- the bullseye for the heavy snowfall -- just west of town potentially as much as six inches in store across Raleigh. You certainly could see some flights impacted out of that region, as well.
And then across the northeast, really the heaviest amount is going to be around portions of coastal Maine, about four to six inches. Two to four in store across parts of the metro cities and I think New York could even see less than that, upwards of just an inch or so before everything tapers off -- guys.
ROMANS: All right. Thank you so much for that, Pedram.
A contraceptive app is coming under criticism after more than three dozen users experienced unplanned pregnancies.
The Natural Cycles app, considered a certified contraceptive in Europe, uses an algorithm considering several factors to predict when a woman should use traditional contraception. But a hospital in Sweden says at least 37 women checked in for abortions after using the app as a birth control method.
It has 700,000 users worldwide.
Natural Cycles calls the unplanned pregnancies quote "an inevitable reality."
BRIGGS: Seven hundred thousand people are depending on an app for that.
ROMANS: There's an app for that.
The fight for the cloud now under the sea. Google's latest plan for its computing business on "CNN Money Stream," next.
[05:55:44] BRIGGS: Five fifty-five eastern time.
North and South Korea held a third round of talks overnight. The big focus again on the Olympics but South Korean's allies are voicing concern Pyongyang is using the talks to buy time for its weapons program.
CNN's Paula Hancocks joins us live from Seoul. Good morning, Paula. PAULA HANCOCKS, CNN INTERNATIONAL CORRESPONDENT: Hello, Dave.
Well, these talks are still going this Wednesday. Today, the North Koreans have agreed to send a 230-person cheering squad, and they've also said that they want to come to South Korea via the DMZ -- so, via the land right. The South hasn't agreed to that at this point, though.
But even more interesting is what we're hearing from Vancouver in Canada. This is the summit with 20 countries that the U.S., Canada, U.K. are pushing forward to try and deal with North Korea.
And what we're hearing from some of the allies of South Korea is be careful.
We're hearing from the Japanese foreign minister. He's saying that the international community has to be clear-eyed when it comes to North Korea and their motivations for having these talks in the first place. Also saying it is not the time to ease pressure towards North Korea.
It's a similar situation with the U.S. Secretary of State Rex Tillerson. There was agreement that the pressure should be kept on. But he does say it could be time to talk but North Korea needs to show steps that it is willing to talk.
And, of course, you have to point to -- point out that China and Russia aren't part of these talks so, not necessarily, much is going to get done -- Dave.
BRIGGS: All right. It's about 8:00 p.m. there in Seoul. Paula Hancocks live for us, thank you.
ROMANS: FBI agents arresting a former CIA officer accused of stashing top secret information. Jerry Chung Shing Lee was taken into custody at JFK Airport in New York.
BRIGGS: Court documents say FBI searches of Lee's hotel rooms in 2012 turned up notebooks with names and phone numbers of CIA assets, as well as operational notes and addresses of covert facilities.
The 53-year-old Lee made an initial court appearance in Brooklyn on Tuesday and did not enter a plea. He faces up to 10 years in prison.
ROMANS: All right, that time of the morning. Let's get a check on "CNN Money Stream" right now.
Global stock markets mostly lower today. They're following a lead from Wall Street.
U.S. stocks started the day near record highs. The Dow popped about 26,000 after its fastest 1,000-point gain in history but the trip was brief. The Dow fell nearly 300 points there, helped by a drop in energy stocks and General Electric.
And, G.E.'s cash crisis is getting worse. It lost more than $6 billion from its insurance operations with the stock falling 45 percent last year.
Sources say the oldest U.S. conglomerate is considering a break-up.
All right. The top U.S. consumer watchdog wanted to crack down on payday lenders preventing shady operators from keeping low-wage workers in debt in perpetuity.
But, the new acting director Mike "Mick" Mulvaney, of that agency, is reconsidering a new rule meant to protect borrowers. That new rule would have prevented payday lenders from making super-high interest loans to people who can't pay it back. It's clear they can't pay it back.
But, Mulvaney wants to cut back on regulations overall. He is a longtime critic of the CFPB. He took over in November.
In the wake of the Logan Paul controversy, YouTube plans to manually review a significant chunk of his videos, shielding advertisers from offensive or controversial content.
Actual humans, not algorithms, are going to watch videos that are Google-preferred. That's YouTube's most popular videos.
YouTube removed Logan Paul after he posted a video of a dead body to his preferred channel.
It's raising all kinds of questions about just what kind of garbage is out there and who's policing it.
ROMANS: All right, thanks for joining us. I'm Christine Romans.
BRIGGS: I'm Dave Briggs. "NEW DAY" starts right now. We'll see you tomorrow.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: I don't think we're going to have a deal on DACA by the end of the week. What we need to do is to fund the government.
ROMANS: With a shutdown looming, House Republicans scrambling to find the votes to pass a short-term bill.
UNIDENTIFIED MALE: I'd hate to have a temporary spending bill. It's crisis management at its worst.
UNIDENTIFIED FEMALE: If we have a shutdown it is the president's responsibility.
SARAH HUCKABEE SANDERS, WHITE HOUSE PRESS SECRETARY: Democrats' unwillingness to actually put the country ahead of their party is what's stalling things.
SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: This has turned into a s- show. We need to get back to where Democrats and Republicans work together.
REP. JIM HIMES (D), CONNECTICUT: And the White House said that any communications that happened in the White House or during the transition were off limits.
UNIDENTIFIED MALE: His claim of executive privilege was meant to demonstrate Bannon's loyalty to President Trump.
UNIDENTIFIED MALE: Before the grand jury he doesn't have that option.
(END VIDEO CLIP)
ANNOUNCER: This is NEW DAY with Chris Cuomo and Alisyn Camerota.