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EARLY START

Deal Or No Deal?; Bannon Slipup, Lewandowski Rebuff; Trump Slams Russia On North Korea. Aired 5:30-6a ET

Aired January 18, 2018 - 05:30   ET

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


(COMMERCIAL BREAK)

[05:30:35] CHRISTINE ROMANS, CNN ANCHOR: There is bipartisan agreement on one thing. No one wants to give any ground. Under 48 hours to a potential government shutdown. Will one party blink or will the lights go out?

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I will have Mexico pay for that wall. Mark my words.

JOHN KELLY, WHITE HOUSE CHIEF OF STAFF: He has evolved in the way he's looked at things. Campaign to governing are two different things.

(END VIDEO CLIP)

ALEX MARQUARDT, CNN ANCHOR: Apparently, campaign promises are made to be broken. The chief of staff says that candidate Trump was uninformed.

ROMANS: And, new signs the White House tried to limit testimony when Steve Bannon went before Congress this week, but could this slip-up reveal one detail about a critical issue in the Russia probe? We'll have that in a moment.

Welcome back to EARLY START. I'm Christine Romans. Nice to see you.

MARQUARDT: Nice to see you. Thanks for having me. And, I'm Alex Marquardt in for Dave Briggs. It is 31 minutes past the hour.

The federal government's authority to spend money runs out tomorrow night. Two groups of lawmakers to watch today, House conservatives and Senate Democrats.

The House is expected to vote on a continuing resolution to fund the government through February 16th, just under a month from now.

The GOP defense hawks in the House say that the party's short-term bill does not meet their campaign promises.

(BEGIN VIDEO CLIP)

CHRIS CUOMO, CNN ANCHOR, "NEW DAY," HOST, CNN "CUOMO PRIME TIME": Are you in a position right now to vote yes on what's out there for a budget resolution on Friday?

REP. JIM JORDAN (R), OHIO: No. Here's what I want. I want us to do what we told the American people we were going to do, what they elected us to do. Fund defense, hold the line on non-defense, and do what the election was about on immigration.

If the Democrats want to shut down the government because they want to give amnesty to people who came here illegally, then you can have them on your show and they can explain why that's the appropriate thing to do.

(END VIDEO CLIP)

ROMANS: The Senate Democrats under heavy pressure from immigration activists. They want renewed protections for Dreamers, people who were brought here illegally as children. Many of those Democrats leaning against a stop-gap bill.

(BEGIN VIDEO CLIP)

SEN. RICHARD BLUMENTHAL (D), CONNECTICUT: I don't know how my colleagues can look these Dreamers in the eye and say we're going to engage in breaking America's promise and violating our trust. At some point standing on moral principle is why we are here and we made a promise to the Dreamers.

(END VIDEO CLIP)

MARQUARDT: Senate Democrats do have at least one Republican ally, Sen. Lindsey Graham. He says that putting off a deal on DACA will hurt Dreamers as well as Republicans.

(BEGIN VIDEO CLIP)

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: Those who think that we're going to get away, as Republicans, with getting all we want on the fence now and we'll deal with the kids later -- the Dream Act population -- closer to March fifth when their back's against the wall, that is -- that is nuts.

(END VIDEO CLIP)

ROMANS: Senate Republican Leader Mitch McConnell trying to corral Democratic votes. McConnell says the president's waffling on immigration is not helping.

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL (R-KY), SENATE MAJORITY LEADER: I'm looking for something that President Trump supports and he's not yet indicated what measure he's willing to sign. As soon as we figure out what he is for then I would be convinced that we were not just spinning our wheels.

(END VIDEO CLIP)

ROMANS: As soon as we figure out what he is for.

A White House spokesman says the president has been unambiguous about what he wants.

(BEGIN VIDEO CLIP)

RAJ SHAH, DEPUTY WHITE HOUSE PRESS SECRETARY: Our priorities are very clear. We cannot get into a situation where we have -- where we have a temporary stop-gap fix and then a few years down the road we have hundreds of thousands of new illegal immigrants in this country. That is not a fix, and that's inhumane and that is not a bill of love.

(END VIDEO CLIP)

MARQUARDT: President Trump telling Reuters that a government shutdown quote "could happen" but he insists that Democrats will take the blame for it.

ROMANS: So, 42 and a half hours from a possible shutdown, what is the state of play on Capitol Hill?

Let's bring back in our "CNN POLITICS" reporter Tal Kopan.

MARQUARDT: Hi, Tal.

ROMANS: Let's listen to what Sen. Chuck Schumer of New York had to say about the likelihood of a -- unlikelihood of a deal.

(BEGIN VIDEO CLIP)

SEN. CHUCK SCHUMER (D-NY), SENATE MINORITY LEADER: The overwhelming number in our caucus have said they don't like this deal and they believe if we kick the can down the road this time we'll be back where we started from next time. So there's very, very strong support not to go along with their deal.

(END VIDEO CLIP)

ROMANS: What's the likelihood? What -- you know, whether -- what are the -- how are the winds blowing in Washington? Do we think that this -- we could see the shutdown?

TAL KOPAN, REPORTER, "CNN POLITICS": Right now, it's really hard to read, Christine, to be perfectly honest.

You know, the first step is this has to clear the House and in the House, Republicans are going to have to do it on their own. If Republicans can't muster the votes in the House, then Democrats absolutely are at the table making demands of their priority list because Republicans are going to need them to help fund the government.

[05:35:07] If it can clear the House, which Republican leadership seems to think they can do with some arm-twisting even though that's not clear quite yet, then it goes over to the Senate and becomes more difficult. You have enough Democrats in the Senate -- even losing John McCain,

who hasn't been voting this week -- even losing Lindsey Graham -- you might have enough Democrats but it would be a tough vote to be accused of shutting down the government only over an immigration program.

But, some of those Democrats may still feel that they could justify rejecting the government funding proposal on other grounds and say it's a bad deal for the American people. And it becomes all about spin and then we start to see whether they're actually going to play a little hardball and take this game of chicken even further to the line.

MARQUARDT: Tal, don't Democrats have the upper hand because they can just say that Republicans control the House, the Senate, the White House, and just blame the Republicans? I mean, it seems that they hold most of the cards and they'll be able to get what they want on immigration, no?

KOPAN: I feel like most of the press releases I've gotten recently, Alex, are more about who's to blame for a shutdown than about policy. And I think that tells you -- that speaks volumes about where people's heads are at in Washington because you're right. Who gets blamed by the American people is absolutely essential to the calculation about how to vote. And the truth is Republicans control the House, the Senate, and the White House.

And, you know, Democrats feel a little bit extra cover after the events of last week when a bipartisan proposal was presented to the president and it was rejected, and comments were reported, after the fact, that the president made in the Oval Office that were derogatory toward certain countries and immigrants.

So that gives Democrats a little bit more negotiating power to say we actually came to the table --

ROMANS: Yes.

KOPAN: -- with a deal and it was rejected.

So all of this kind of swirls together in terms of playing the blame game. But yes, there is a lot of concern on the Republican side that they would ultimately get blamed even if Democrats withhold votes in the Senate as the ultimate sort of death now for the government funding bill.

ROMANS: The president, in his interview with Reuters, the news agency, yesterday, talked about that meeting and the leaking from that meeting. This is what he said.

"I've had many meetings over the years. I've never had somebody run out to the press and say Trump said this, Trump said that, Trump said this. That's not the way you make deals."

I would argue those meetings he's had over the years, he was not President of the United States and it wasn't something so important as, you know, the livelihoods of hundreds of thousands of people on the line.

Also remarkable I think, yesterday, Mitch McConnell saying that they need to know what the president is for. Sort of, I think, voicing concern that they don't know what the core is of the president on these issues.

KOPAN: Yes. Well, you know, it's almost a catch-22 as they work this out up here on the Hill where all Republicans want desperately is for the president to bless a deal. Once the president says he'll sign something it takes away so much of the concern about holding the tough vote on it.

You know, the president then, in that meeting, where he -- which -- the only that was televised last week --

ROMANS: Sure.

KOPAN: -- where he said these are sort of the four things I want to see roughly in a deal, at the end of that meeting he said I'll basically sign whatever you guys send me.

So both sides -- you know, the president and Capitol Hill -- are sort of saying tell me what you want to see and neither one is really at this point saying OK, this is what I can live with and does it work for you.

And so, that's sort of part of the dance here and part of the problem is that Republicans are simply not going to take a leap of faith and hold a vote on something that is politically difficult for them if they're concerned that the president is going to reject it at the end of the day.

MARQUARDT: Tal, we're also hearing that behind the scenes Chief of Staff John Kelly is saying that the president has been -- was uninformed when on the campaign trail. He was talking about the wall. And now, he's saying that the president -- on the record he's saying this -- is evolving in his thinking.

Let's take a quick listen to that.

(BEGIN VIDEO CLIP)

JOHN KELLY, WHITE HOUSE CHIEF OF STAFF: He's very definitely changed his attitude towards the DACA issue, and even the wall. He has evolved in the way he's looked at things.

Campaign to governing are two different things and this president has been very, very flexible in terms of what is within the realm of the possible.

(END VIDEO CLIP)

MARQUARDT: So if the president is evolving and all we've heard from him since he started running was build the wall, build the wall, what does that mean for this actual wall that is so important to the base? And we know that the president loves to deliver to his base. KOPAN: Yes. I mean, the chances of build the wall were pretty incredible, you know. Although, to a certain extent, while there are absolutely members of his base who want to see a physical wall across as much of the border as possible, you know, build the wall is a lot easier to chant than restrict immigration or restrict illegal immigration.

To a certain extent, the wall came to symbolize the totality of his very aggressive, hardline immigration policies and we are seeing those play out. This administration is working to not just curtail illegal immigration, they are chipping away at legal immigration to the U.S. and venues that --

[05:40:17] ROMANS: Right.

KOPAN: -- immigrants have had to come legally.

And so, on the one hand, yes, scaling back the notion of a wall to 700 miles and a variety of tactics is one thing, but if the president were to abandon some of those more aggressive immigrant policies writ large, I think that is when you would really start to see some problems with his base.

ROMANS: All right, Tal Kopan. Nice to see you.

MARQUARDT: All right. Thanks for bringing that out for us.

ROMANS: Thanks, Tal.

KOPAN: Thank you.

ROMANS: All right.

Former White House chief strategist Steve Bannon had one major slipup when he faced the House Intelligence Committee Tuesday.

Despite refusing to answer questions about his time in the White House, "Axios" reports Bannon did admit speaking with senior White House staffers about a now infamous June 2016 Trump Tower meeting. That's where Donald Trump, Jr., Paul Manafort, and Jared Kushner met a Russian lawyer offering dirt on Hillary Clinton.

MARQUARDT: CNN has also learned that Bannon's attorney took breaks during that session to call the White House to determine which questions his client could answer. The source familiar with the proceedings says that, quote, "All the shots were called by the White House."

Chief of Staff John Kelly claims that the White House never told Bannon to invoke executive privilege.

ROMANS: Bannon has struck a deal with special counsel Robert Mueller, agreeing to be interviewed by his team instead of testifying before a grand jury.

Another former campaign chief, Corey Lewandowski, had his turn in front of congressional investigators Wednesday. He left them frustrated, too.

We get more from Manu Raju on Capitol Hill.

(BEGIN VIDEOTAPE)

MANU RAJU, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Good morning, Christine.

And now, yet another contentious day before the House Intelligence Committee after Corey Lewandowski, the former campaign manager, declined to discuss some key topics that the committee wanted to press him on, mainly those topics that occurred after he left the Trump campaign back in 2016.

Now, Lewandowski said that he was unprepared to discuss some of these issues. This is according to Adam Schiff, the top Democrat on the committee who raised concerns about the fact that Lewandowski would not discuss these matters and also would not discuss whether or not President Trump himself talked to him about the testimony that he delivered to the House Intelligence Committee yesterday.

Schiff said this was unacceptable.

REP. ADAM SCHIFF (D), CALIFORNIA: Mr. Lewandowski said that he was not prepared to answer those questions today but that he would return to the committee at some later date to answer those questions. This, in my view, is completely unacceptable.

RAJU: Now, this all comes as part of an effort by the White House to limit congressional testimony, limit what these people who are tied to the administration can say behind closed doors because they believe it's in keeping with past precedent.

But, Democrats, in particular, see this as an effort to obstruct an investigation.

(END VIDEOTAPE)

ROMANS: All right, Manu Raju. Thank you so much.

The president heads to the Pentagon today with a new U.S. nuclear strategy on the way. And now, he's accusing Russia of helping North Korea. We're live in Moscow.

(COMMERCIAL BREAK)

[05:47:07] ROMANS: A freshman at the University of Alabama no longer enrolled at that school after posting two videos full of taunts and racial slurs on Martin Luther King, Jr. Day.

(BEGIN VIDEO CLIP)

HARLEY BARBER, STUDENT, UNIVERSITY OF ALABAMA: What's it say offensive (ph) because is said (bleep). You know what (bleep). I don't care if it's Martin Luther King Day (bleep).

I'm in the south now (bleep) so everyone can (bleep) off. I'm from New Jersey.

(END VIDEO CLIP)

MARQUARDT: That student has now been identified as 19-year-old Harley Barber from Marlton, New Jersey. Her vulgar video has sparked -- sparked, rather, a protest on the campus on Wednesday. Demonstrators saying this happens far too often.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: This is not the first time this has happened. Really, something like this dramatically happens every year.

UNIDENTIFIED FEMALE: And then, the fact that she had friends kind of like encouraging this type of, you know, thing, it just really shocked me that nobody was in the back saying hey, you know, that's not right.

(END VIDEO CLIP)

MARQUARDT: The University of Alabama calls the video offensive and deeply hurtful.

Barber did apologize, telling the "New York Post" she said something really bad, there was no excuse, and she feels horrible. She plans to return home to New Jersey.

On MLK, Jr. Day, of all days.

ROMANS: All right, 48 minutes past the hour.

Here's a statistic that will give you a chill. All 50 states had at least some snow or sleet Wednesday. That's according to the National Oceanic and Atmospheric Administration.

Airports along the east coast getting back to normal now. Airlines forced to ground more than 1,800 flights yesterday. Only about 400 so far today, mainly in Atlanta and North Carolina.

MARQUARDT: Today, the Deep South faces a deep freeze and much of the east coast is now looking forward to a much-needed January thaw by the weekend.

CNN meteorologist Derek Van Dam has the latest.

(BEGIN VIDEOTAPE)

DEREK VAN DAM, AMS METEOROLOGIST: Good morning, Alex and Christine.

The storm system responsible for the snow across the southeast yesterday has now exited the east coast and its left frigid air in its wake. You won't believe how cold this air mass is.

In fact, all the way to the Gulf Coast we have hard freeze warnings in place this morning, including the Florida Panhandle. Just about 30 million Americans impacted by temperatures below 32 degrees. This is what it will feel like as you step outside. Single digits this morning from Atlanta to Charlotte, and Nashville at 13 degrees. That is your forecast windchill, again, as you step outside.

But there is some light at the end of the tunnel. We're going to replace this arctic blast with milder air as a wind takes over from the southwest, and that is going to replace our temperatures that have been subfreezing over the past few days to above freezing for places like New York and D.C.

Look at the forecast for Thursday. Today, 33 degrees in the Big Apple, 50 by Saturday.

Back to you.

(END VIDEOTAPE)

ROMANS: All right, Derek, thank you so much for that.

It is round two for Silicon Valley in Washington. This time, big tech is defending how it handles extremist content. "CNN Money Stream" is next.

(COMMERCIAL BREAK)

[05:54:38] ROMANS: President Trump using his score on a cognitive test to take a swipe at his Oval Office predecessors over North Korea.

In an interview with Reuters, he blamed Barack Obama, George W. Bush, and Bill Clinton for their approaches to the rogue regime and the growing nuclear threat.

MARQUARDT: He said, quote, "I guess they all realize they're going to have to leave it to a president that scored the highest on tests."

The White House physician says Mr. Trump scored 30 out of 30 on the cognitive test that he requested.

[05:55:03] ROMANS: Today, the president meets with senior military leaders at the Pentagon with a new U.S. nuclear strategy on the table. Officials say the Pentagon is discussing the possibility of a nuclear strike if the U.S. is targeted in a non-nuclear attack.

MARQUARDT: And the president is now accusing Russia of helping North Korea evade sanctions and at curbing their nuclear and missile programs. The president says the progress is being made with China's help and that's being effectively undone.

CNN's Paula Newton is live in Moscow with the details.

Paula, the Russians have responded this morning?

PAULA NEWTON, CNN INTERNATIONAL CORRESPONDENT: Indeed, they have, and it will come as no surprise to you, Alex, that they are categorically denying that their violating those sanctions. From the deputy foreign minister here in terms of his comments to

running media, it is "These accusations made by the United States are absolutely unfounded. Russia is fulfilling its obligations under the corresponding U.N. Security Council resolutions in full."

Now, of course, the denial comes as no surprise. We've been covering this story for a while. I did the first story from here in April detailing how the United -- how the U.N. actually claims that Russia is violating those sanctions.

What's different here, though, is the fact that the White House is worried that now they are violating those sanctions with fuel. And just as the president had been able to convince China that it was time to really curb those fuel exports to North Korea, suddenly they have some proof.

And, Sec. Tillerson actually alluded to this last night as well, saying that look, Russia might be picking up some of that slack.

The reason this is important, Alex, is that look, if North Korea believes that they have an in with someone else -- another country that will them evade those sanctions -- it will make negotiations even more complicated and tough.

I'm not sure what kind of leverage the president here. You know, U.S.-Russia relations are already at a historic low.

MARQUARDT: All right, lots of moving parts. Thanks very much. Paula Newton in Moscow.

ROMANS: All right, it is that time of the morning. Let's get a check on "CNN Money Stream" this morning.

Global stock markets mixed right now. Wall Street rallied to a fresh round of records. The Dow jumped more than 300 points to close above 26,000 for the first time ever.

Here's how the president's hometown paper this morning, the "New York Post," is playing it on the front page -- "Ka-Dow!"

The Dow now up 42 percent since the election and you can credit strong momentum from corporate tax cuts and strong earnings. It has been a good earnings season so far with just a few disappointments.

Ford's stock had it worst day in a year and a half. It will make less money than thought.

And big banks are taking short-term hits from the corporate tax cut -- short-term hits. It lowers the value of their so-called deferred tax assets.

The latest, Bank of America, a $3 billion one-time tax charge nearly halved its profit.

Well, speaking of banks, Goldman Sachs reported its first loss in six years due to that short-term tax hit and a steep drop in trading revenue. The drop is even hitting Goldman employees. They made four percent less than last year.

Goldman's stock has lied (ph) to top rivals like JPMorgan, Citigroup, and Bank of America. It's up less than 10 percent in the past year.

Big tech is defending its handling of extremist content claiming it's now fighting terrorism with counter-propaganda.

Executives from Facebook, Twitter, and YouTube were all on Capitol Hill yesterday. They told lawmakers they've gone beyond screening and removing propaganda. They're now creating anti-terror content to counter hate messages.

This is round two for Silicon Valley and Washington. Late last year, Facebook, Google, and Twitter -- they were grilled over their platforms being used to meddle in the U.S. election.

And these big powerful tech names have been under scrutiny for really being nothing more than a platform, right, and making money for being a platform --

MARQUARDT: Right.

ROMANS: -- while their platforms have been basically --

MARQUARDT: Very profitable.

ROMANS: Profitable, but hijacked by ne'er-do-wells.

All right, thanks for joining us. Nice to see you. I'm Christine Romans.

MARQUARDT: Nice to see you. Thanks for having me. And, I'm Alex Marquardt.

Forty-two hours until a potential government shutdown. Who blinks first? "NEW DAY" starts right now.

(BEGIN VIDEO CLIP)

SEN. JOHN KENNEDY (R), LOUISIANA: Everybody else in America has a budget except for the United States government. It's embarrassing.

SCHUMER: We want to do everything we can to avoid a shutdown. It'll fall on the Republicans' backs.

SARAH SANDERS, WHITE HOUSE PRESS SECRETARY: What happens, I think you have only one place to look and that's to the Democrats.

KELLY: He's very definitely changed his attitude towards the DACA issue and even the wall.

MCCONNELL: As soon as we figure out what he is for then I would be convinced that we were not just spinning our wheels.

TRUMP: When they have no collusion it seems unlikely that you'd even have an interview. ROMANS: White House counsel Ty Cobb saying President Trump is very eager to speak to Robert Mueller.

KELLY: Steve has had very, very little contact with the White House.

REP. TREY GOWDY (R), SOUTH CAROLINA: I am really frustrated when witnesses talk to the media but they can't to the members of Congress.

(END VIDEO CLIP)